Can we file a class action against fraudulent charge backs?

[store62704]

Anyone interested in filing Class Action against these charge backs?  I provided proof buyer received product - USPS tracking number - yet bank took money out my account and charged me $15.  The bank fraudulently stated buyer never received product, is refusing to refund the charge back and making me pay to be taken advantage of.  It's mail fraud.  Anyone tired of being taken advantage of and wants this issue investigated or rather a Class Action please let me know.

[FreedomFloral]

Um, yes. Its absolutely absurd. We have received multiple chargebacks on orders that the customer placed in person and walked out the door holding. Its fraud and the banks and Shopify are leaving small businesses holding the bag. Its unacceptable. Would participate in a class action if there was one and will be looking to take my business elsewhere asap.

[RelaxAcare15]

I’m in. When you’re ready I want a class action, the worst part is it’s a business. Not only do we lose the chargeback but shopify charges us! Sickening

[amiraelhadi]

I have the same issue here! The scammers are really damaging my business!

How can I charge them? or did anyone find any solution!

[Billiards2]

Shopify markets Shopify Protect as a safeguard for merchants against fraudulent chargebacks. But what happens when a buyer lies about the reason for a chargeback, and even admits it after receiving the product — yet Shopify still denies the claim?

This is another recent case:

A buyer placed an order, received the merchandise (confirmed via UPS delivery), never requested a return or cancellation, and filed a chargeback using the false reason code: “refund not received for a canceled or returned order.” None of this was true. We provided:

Proof of fulfillment and delivery

A posted return policy requiring contact before returns (never contacted)

Email from the customer admitting they received and kept the product

Admission that they would be “paying us back” and contacting their bank

Despite meeting the criteria for protection, Shopify denied the claim because of the chargeback reason code, claiming it falls outside the covered scenarios.

Let’s be clear: if buyers can simply select the wrong reason to sidestep Shopify Protect, and Shopify will knowingly allow it — then Shopify Protect is meaningless.

This isn’t just a policy failure. It may rise to:

Breach of implied contract – Shopify promises protection under clear conditions; we fulfilled them.

Detrimental reliance – Merchants ship goods in good faith, relying on Shopify’s guarantee.

Negligence or bad faith – Denying claims where fraud is proven undermines the integrity of the program.

This isn't an isolated experience — it reflects a systemic weakness in how Shopify enforces (or chooses not to enforce) its own protections. The message being sent to merchants is: even if you do everything right, we might still leave you hanging.

Other sellers: if you've experienced similar denials under Shopify Protect despite following all criteria, I encourage you to speak up. These patterns need to be addressed — or Shopify should stop advertising this as protection at all.

[Billiards2]

When Shopify introduced Shopify Protect, I was relieved. I thought: finally, some peace of mind when a buyer tries to scam the system.

Unfortunately, after multiple experiences, it’s clear: Shopify Protect is failing honest merchants, and in some cases, enabling buyer fraud.

Let me explain.

Case in Point: Order #12074

A customer ordered a cue case from my store. We upgraded him for free to a higher-value model after communicating with him directly. He confirmed in writing that he accepted the substitution. The case was delivered on January 2, 2025, with full UPS tracking. We never received any complaint, refund request, or cancellation notice. He kept and used the merchandise. Now almost 4 months later, he filed a chargeback — claiming the charge was for a “canceled subscription.”

We submitted a thorough dispute, including all emails and proof of delivery. Shopify’s response?

“Not protected by Shopify Protect – Shopify Protect does not protect subscription canceled chargebacks.”

In other words, because the buyer fraudulently selected an incorrect reason code, Shopify revoked the protection they promised me — even though I met all Protect conditions, and the chargeback was clearly dishonest.

Even worse: the customer later admitted in writing that he kept the product, received the refund, and intended to pay later. He said:

“I’ll send the money again when I have it.”
“So if you gotta sue, sue.”

This wasn’t a misunderstanding. This was theft. And Shopify still refused to stand behind me.

This Isn’t Just One Order

This isn’t my first denial under Shopify Protect. I’ve had several cases where I followed all rules, only to be told that I wasn’t covered — usually because the buyer manipulated the chargeback category.

So here are my questions:

• Why are merchants punished because a buyer chooses an inaccurate chargeback code?

• Why does Shopify Protect not allow for appeal or reconsideration when new evidence (including a buyer's admission) comes to light?

• How is this truly "protection" if we're left completely exposed — even when we do everything right?

What Can We Do?

I’m now considering filing formal complaints with:

• The FTC for deceptive advertising of Shopify Protect

• The Better Business Bureau

• A class action if I learn other merchants have faced the same

If you’ve had a similar experience — if you’ve lost money despite doing everything right under Shopify Protect — I’d love to hear your story.

Merchants deserve better. We are the backbone of Shopify’s business. If we can’t trust Shopify to protect us from clear fraud, what are we really paying for?

[RelaxAcare15]

100% there needs to be a class action lawsuit,
We sell big ticket items and many buy knowing they will file a chargeback
prior to the transaction as they get a free item. Shopify, visa and the
bank system has neglected any type of system that protects merchants and
solely protect the consumer. This is so frustrating considering a
percentage of consumers illegally do this knowing the outcome will be in
their favour. This is destroying businesses and allowing customers to
virtually steal from all of us. The response back is basically saying” bake
this into your price” how about they bake it into their price and they can
take the loss. We have suffered enough and a class action is a must. We pay
visa and shopify per transaction and get zero protection back. Why are we
paying? Where is our protection? Chargebacks are on the rise and still no
new systems are being met to manage this growing problem. Now we have to
constantly sue customers to get our money back ( we’ve won them all and
every judge sides with us after reviewing our policies) however this
further effects our brand and growth when we have to sue customers. It’s
sickening and Shopify has turned their backs on us but want to get paid at
month end regardless of any outcome. Check their trust pilot reviews and
you’ll see first hand how horrific everyone’s experience is.
It’s time to fight back

[KPoss]

I would be in.  The credit card companies collect huge fees.  What are we paying those fees for?  I thought we were paying those fees to guarantee we get paid.  Credit card companies need to be accountable for fraud that their customers are committing or enabling by losing control of their accounts.  If we provide the service or product, we should be paid.  More and more there is a group of people using this to get free product.  

Even when we verify orders with customers, get driver's license photo, have photo proof of delivery onto their doorstep......our chargeback challenge is still lost.  How do the banks get to decide?  They have zero interest in being fair.

[RelaxAcare15]

100% we are in. Please email us at info@Relaxacare.com

shopify, the banking system, the merchant provider all know how illegal this is and they allow it. Essentially allowing customers to come in, rob us and then we have to pay these providers after being robbed. 
why are we paying a transaction fee if there is no protection?  Why are we paying a fee to be on shopify if there is no protection? 
did you know the final outcome is the customers bank who gets to decide on the outcome? This process is the most biased opinion and all small businesses are suffering due to illegal chargebacks which is on the rise in Canada.

the worst part about this is we have zero rights as a business, shopify tells us they are not held responsible but wants their money even after a chargeback and then puts a system in place on their shop app that we as vendors have to stay under 1% chargeback ratio.

How do we stay under 1% when it’s extremely easy for a customer to file a chargeback and win it even though we provided them with the item. It’s complete ludicrous and we are 100% ready to join a class action lawsuit. Systems need to change. Ironically banks if they are robbed the person robbing goes to jail but the new digital way to rob a business is a chargeback and then these banks shopify and merchants literally charge a fee for it happening to us and these big companies are capitalizing on these chargebacks. It’s sickening and they turned robbery into a business.

we are in. Please email us. Let’s get these big corporations and take them down.  

[RelaxAcare15]

Let’s get this started. I’m sick of zero terms and conditions. I’m sick of uneducated customers dictating the terms and I’m sick of the losses with illegal chargebacks. We have to spend hundreds of thousands of dollars in legal fees just to get our product or money back. This should be against the law. 

[MosesConstanti]

im in.

[spinspirit]

This very same situation happened to us, shipped $600 plus to the UK, and the customer was required to go to customs to pick up the package. Standard procedure.... customer had to have shown some kind of identification, and signed a release I assume, and yet, the chargeback regardless of my defense went thru... $600 plus down the drain plus chargeback fees. I never was given the opportunity to speak with the card issuing bank, and I can bet my rear end, SHOPIFY did not represent me fairly... just let the chargeback go thru. And after it was over SHOPIFY had the nerve to tell me to go purchase some app.  Here's another problem I have... we get the occasional fraud alert, and if I determine it is fraud, I cancel the order (refund automatic), and yet I get hit with a fee. For what? 

[Pach]

I am in, same thing I have provided proof of delivery, email exchange with customer product received with USPS tracking # yet the bank took dack money and charge me a fee.

[boutique504]

Try a $3500 in-store purchase. Submitted receipt and metadata information from the approved charge. Along with photo and video evidence of the purchase from our security cameras. Along with a police report. They aren't doing anything. All you can do is chat with worthless drones who repeat the same thing. Shopify is our merchant services provider, yet the refuse to liaise between us and AMEX. Oh and the people who committed the charge back have been arrested.

[RelaxAcare15]

It’s a shame, visa and shopify have allowed customers to steal. Forget going into a bank and robbing them for 10k, just buy something expensive and file any chargeback you want.

We now sue customers, we’ve updated our terms and conditions and they agree to that.

[boutique504]

How much does that cost you on average? Is it even worth it?

[spinspirit]

the point regarding value to a specific account might be $600, but for
Shopify, these fraudulent chargebacks could be in the thousands.... do the
math. So it is unjust to make it financially unworthy when the propagator
of the issue is raking in millions.

[spinspirit]

the issue with us regarding EVERY chargeback that is fraud on the purchaser
side is we can't get any back information to verify the card and the
purchaser are the same as we show in our limited information POS. I managed
fraud orders for years with a computer company, and even helped the FBI
catch one of the credit card fraud abusers in New York. I know the
information that needs to be available to effectively identify fraud, but
that information is not made available such as Addresses on file, Phone
number on file, etc.... the key: ON FILE. SO if SHopify's fraud alert
suggests purchase is low, and then you proceed only to get stiffed, there
is a problem.