Stripe's Early Fraud Warnings (EFW) can be a mixed bag if you sell digital goods or subscriptions. These order types behave differently in dispute scenarios, especially with EFW timing. If you're running a store that depends on fast delivery or recurring charges, knowing how Stripe EFW handles these can help you act fast and protect your account from preventable chargebacks.
What Is Stripe EFW?
Stripe EFW (Early Fraud Warning) is a system that alerts merchants when a cardholder's bank flags a transaction as potentially fraudulent before it turns into a chargeback. It's designed to give you time to refund or cancel the order before it becomes a dispute, which could count against your dispute rate and trigger penalties like the Visa Dispute Monitoring Program (VDMP).
But it doesn't always show up in time. This is especially true for digital or recurring charges.
How Stripe EFW Handles Digital Goods
For digital goods like software, downloads, access codes, or account credits, speed matters. Most sellers deliver immediately, which means the window to act on an EFW is often already closed by the time it appears.
Stripe sometimes receives an EFW after the product has already been used or delivered. At that point, the merchant is stuck between refunding a completed sale or risking a chargeback.
What you can do:
- Use velocity rules or fraud filters to flag first-time buyers, mismatched countries, or unusually large orders.
- Delay delivery slightly, such as by a few minutes or hours, if possible. This gives EFW a chance to arrive before sending digital access.
- If you see an EFW post-delivery, weigh the risk. Refunding may protect your dispute rate, but you'll lose the revenue.
How Stripe EFW Works for Subscriptions
Recurring charges come with a different set of problems. Cardholders often forget about ongoing subscriptions or don't recognize the charge. This leads to high fraud-code disputes, even if the original signup was legitimate.
Stripe can send an EFW for recurring charges, not just the first one. If the issuing bank suspects the cardholder might file a fraud dispute, you'll get the alert.
The issue is timing. The user may have had access for days or longer by the time the warning appears.
What you can do:
- Include clear descriptors in billing, such as your product name and URL.
- Add email reminders before billing renewals so users know what to expect.
- Use Stripe's Smart Retries or dunning tools to catch failed payments early instead of charging without warning.
- Cancel access or pause subscriptions as soon as an EFW appears, especially if there are red flags like IP mismatch or changed email addresses.
Stripe EFW Isn't a Guarantee
Getting an EFW doesn't always mean you'll avoid a chargeback. Some EFWs lead to disputes even after a refund. Others never appear at all. It's a helpful signal, but not a full safety net.
It's also important to know that Stripe doesn't control the timing. The issuing bank decides when to send the alert. Stripe simply passes it along. If the alert comes after delivery or use, you're already behind.
Conclusion
Stripe EFW gives you a chance to act before things escalate, but when it comes to digital or recurring orders, the clock moves fast. Knowing how these alerts work helps you decide quickly whether to refund, block access, or flag a buyer for future review. Stripe provides the notice, but you still need to move fast.
FAQ: Stripe EFW with Digital Recurring Orders
Does Stripe EFW apply to all transactions?
No. Stripe EFW only appears when the cardholder's bank flags a transaction as suspicious and sends the alert to Stripe. Not all payments will trigger one.
How fast does Stripe send EFW alerts?
Timing varies. Some alerts come within minutes, others take hours. For digital goods and subscriptions, the alert might arrive too late.
Can you refund a transaction after an EFW?
Yes. If you catch it in time, refunding may prevent a chargeback. But there's no guarantee the dispute will be avoided.
Does refunding after an EFW always stop a chargeback?
No. Some customers still file a dispute, and sometimes the bank continues processing the chargeback even after a refund.
Can subscriptions get EFW alerts?
Yes. Even recurring charges can trigger EFW alerts, especially if the customer forgets about the subscription or doesn't recognize the billing name.
What happens if I ignore an EFW?
If you do nothing, it may become a fraud-coded chargeback. This affects your dispute rate and could put your account at risk.
Are EFW alerts different for digital vs physical goods?
The alert system works the same way, but digital orders often have tighter timelines. That makes it harder to act before fulfillment.
Is Stripe responsible for missed EFWs?
No. Stripe forwards the alerts when they receive them, but the issuing bank controls the timing. Stripe can't speed that up.
We Catch Fraud Before Stripe Even Sees It
Stripe EFW gives you a heads-up, but only when the banks speak up first. If you sell digital goods or subscriptions, you need to catch fraud earlier and act faster. Chargeblast helps you flag high-risk orders the second they come in. Our pre-dispute tools are built to spot buyer abuse, stop refund loops, and block serial fraud before it hits your Stripe account.
Tired of fighting alerts too late? Use Chargeblast to catch disputes before they happen and keep your dispute rate clean.
