Are Stripe Chargebacks Even Legal? What Substack Writers Need to Know

You lost a payment and got a fee? The truth about Stripe chargebacks

created in Canva with Substack overview chargebacks, logo Substack and Stripe

While I’m sitting on my balcony in the north of Italy, sipping a non-alcoholic Sprizz, listening to rock music from the nearby festival, and waiting for the colourful fireworks to start in about 15 minutes… (In Italy, time runs differently—I’m guessing it’ll start in 30 or maybe even 60 minutes.)

Let’s talk about something that’s making a lot of Online Writing Club members nervous lately: Stripe chargebacks.

You might’ve seen it—creators posting on Substack Notes asking subscribers not to file chargebacks, but to simply unsubscribe instead. Also, tribe members are sending me DMs asking me what to do. We also talked about this once in the Chat.

So if you’ve ever worried about suddenly losing income, getting hit with unexpected fees, or having your account flagged... you’re not alone.

So here’s the big question:

Legally speaking, what’s actually going on behind the scenes—and what can we do about it?

That’s exactly what today’s Guest Post Spring feature edition 2 is all about. (Edition 1 was with Yana G.Y. who crossed 300 paid subs and $ 10,000 ARR! Congrats!)

Meet Coach Noemi Apetri 🇩🇰 from Denmark. She’s not only part of our Club—she’s also a total powerhouse when it comes to legal strategy and creative business building.

Here’s a quick peek at her background:
✔️ 12+ years as a commercial and privacy lawyer in IT
✔️ Former Head of Legal at a privacy tech company
✔️ Helped multiple startups scale to unicorn level
✔️ Now runs a Substack that blends legal insights, life coaching, and business strategy
✔️ Burnout survivor, big dreamer, and major action-taker

We recently went live together to talk about Terms & Conditions on Substack,

🔴LIVE: Protect Your Substack With THIS Feature & How To Back Up Your Email List

…and I knew I had to bring her back for Guest Post Spring—because her advice is that valuable.

So grab a drink as I do, settle in, and let Naomi walk you through what Stripe and the banks are really doing—and how you can protect yourself as a creator.

---

What's a "chargeback”?

If you're unfamiliar with the term, a "chargeback" is what happens when a customer disputes a transaction with their bank, typically claiming they didn't authorize the payment or that the charge was fraudulent. The bank then forcibly reverses the transaction, returning money to the customer, and often imposing additional fees on the merchant (the Substacker).

This is the standard pattern of disputes shared by Substack:

photo credit: Substack

What's a "consumer", anyway?

In the financial world, a consumer is typically defined as an individual buying goods or services for personal use—not in connection with a trade or profession. Globally, consumer protection laws are designed to protect individuals in this category, because they're seen as the less powerful party in transactions. These laws exist in most jurisdictions, including both the U.S. and the EU. As a result, banks are quick to reverse charges when consumers raise disputes, especially if there's any ambiguity around authorization.

But here’s the twist: when a Substack Substacker is hit with a chargeback, technically, they're also a consumer—after all, they're using Stripe and Substack as individual users, right?

Well... Legally speaking that's not really the case.. In the eyes of the law and banking system, they’re acting as a vendor and not a private person. So no! They are not a consumer in the chargeback context. This is why Substackers lose the protections they normally would have as consumers, and hurts real people... working really hard to make an honest living.

For Substackers on platforms like Substack, this problem is becoming increasingly common—and deeply problematic.

Picture this: you've built a loyal audience, worked hard on your content, and clearly explained subscription renewals. Yet one day, you wake up to see funds withdrawn from your account. Not only is the original payment taken away, but Stripe also imposes additional fees as a penalty. Worse yet, repeated chargebacks could threaten your ability to use payment services entirely.

Why would this happen, especially when Substackers provide clear evidence that charges were legitimate?

Why Stripe Sides with the Consumers

• Strong Consumer Protection Laws: U.S. banks operate under stringent regulations aimed at protecting consumers. Laws like Regulation E and Regulation Z heavily favor consumer rights in disputes, making banks naturally inclined to side with cardholders—even when claims seem questionable.

• Stripe’s Limited Role: Stripe isn't deciding these disputes independently. Instead, it's an intermediary, passing along your evidence to the banks. The banks themselves are typically cautious, opting to quickly resolve disputes in consumers' favor because challenging them is riskier and costlier.

• Subjectivity and Ambiguity: Many disputes labeled as "fraudulent" aren't outright fraud. Often, subscribers simply forgot they subscribed, failed to recognize the charge, or regret their purchase. Banks, however, often interpret these misunderstandings as genuine consumer concerns, defaulting to protecting their customers.

This creates a harsh reality for Substackers: even well-documented evidence showing consent (like clear Terms & Conditions, subscriber interaction history, email open rates, etc.) won't make a difference. And it stings!

What Substack Could Do?

(Some practical suggestions from this ol' IT lawyer that moonlighted as product manager back in the day:…)

There is one entity that could intervene to smooth this issue.

That entity is Substack.

How? By creating functionality for the Substack platform (functionality that a creator can turn on/off) to remind its subscribers that a new charge is coming.

Extra points if there's the option to add a message summarising highlights of the month/year they had with the creator, or value they already had.

What Can Creators Do, if Anything?

Well, there is always something you can do. As an ex-lawyer, of course, I could think of a few options. Good lawyers don't advise just on laws and how they apply, they look at the situation holistically and suggest solutions that can address the concerns in a way that follows the rules and creates results.

To view my specific suggestions for Substackers dealing with Chargebacks go to my extended article in my Publication, Legally Speaking.

Scientifically Speaking...

Here's something ELSE to keep in mind about creator-subscriber relationships based on science:

1. The Parasocial Effect: Subscribers feel like they know you—even if you've never met. That one-sided emotional bond makes them hesitate to unsubscribe, even if they’ve stopped reading.

2. Reciprocity Bias: If someone once got value from your work, they often feel a subtle obligation to stay—even if that value has diminished.

3. Loss Aversion & Inertia: Cancelling feels like losing something. Add in the effort of navigating settings, and many will just let the charge auto-renew.

4. Trust Over Value: People don't just subscribe for content—they subscribe for connection. Familiarity and trust keep them around longer than pure value.

Legally Speaking…

So yes! Legally speaking… banks side with consumers primarily to comply with strict regulatory frameworks designed to protect consumers from unauthorized and fraudulent transactions. Banks aim to minimize THEIR legal risks, regulatory scrutiny, prioritise keeping their banking license, even if this means occasionally siding with questionable claims from consumers.

Practically speaking, "fighting" chargebacks rarely makes sense. It's costly, it erodes subscriber trust, and often leads to failure due to the consumer-friendly regulations banks follow.

While legally speaking, Substackers may indeed be in the right, the smarter business approach is to adopt preventive measures instead.

1. Bring so much value that your readers won't want a chargeback.

2. Show up. Show your face. Share a personal detail now and then. Make it human. Because the more people feel connected to you, the less likely they are to dispute a charge.

3. Use your community to build a mini universe where your subscribers feel they belong.

Rooting for your success,
Your favourite Ex-Lawyer and Coach

Noemi Apetri 🎈

P.S. Lawyers can advise (not this ex-lawyer I am retired!). They expose the facts, the risks, but CEOs, they are the ones to decide based on the information they have. So for you, as the CEO of your publication, you need to weigh in the pros and the cons of this article. Think about:

• How many chargebacks do you get? Can you just chuck those cases as operating costs?

• Is it a big enough issue to thing of doing renewal reminders?

• What is my relationship with my subscribers?

P.P.S. This article is not and should not be construed as legal advice and does not create client-attorney privilege. This article is a journalistic report and an opinion piece based on someone's experience in law, business, and life. Think critically and carefully before making any decision based on this article or anything that Coach Noemi Apetri writes or says in any of her publications.

---

If you enjoyed this article…if you want to find out what’s hidden in the T&Cs of your favourite platforms… join Legally Speaking… It will be a wild ride!

Many thanks to Naomi for sending me this 2nd edition of the Substack Guest Post Spring! You can be excited about the next one I’ll share from a fellow tribe member

Want to share your own and be seen by 14000 subscribers and 28000 followers? Become an annual subscriber and join the inner circle of the Club.

---

Naomi is often rising on Substack! She’s also part of the Online Writing Club community. You can join our inner circle by becoming an annual subscriber! By becoming one, you’ll also get an EXTRA 20% OFF my signature Bootcamp!

While I’m traveling with my hubby and two kids in Italy, I’m always very excited to see when someone new joins the Bootcamp or sends me a message like this:

Happy to help YOU while I’m traveling. When I’m back, we’ll have our Q&A sessions and 1:1 calls.

So here’s what it’s about:

The Substack Kickstarter Bootcamp is my 5-day, step-by-step system that helps you write, publish, grow, and monetize.
On your terms. At your pace.

📽️ Day 1: Setting up your Substack (with personality!)
📽️ Day 2: Write better emails people love to read
📽️ Day 3: A sneak peek into my Online Writing Club
📽️ Day 4: Use Notes + Recommendations to grow
📽️ Day 5: 7 ways to monetize your Substack (not just paid subs!)
🎁 Bonus Days 6–10: Take action + implement (with guidance from me. Monthly calls & help via DMs)
You just need a starting point—and the support to keep going.

Kickstart your email list in 5 days flat.

Let’s turn your words into income, your ideas into reality.

P.S. The fireworks haven't started yet. In Italy, time runs differently. For more, follow me on Notes.

P.P. S. Any questions? Naomi is happy to help you!