Handling and Preventing Student Chargebacks

This article goes over how to prevent student disputes and outlines Teachable’s chargeback policy.


A chargeback (also known as a dispute) occurs when a cardholder questions their payment with their card issuer; this differs from a refund, which is a voluntary return of funds from the billing entity. A transaction may be disputed for a variety of reasons by a customer, including unfamiliar or fraudulent charges—this is an unavoidable aspect of taking payment online. However, understanding how to handle and prevent disputes with your students is an important step towards minimizing loss and chargeback rates.

Preventing Student Chargebacks

The best way to manage chargebacks is to prevent them from happening in the first place. To do so, we recommend implementing a number of prevention methods.

Establish Effective Communication and Transparency

Your school’s refund policies, course content, and any other aspects of the course experience should be presented clearly and effectively on the sales page of your course and reinforced across your school.

For example, if you plan on releasing content over time, this information should be clearly stated on your sales page to avoid future confusion. Similarly, once a student has enrolled in your course, you can send them an email containing more information about how the course is structured, along with your refund policy and contact information, for future reference and clarity.

Keep all of your contact information updated and visible to your students. Ensure that your school’s email address is current and that all email inboxes associated with your school are monitored regularly. Oftentimes, if a student doesn’t receive a response from a school owner regarding login or access issues, they will proceed with disputing the charge with their bank. Many concerns can be resolved directly with the student if a school owner is responsive to inquiries or transparent about their policies from the get-go.

Craft a Clear Sales Pitch

Keep in mind how your sales pitch comes across to prospective buyers. While a compelling sales page is essential for sales conversions, avoid being ambiguous or unclear in how you present your course. For example, presenting your course as a “get-rich-quick scheme” or promising dubious results may lead to unrealistic expectations and/or frustrations from your students.

Adhere to a Clear, but Flexible Refund Policy

To avoid chargebacks and confusion as a whole, having an easily understandable refund policy goes a long way. However, we recommend considering each refund request on a case-by-case basis. If a student wants to file a chargeback, you can preemptively issue a refund, which will effectively prevent the student from disputing the transaction and help you avoid chargeback fees. Oftentimes, disputes occur due to a lack of communication from both parties, and more often than not, further communication and compromise can lead to a resolution—rather than a long, drawn-out dispute.

Handling Disputes

Depending on the payment gateway you’ve set up, the process for handling disputes with students differs slightly.

If you are using Teachable’s payment gateway, then we will automatically send school owners an email when a chargeback is filed with the student's credit card company. The email will provide a link to the transaction in question so that you can contact and resolve the dispute with the student directly. You will also be able to view all transactions that have been disputed in your transaction history by selecting the Chargebacks filter.

If you are using custom payment gateways, then Teachable will not automatically notify you if a chargeback is filed with the student’s credit card company. You can check your Stripe or PayPal dashboard for information about chargebacks. Please contact Stripe or PayPal for more information about how to set up chargeback notifications.

Excessive Chargeback Policy

If you’re using Teachable’s payment gateway, then Teachable is liable for any chargeback fees associated with a disputed transaction. As such, if a school using our payment gateways has an excessive chargeback rate (>1%), then Teachable will contact the school owner via email requesting that the school owner set up their own custom payment gateways.

A school's chargeback rate is calculated based on the total number of chargebacks and the total number of successfully completed transactions in the month-to-date, which refers to the period from the first day of the month to the current date of the month. For example, if a school has 200 completed sales from May 1st to May 15th and one chargeback in the same time period, then the school's chargeback rate would be 0.5% (1/200).

If the chargeback rate continues to be excessive, and the monetary value of these chargebacks exceeds the value of a school’s payout, then Teachable reserves the right to withhold payments and/or take your school offline.


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