Long Story short
First sale, this the analyst report on the fraud
I've made attempts to contact via email , and tried calling but the number seems bogus.
Not sure how to proceed, do I issue a refund? Or what's the other alternatives. I want to avoid being in a negative balance on my shopify payout.
Looking forward to the replies & tyvm.
Sorry you're having trouble with your first ever sale, that's not normal I assure you.
Shopify should give you an overall risk rating, between "Low", "Medium" and "High" based on the factors you shared as well as hidden ones.
Contacting by phone or email is one way, ID verification is another if it's a high cost order and you'd like to know their identity lines up with their payment method for sure.
If you have payments set to automatically capture the charge, unfortunately it's too late and even a refund won't save you from a potential chargeback from the real cardholder if it is a stolen card.
When you're just first starting out and have the time, I highly recommend manually capturing payments instead of automatically capturing them. Here's a link to Shopify's documentation on this practice and how to enable it: https://help.shopify.com/en/manual/orders/get-paid
Will manually capturing payments cause me to need to charge my customers twice?
No, you can think of the first checkout experience as the flow to prove the customer has authorized the charge on their card. Then you have time to review the risk and feasibility of the order on your own time.
Then you can "capture" the charge when you're satisfied this is a low risk order or that you've confirmed the legitimacy of the order. You won't need to ask the customer to complete checkout twice.
Will automatically capturing payments and then refunding immediately on high risk detection save me from a chargeback?
No. Since automatic payments will instantly capture the payment, even refunding will leave you open to a chargeback by the card holder. Not only would you be liable for the chargeback but the refund won't count towards the chargeback.
I hope this helps!
@JameelRashad I don't know your exact payment gateway or settings or the details of the order specifically, just offering advice on manual vs automatic payment capturing.
A Shopify representative would better be able to help you with the specifics, but I would continue to try to contact the customer by phone or email. If they are not responsive within a reasonable period of time I would consider cancelling and refunding the order.
In a case like this it makes sense to cancel the order and refund the amount considering the IP locations. Unfortunately chargebacks do occur occasionally with these types of transactions.
A suggestion is to pre-emptively contact the bank with the proof of the refund, this should be enough evidence against a chargeback if it were to occur. Better to be safe.
For future orders you can implement a very reasonably priced tool like Disputify that detects known fraudsters and flags them before fulfilment, to avoid fraudulent refunds and chargebacks altogether.
If you don't refund it now - I'd be prepared to fight a dispute. Disputify has a handy checklist that you can use for this, just to make sure you are as prepared as possible.
Also - I'd recommend you look at installing a range of fraud detection tools that can help prevent chargeback and refund fraud.
You can find the "Disputing a Chargeback Checklist" here: Disputing a chargeback Checklist
If you're interested - take a look at the Disputify App. We may be able to save you some headaches as you build your e-commerce empire!
Disputify App: https://apps.shopify.com/disputify