We received what we thought was a highly fraudulent order. The billing address didn't match the card holder's address so we never fulfilled the order. We called the mobile number of the customer but the number doesn't work. We also emailed them to ask them to contact us - we never heard back. Shortly after, a chargeback was issued. We're not sure if this was done by the actual cardholder (if the card was stolen). So, the question is, do we issue a refund now, or should we wait for the result of the chargeback? We have already submitted our evidence for it but do not wish to be liable for any charges.
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Ash here from the Shopify team. Welcome to the Shopify Community!
Chargebacks are not an ideal situation, and I appreciate you wanting to make sure this is managed properly. You've asked a great question, and I'm happy to provide some insights on how to proceed. When a chargeback is issued, it's best to not refund the actual order until the chargeback is resolved. This is because if you were to refund the order, and the cardholders bank still sides with them in their investigation, the cardholder will end up getting their money back from the chargeback, and from the refund.
Refunding an order in full can prevent chargebacks, but if the chargeback has already been started, then it is best to follow through the process of submitting evidence, and allowing the bank to complete their review. If you're able to contact the customer, and they agree to drop the chargeback- be sure to obtain evidence from their bank that the chargeback has indeed been cancelled before deciding how to proceed.
I suggest reading over our help documents on chargebacks and inquiries, as this will help you fully understand the chargeback process, and determine how to proceed in different situations. We also have a great document here I suggest checking out, which covers strategies to prevent chargebacks on your store.
Let me know if you have any further questions by replying to this post. I'll be happy to offer any additional information, and provide clarification on any points if needed.