Handle and Prevent Student Chargebacks

This article goes over how to prevent and handle student chargebacks. It also 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 student, including unfamiliar or fraudulent charges. School owners are charged a $15 fee for any chargeback initiated on a credit card transaction processed by the Monthly Payment Gateway or Teachable Payments; therefore, it’s important to understand how to handle and prevent disputes with your students to minimize any financial loss. Teachable also provides school owners the ability to dispute chargebacks on their end, in the case of a misunderstanding or fraud.

Preventing Chargebacks

While chargebacks are an unavoidable aspect of taking payments online, a strong prevention strategy is the best way to avoid chargebacks from happening in the first place. We recommend implementing a number of prevention methods, including establishing effective communication and transparency, crafting a clear sales pitch, and adhering to a fair and flexible refund policy.

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 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.

It's also important to keep all of your contact information updated and accessible 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 and is transparent about their policies and content 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 Fair and 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 Chargebacks

Students that file a chargeback are automatically unenrolled from the school that processed the disputed transaction. If they purchased a subscription or payment plan, then their active subscription or payment plan will also be automatically canceled.

If you do receive a chargeback from a student, then it's important to understand that the process for handling student chargebacks differs depending on the payment gateway you’ve set up.

The Monthly Payment Gateway and Teachable Payments

If you're using the Monthly Payment Gateway or Teachable Payments, then Teachable automatically sends an email notification to the primary owner of the school when a chargeback is filed with the student's credit card company. An email notification will not be sent when a student disputes a payment processed by PayPal.

The email provides 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.

NOTE: Chargebacks issued on credit card transactions processed by the Monthly Payment Gateway or Teachable Payments are subject to a $15 chargeback fee. This fee is deducted from the school’s payout but is returned to the school if the school wins the dispute. You can view chargeback fee deductions in your school’s earnings statements.

If you believe a chargeback that you've received is erroneous or unwarranted, contact Teachable’s Customer Care team as soon as possible. Stripe will not accept any chargeback disputes if they are submitted more than 7 days after receiving a chargeback. Once you have opened a ticket with our support team, they'll guide you through the process of initiating a dispute of the chargeback.

CAUTION: The win rate for chargeback disputes is very low. If a dispute is initiated with Teachable, we cannot guarantee that the school owner will win the dispute. After a dispute is initiated, it can take credit card companies up to 90 days to render a decision and begin the process of returning the funds to the school owner or student. The best way to handle chargebacks is to take the prevention steps outlined above to decrease the likelihood of student chargebacks.

Custom Payment Gateways

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 and dispute chargebacks.

Excessive Chargeback Policy

If you’re using Teachable Payments or the Monthly 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. To check your current chargeback rate, go to your school's Dashboard page:



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