Understanding Security Deposit Disputes

When you capture a security deposit through Protect — for example, to cover property damage — the guest has the right to dispute that charge with their bank. This is called a chargeback. Understanding how disputes work will help you prepare evidence, respond effectively, and set realistic expectations.

What is a dispute?

A dispute (or chargeback) occurs when a cardholder contacts their bank to contest a charge on their statement. The bank reverses the transaction and notifies Stripe, who in turn notifies you. Common reasons guests dispute security deposit charges include:

• Claiming the damage was pre-existing or not caused by them
• Not recognising the charge on their bank statement
• Believing the deposit should have been refunded automatically
• Disagreeing with the amount captured

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Important:

Pre-authorized holds that have not been captured cannot be disputed.

Disputes only apply to charges where funds have actually been taken from the guest's account.

What happens when a dispute is filed

When a guest files a dispute, the following happens:

1. Funds are withdrawn: The disputed amount is immediately debited from your Stripe balance, along with a processing fee (typically $15 / £15). You may also be subject to additional card network fees — for example, Visa may charge counter fees of up to $500 for certain dispute types.
2. You are notified: Stripe will notify you via your Stripe Dashboard and email. You'll see the guest's claim and the reason code for the dispute.
3. Evidence submission window: You have 14–21 days (depending on the card network) to submit evidence supporting the charge. This is your opportunity to demonstrate that the charge was legitimate.
4. Bank review: The guest's issuing bank reviews the evidence and makes a final decision. Neither Stripe nor Uplisting participates in this decision. The review typically takes 60–75 days.
5. Outcome: If you win the dispute, the disputed amount is returned to your Stripe balance. If you lose, the funds remain with the guest and the processing fees are not refunded.

How to submit strong evidence

The quality of your evidence is the single most important factor in winning a dispute. Here is what to include: Damage photographs: Timestamped photos taken before the guest's arrival (showing the property in good condition) and after their departure (showing the damage). Side-by-side comparisons are very effective.

Signed rental agreement: The section of the rental agreement where the guest agreed to the security deposit terms.

Highlight the specific clause — do not submit the entire document, as banks print evidence and may not review lengthy attachments.

Guest communications: Screenshots of messages where the deposit was discussed, damage was reported to the guest, or the guest acknowledged the issue.

Booking confirmation: The booking confirmation showing the security deposit amount and terms.

Repair invoices or quotes: Documentation of the cost to repair the damage, to justify the amount captured.

Check-in / check-out records: Timestamps showing when the guest checked in and out.

Tips for effective evidence submission:

• Submit clear screenshots and text excerpts rather than links — banks print evidence for review and cannot click URLs.
• Focus on the specific terms and sections relevant to the dispute, not full documents.
• Include a clear written summary explaining what happened, what damage occurred, and why the charge was justified.
• Submit all evidence within the response window. Late submissions are not accepted.

Proactive steps to protect yourself

The best way to handle disputes is to prepare for them before they happen. We strongly recommend:

Photograph the property before every check-in: Take date-stamped photos of all rooms, furniture, appliances, and any areas that are commonly damaged. Do the same after every check-out.

Use rental agreements: Ensure every guest signs a rental agreement that includes clear security deposit terms. Uplisting's rental agreement feature can automate this.

Communicate clearly in writing: Send the guest a message before check-in confirming the security deposit amount and conditions. For example: "A security deposit of [amount] will be held on your card. It will be automatically returned within 3–5 days of check-out, provided no damage is found."

Document damage immediately: If you find damage after check-out, photograph it immediately and send the guest a written notification before capturing the deposit.

Keep records organised: Store all photos, communications, and agreements in an easily accessible location so you can respond quickly if a dispute is filed.

Setting realistic expectations

It is important to understand that disputes are decided by the guest's bank, not by Stripe or Uplisting. Industry-wide, merchants win approximately 30% of disputes. The outcome depends on the strength of the evidence you submit and the policies of the guest's issuing bank.

The dispute process typically takes 60–75 days from filing to resolution. During this time, the disputed funds will not be available in your Stripe balance.

Maintaining a low dispute rate is important. Card networks monitor dispute rates, and if your rate exceeds 0.75% of total transactions, you may face additional scrutiny or penalties from the card networks. Proactive communication with guests and fair deposit handling are the best ways to avoid disputes entirely.

Further reading

Stripe Radar and Disputes — our guide on dispute handling and Stripe Radar configuration

Protect FAQs — common questions about the Protect feature

How to Refund the Security Deposit — guide on releasing and refunding deposits

Stripe: How disputes work — https://docs.stripe.com/disputes/how-disputes-work

Stripe: Dispute best practices — https://docs.stripe.com/disputes/best-practices