I'm disgusted with Shopify!
We recently received a chargeback for £1,747.25 for an order that was 3D Secure, and signed for (with proof) by the customer.
We shipped the item to the address the customer checked out with.
We also provided proof of customer identification (their passport) and we provided proof of shipping (UPS Label & Tracking) as well as the customers signature.
But we somehow lost the dispute "The customer’s bank reviewed the chargeback response and has sided with them."
Shopify told me there is nothing they can do about it and we need to take it up directly with the bank. They then proceed to tell me they are unable to tell me who the customers bank is! So how exactly am i supposed to take it up with the bank? They are now advising nothing can be done at all, and we are welcome to contact their legal team.
We are considering legal action against Shopify now.
Have you had any luck with this ? This is also a major concern for me as a merchant looking to sell high value items on Shopify. With PayPal there is obviously seller protection which comes at a higher cost as a gateway, but with Shopify it seems they don't want to protect merchants at all. I would have thought 3D secure would eradicate problems like this/shift the liability so that the merchant isn't paying the price for the fraud.
I'm sorry to hear about your bad experience with Shopify pay. As Shopify has mentioned there is really nothing they can do with the chargeback because they are just the intermediary between the customer and the bank. Unfortunately, your legal action against Shopify would hold little no value since it's already written in the terms of service to protect Shopify's legal end.
The sad truth is that most banks are the real culprit here and they will give little to no reason at all on their decision process and will most likely side with the customer's end. Merchants mostly lose out here despite the evidence of proof of customer identity.
Your best bet is to file a complaint against the bank or payment process with the better business bureau or the FCC and contact Stipe to see if you can escalate your claim. They will have to respond to you if you file a complaint.
I hope this helps you a bit to get your money back.
"Unfortunately, your legal action against Shopify would hold little no value since it's already written in the terms of service to protect Shopify's legal end."
Oh you think so? Does Shopify's corporate counsel agree with your assessment if two or more clients file a complaint with a U.S. Attorney and initiate a class action suit?
Allow me to please help you with this arrogance... the class might actually lose but Shopify would PAY BIG... corporations don't get protection from gross negligence just because of their contract.
Thats really an interesting problem. I really like Shopify but this makes me a little nervous...
We had a different PSP and credit card acquirer in the past. We had 2 contracts, knew who is responsible for what and had their contacts in case of fraud.
Now we are using Shopify Payments and they fulfill both parts at once. So we have only one contract, and therefore I would expect that Shopify Payments is my credit card acquirer...?
I have neither a direct contract with Visa or Mastercard nor with an acquirer like PayOne.
"We and Shopify" are the only legal entities in the contract at Shopify Payments (or do I get this wrong?)
That being said... what's the strategy of Shopify to help their merchants?
The 3D-Secure procedure reverses the burden of proof ... The buyer has to prove that he has not entered the 3D-Secure code.
Shopify is way out of the industry norm on this. I had someone order a book and it was delivered. I have proof of delivery from the post office. Shopify has a fully automated system that they use for chargebacks and effectively they don't get involved. As a result I lost the case and was charge their punitive $15 penalty fee. Their support in this area is comical, the support agents have no clue what they are talking about and their responses don't make any sense and are contradictory.
I also sell through eBay, Amazon and another website run through Bigcommerce where I use paypal as my merchant processor. In all instances if you have proof of delivery you always win a dispute when the customer says they haven't received an item. Shopify believes they are best in class with their payments platform but they are way out of synch with the rest of the industry.
This is something they need to fix and not give cute responses to on their forum or when you ask for help.