how to deal with fraudulent orders and charge backs

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Tourist
19 0 1

hello guys so a week ago i got an order in mexico and it said high fraud risk but it looked legit so i still fullfilled the order, and it succesfully shipped and is en route to the customer, i noticed this morning the customer issued a chargeback, so i have screen shots of emails i sent and the tracking number to dispute the chargeback, but i also want to prevent future fraud....So now a few hours ago i got 3 orders from a different person in mexico but i noticed the email is similar to the the previous fradulent order! they changed a few letters in the email so its different, i havent fullfilled the order, but im wondering what the next step should be? the orders have already been paid for so i will issue a refund for all 3 orders, and i downloaded the fraud filter on shopify, and added the fraudulent email as the filter but is that it? is that all i can do??

-Fernando

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Tourist
19 0 1

ok i have an update, i spoke to the customer, and he said its legit and he is ordering my product to decorate his house, it worries me though that his email is very similar to the email of the person who issued a charge back. im tempted to just go ahead and fullfill the order and put the money aside just incase anything happens. What do you guys recomend? i told the customer to send me an email confirming his the legitimacy of his order

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Shopify Partner
43 0 9

Hi there @fmgmarket ,

My app was made for this exact problem. With it you can send a link to the customer by phone or email, then the customer can use their phone to take a photo of their ID & a selfie.

The app uses machine learning to verify the authenticity of the document & the corresponding headshot (a.k.a. "selfie"). If the photos show signs of tampering or counterfeit, you'll be warned.

This way you can verify the identity of your customers with high risk orders with confidence.

Download here: https://apps.shopify.com/real-id

The first 10 checks are currently free. I'm always happy to answer questions, just ask!

You shouldn't have to think about fraud on your Shopify store.
Ask me about
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Shopify Partner
132 5 19

hi @fmgmarket 

I wouldn't focus on just looking at the email unless the email domain belongs to a strange temporary or private email domain. You did the right thing by contacting the customer as this will further reduce the risk, but the best way to really figure out if the order is likely hood of fraud is looking at various data points like where the home address is located in correlation to the IP address and many others.

In case you are still worried about the order, I would send the shipment via signature confirmation and contact your payment gateway company to see what to do in the case of a chargeback would arise. In case you didn't know the customer has 6 months to file a chargeback, so setting the money aside for that time frame would be best ideal for you. 

I hope this helps. you. 

Decrease fraudulent orders, stop chargebacks and expand globally with Beacon. https://apps.shopify.com/beacon
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Tourist
19 0 1

so as regard to that order after i got off the phone with him i got him to confirm his orders in an email so i can screen shot him confirming his order if need be later on, but i also go another order! once again it is listed as fraudulent, and i contacted the customer via email waiting for response, i did check the IP adress of where the order took place vs the address and it wasnt the same location but it was close by, is that bad? i assume maybe he was at a friends house or somthing or at work and placed the order from his phone, but who knows... are there other ways i can check this stuff? sorry i am very new to e-commerce, but i am determined! 

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Shopify Partner
132 5 19

There is never a guarantee that the order will not be fraudulent and even Shopify's own fraud system isn't great at detecting true fraud. However, the more data you have on the order the better you are able to make a confident decision on whether or not to go ahead and process the order. If the order is relatively a low amount then I would definitely process the order after confirming with the customer while a high valued item, I will rather choose to cancel the order.

An IP address that is close by within 500 km is usually pretty good unless it was in a different country or several states apart, but still not a good indicator since bad-actors can use a VPN to closely match the address. I've written several topics on this on our site here, https://www.lizuna.com/medium. Take a look at the articles to better help you understand how to protect your business.

Again, I hope you find this a bit helpful for you. 

Decrease fraudulent orders, stop chargebacks and expand globally with Beacon. https://apps.shopify.com/beacon
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Tourist
19 0 1

awesome help thank you soo much!

so one last thing, would it make any difference if i start using the EBANX system for payment processing in latin america? maybe that can help show the banks that these orders arent sketchy cause its who im targeting, right now i just have the normal shopify pay on there and it still works fine, i mean somtimes i get abandoned carts and they tried paying so maybe that can help that too?? but im curious on your thoughts

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Shopify Partner
132 5 19

@fmgmarket Not a problem!

I don't think it makes any difference, but they might have better fraud-related data in the local region compared to a payment gateway that has more transactions elsewhere and don't know the scope of fraud activities in LA. 

My suggestion is that you should keep what works now and focus your time and effort on growing your business. The only exception if you start having a lot of customer complaints that they can't checkout because of the payment gateway turning down way too many good customers.

Decrease fraudulent orders, stop chargebacks and expand globally with Beacon. https://apps.shopify.com/beacon
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Tourist
19 0 1

ok so one last thing before this thread is done!! but some time has past and ive gotten a few orders one wasnt a high risk of fraudualent activity but the other two were... ive contacted the customers, and all that. but i am really wondering if i should use EBANX, BUT if i use that payment gateway will it mess up the shopify pay i already have set up? i tried enabling ebanx and it says that it will disable the shopify pay i currently have set up. does that mean i wont be able to accept cards for clients outside of  Latin America??? sorry i just want to know before i make any changes

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