Disclosure: We sell our own digital products on Gumroad and make free tools for sellers. We have no partnership with Lemon Squeezy, Payhip, Sellfy, Etsy, PayPal or Stripe and aren’t paid for any link.

Sooner or later a buyer asks for their money back, or skips asking and goes to their bank. The first is a refund: you (or the platform) send the money back. The second is a chargeback (also called a dispute): the card company or PayPal pulls the payment back, and someone has to answer it with evidence. On most platforms a refund costs you a few cents to a couple of dollars, while a lost chargeback can cost more than the sale itself.

We read each company’s own help pages, fee pages and terms on October 20, 2026. Rules and fees change, so check the linked pages before you rely on them.

The short version

  • Gumroad (sales it processes itself): on a refund, Gumroad returns its own 10% + $0.50 fee and keeps only the card processing part (2.9% + $0.30). On a chargeback you cover the refunded amount and the processing fees, Gumroad returns its platform fee, and Gumroad fights the dispute for you. Its help pages don’t list a separate dispute fee for sellers.
  • Lemon Squeezy: a refund comes out of your next payout minus its platform fee, so you’re back where you started. A chargeback costs a $15 dispute fee on top, and Lemon Squeezy handles the case.
  • Payhip and Sellfy don’t hold your money, so you refund and fight disputes yourself in your own PayPal or Stripe account. PayPal and Stripe keep their original fees on a refund, and both charge $15 for a dispute (Stripe charges another $15 if you counter it, returned only if you win).
  • Etsy credits its transaction and processing fees back when you refund through Shop Manager; the $0.20 listing fee comes back only if you also cancel the order. Etsy answers chargebacks for you and can take the money back from your Etsy balance.
  • Everywhere, a refund is far cheaper than a lost chargeback, and too many disputes can get your account restricted.

Refunds and chargebacks compared

  Who issues the refund Fees you get back on a refund Who fights a chargeback Dispute fee to you Platform rules to know
Gumroad You, from the Gumroad dashboard (Gumroad support can also refund within 90 days to prevent chargebacks) Gumroad’s 10% + $0.50; not the 2.9% + $0.30 processing Gumroad, with an optional statement from you within 72 hours (120 over a weekend) None listed for Gumroad-processed sales Over 1% of customers disputing: Gumroad enforces a refund policy on your account. Over 1.5% chargeback rate: 25% of your balance held in reserve.
Lemon Squeezy You, from the dashboard (Lemon Squeezy can also refund within 60 days to prevent chargebacks) You’re charged the refund minus the platform fee, so the sale nets to zero Lemon Squeezy $15 Too many chargebacks can get the store suspended.
Payhip You, in your own PayPal or Stripe account (Payhip can’t issue refunds) PayPal and Stripe keep their fees; Payhip’s help pages don’t say whether its 5% or 2% fee comes back You, in PayPal’s Resolution Center or Stripe, using Payhip’s download log as evidence PayPal $15 (standard); Stripe $15, plus $15 if you counter PayPal: 30 days to respond before the buyer is refunded automatically.
Sellfy You, in your own PayPal or Stripe account (Sellfy can’t issue refunds) Sellfy takes no transaction fee; PayPal and Stripe keep theirs You, using the order’s Activity log as evidence (Sellfy can’t contact PayPal or Stripe for you) PayPal $15 (standard); Stripe $15, plus $15 if you counter A full refund removes the buyer’s access; you can also restrict access on a disputed order.
Etsy You, in Shop Manager, within 180 days of the payment being processed 6.5% transaction fee and the processing fee (in proportion); the $0.20 listing fee only if you cancel Etsy answers the card network; you must send any information it asks for within 5 calendar days None listed on the pages we read You can’t set a return policy on digital listings. Etsy can take chargeback amounts back from your payment account.

What a refund costs on PayPal and Stripe

If you sell through Payhip, Sellfy or your own website, the processor’s rules apply directly to you:

  • Stripe doesn’t return its original processing fee (2.9% + 30¢ on a US card) when you refund. A dispute costs a $15 dispute received fee, which Stripe doesn’t return even if you win, and a $15 dispute countered fee if you respond, which you get back only if you win. Card networks typically let buyers dispute for 120 days after the payment, and while a dispute is open you can’t refund outside it.
  • PayPal charges nothing to make a refund, but the fees you paid to receive the payment (3.49% + $0.49 for PayPal Checkout in the US) aren’t returned. Its standard dispute fee is $15 in the US. PayPal waives it for inquiries that never become a claim, cases you settle with the buyer, and claims the buyer files with PayPal as unauthorized. Sellers with a dispute rate of 1.5% or more and over 100 sales in three months pay a higher fee.

One $20 sale, refunded or charged back

A $20 digital download bought by a US buyer with a card (PayPal account on the PayPal lines). We leave sales tax out to keep the math simple. “Net” is what you end up with after the sale and the reversal, compared with never having made the sale; the buyer gets the full $20 back in every case.

Platform and payment You keep on the sale Net after a full refund Net after a lost chargeback
Gumroad (Gumroad processes the card) $16.62 −$0.88 −$0.88 (no seller dispute fee listed)
Lemon Squeezy $18.50 $0.00 −$15.00
Payhip Free + Stripe $18.12 −$0.88, or −$1.88 if Payhip keeps its 5% −$15.88 to −$16.88; $15 more if you counter and lose
Payhip Free + PayPal $17.81 −$1.19, or −$2.19 if Payhip keeps its 5% −$16.19 to −$17.19
Sellfy + Stripe $19.12 −$0.88 −$15.88; −$30.88 if you counter and lose
Sellfy + PayPal $18.81 −$1.19 −$16.19
Etsy $17.65 $0.00 if you also cancel, −$0.20 if you don’t Not stated on Etsy’s pages; −$2.35 if none of its fees come back

How we got there:

  • Gumroad: fee 10% + $0.50 = $2.50, processing 2.9% + $0.30 = $0.88, so you keep $16.62. A refund returns the $2.50, so you’re out the $0.88 processing. Gumroad’s chargeback page says you cover the refunded amount and processing fees and Gumroad returns its platform fee, so a lost chargeback lands in the same place.
  • Lemon Squeezy: platform fee 5% + $0.50 = $1.50 on a US card, so you keep $18.50. A refund takes $20 minus the $1.50 fee ($18.50) from your next payout; a chargeback takes that plus $15.
  • Payhip Free: Payhip’s 5% = $1.00, plus Stripe $0.88 (you keep $18.12) or PayPal 3.49% + $0.49 = $1.19 (you keep $17.81). On a refund the processor keeps its fee. Payhip doesn’t say whether its own fee comes back, so we show both cases. A lost dispute adds the $15 fee.
  • Sellfy: no Sellfy transaction fee (you pay its monthly plan instead), so only the processor’s fee and the $15 dispute fee count. On Stripe, countering and losing adds the $15 countered fee; even a won Stripe dispute costs the $15 received fee.
  • Etsy: $0.20 listing fee, 6.5% transaction fee ($1.30) and 3% + $0.25 processing ($0.85), so you keep $17.65. A Shop Manager refund credits the transaction and processing fees, and the listing fee too if you cancel.

The pattern: if a buyer asks for a refund on a $20 download, giving it back costs you at most a couple of dollars. Letting it turn into a chargeback costs about $15 on Lemon Squeezy, Payhip and Sellfy, whether or not the buyer was right.

How to keep chargebacks down

These come from the platforms’ own advice:

  • Answer refund requests quickly. Gumroad notes that some buyers open chargebacks simply because they can’t reach the seller, and Sellfy says fast replies often settle a problem before it becomes a refund request or a chargeback.
  • State your refund policy on the product page. Gumroad includes the policy you set in any card or PayPal dispute; Sellfy suggests stating a no-refunds policy clearly if you have one. A no-refunds policy doesn’t stop chargebacks: card networks still allow them.
  • Describe exactly what the buyer gets (file type, pages, license terms) so it can’t feel “not as described”.
  • Use a recognizable name. Gumroad’s statement descriptor starts with “gumrd.com” followed by your name or product, so use your brand as your full name if that’s what buyers know.
  • Keep the evidence. Payhip shows the download date, time, browser and IP address for each customer, and Sellfy keeps an Activity log for each order; both suggest screenshots for disputes.
  • Refund, don’t fight, when the buyer has a point. And when Stripe flags a payment with an early fraud warning, its own analysis says refunding pays off on charges about the size of your dispute fee or smaller.

Best for

  • Gumroad: sellers who’d rather not handle disputes; Gumroad fights them and doesn’t list a dispute fee for its own sales.
  • Lemon Squeezy: sellers who want the platform to deal with chargebacks and accept a $15 fee when one happens.
  • Payhip and Sellfy: sellers who want their money straight in PayPal or Stripe and are happy to manage refunds and disputes there.
  • Etsy: marketplace sellers who refund now and then; the fees come back when you refund through Shop Manager.

Downsides

  • Gumroad: the highest fee on direct sales, and the card processing part isn’t returned on a refund. Gumroad can refund buyers on your behalf within 90 days, and a high dispute rate brings an enforced refund policy or a 25% reserve.
  • Lemon Squeezy: $15 per chargeback, and it can refund buyers within 60 days even if you have a no-refunds policy.
  • Payhip: you handle every refund and dispute yourself, and its pages don’t say whether its fee comes back on a refund.
  • Sellfy: the same, and Sellfy support can’t help a buyer with a refund or step into a dispute.
  • Etsy: the buyer’s bank or PayPal, not Etsy, decides a chargeback, and Etsy can take the money back from your account; when Etsy itself covers a refund under its Purchase Protection program, your fees aren’t credited back. Its Purchase Protection rules are written around shipped orders (shipping times, tracking), so don’t count on them for downloads.

Tools and kits for sellers

Sources

All checked 2026-10-20 on each company’s official site.

  • Gumroad, Issuing a refund (Gumroad’s fee on the refunded portion returned, processing retained; Stripe Connect and PayPal Connect sales: processor keeps its fees and you cover Gumroad’s and the processor’s fees): https://gumroad.com/help/article/47-how-to-refund-a-customer ; Gumroad’s fees (10% + $0.50; card processing 2.9% + $0.30; refund rule): https://gumroad.com/help/article/66-gumroads-fees ; Chargebacks on Gumroad (you cover the refunded amount and processing fees, platform fee returned; 72/120-hour statement window; Connect disputes fought in your own Stripe or PayPal; 1.5% reserve rule; 1% enforced refund policy; “gumrd.com” descriptor): https://gumroad.com/help/article/134-how-does-gumroad-handle-chargebacks ; Gumroad’s refund policy (Gumroad may refund within 90 days to prevent chargebacks; Brazil 7-day withdrawal): https://gumroad.com/help/article/51-what-is-gumroads-refund-policy ; Set a custom refund policy (policy included in card and PayPal disputes): https://gumroad.com/help/article/335-custom-refund-policy
  • Lemon Squeezy, Refunds and Chargebacks (refund minus platform fee deducted from next payout; may refund within 60 days; chargeback refund minus platform fee plus $15 dispute fee; suspension for too many chargebacks): https://docs.lemonsqueezy.com/help/payments/refunds-chargebacks ; Fees (5% + $0.50 on the order total; +1.5% international, +1.5% PayPal): https://docs.lemonsqueezy.com/help/getting-started/fees
  • Payhip, How Do I Refund a Transaction? (refund in PayPal or Stripe): https://help.payhip.com/article/147-how-do-i-refund-a-transaction ; Refund Request (Payhip doesn’t hold funds and can’t issue refunds): https://help.payhip.com/article/281-refund-request ; PayPal Disputes (download date, time, browser and IP as evidence; 30 days to respond): https://help.payhip.com/article/159-paypal-disputes ; Pricing (Free 5%, Plus $29/month + 2%, Pro $99/month + 0%; PayPal and Stripe fees extra): https://payhip.com/pricing
  • Sellfy, How to refund an order (you issue refunds through PayPal or Stripe; Sellfy can’t refund or contact processors; Activity log as evidence; full refund removes access; restrict access): https://docs.sellfy.com/article/28-how-to-refund-a-transaction-on-paypal ; Pricing (0% transaction fees): https://sellfy.com/pricing/
  • Etsy, How to Issue a Full or Partial Refund (transaction and processing fees refunded; listing fees credited if canceled): https://help.etsy.com/hc/en-us/articles/360002089188-How-to-Issue-a-Full-or-Partial-Refund-For-an-Order ; Payment Processing Fees (3% + $0.25 in the US; credited proportionally on refunds): https://help.etsy.com/hc/en-us/articles/115015628847-What-are-Payment-Processing-Fees-for-Selling-on-Etsy ; Etsy Payments Policy (refunds within 180 days; chargebacks: Etsy responds, seller sends information within five calendar days, Etsy may recoup funds; fees not credited on Etsy-covered refunds): https://www.etsy.com/legal/etsy-payments/ ; Chargebacks on Etsy: https://help.etsy.com/hc/en-us/articles/4403482405527-Chargebacks-on-Etsy ; How do I Set Return Policies on My Listings (no return policies on digital listings): https://help.etsy.com/hc/en-us/articles/7869401615255-How-do-I-Set-Return-Policies-on-My-Listings ; Purchase Protection for Sellers: https://help.etsy.com/hc/en-us/articles/5850122619287-What-is-Etsy-s-Purchase-Protection-for-Sellers ; Fee Basics (6.5% transaction fee, $0.20 listing fee): https://help.etsy.com/hc/en-us/articles/360035902374-What-are-the-Fees-and-Taxes-for-Selling-on-Etsy
  • Stripe, Refunds (original processing fees aren’t returned): https://docs.stripe.com/refunds ; How disputes work (120-day typical window; no refunds while a dispute is open; received fee not returned, countered fee returned if you win; early fraud warning guidance): https://docs.stripe.com/disputes/how-disputes-work ; Pricing (2.9% + 30¢; $15 dispute received fee; $15 dispute countered fee): https://stripe.com/pricing
  • PayPal, Merchant fees (PayPal Checkout 3.49% + $0.49; refunds: no fee to refund, original fees not returned; standard dispute fee 15.00 USD): https://www.paypal.com/us/business/paypal-business-fees ; What is the PayPal Dispute Fee (when it applies, when it’s waived, high-volume rule): https://www.paypal.com/us/cshelp/article/what-is-the-paypal-dispute-fee-and-why-was-i-charged-one-help349