ACH refunds and disputes

ACH refunds

There is a maximum of 180 days from the date of the original payment to be able to submit a refund for an ACH Direct Debit payment. Refunds require at least 3 business days to process and take up to 6 days to appear on a customer’s statement.

Please note!

Avoid disputes

If your tenant has accidentally paid you, contact them immediately to avoid a payment dispute. Factors such as slightly longer settlement time periods and the way banks process ACH Direct Debit transactions can cause confusion between you, your tenant, your tenant’s bank, and Stripe.

For example, your tenant might contact both you and their bank to dispute a payment. If you proactively issue your tenant a refund while the tenant’s bank also initiates the dispute process, your tenant might receive two credits for the same transaction, so it’s important to communicate with your tenant about the processing time and the status of their refund.

If a refund for a payment that hasn’t settled yet has been requested, Stripe doesn’t submit the charge to the bank, essentially they just cancel the original payment rather than refunding it.

Stripe doesn’t specify ACH Direct Debit refunds as refunds when we deposit the funds back to a customer’s bank account. Instead, we process refunds as a new credit transaction and include a reference to the statement descriptor for the original payment.

ACH disputes

ACH Direct Debit provides a dispute process for bank account holders to dispute payments. Customers can generally dispute a payment through their bank for up to 60 calendar days after a debit on a personal account, or up to 2 business days for a business account. In rare instances, a debit payment can be successfully disputed outside these timelines.

Unlike credit card disputes, all ACH Direct Debit disputes are final and there is no process for appeal. If a customer successfully disputes a payment, you must contact them if you want to resolve the situation.

Please note!

If you proactively issue your customer a refund while the customer’s bank also initiates the dispute process, your customer might receive two credits for the same transaction. Follow the guidelines in the following section on refunds to avoid this situation.

Last updated:
Jul.4, 2023