Chargeback - Any chance of winning a dispute?

[JaxBags]

To my shock a few days ago I have received our 1st chargeback for a $450 order plus fees. Because the customer was local I originally texted him to see whether he was happy for me to drop off the goods in person. He messaged me back, I then called him and he said "yes great, leave them outside the door if we are not home and they will be safe there". I dropped off the goods and next day asked him to confirm he was happy with everything....no response. A week later I get this advice from Shopify that this has been reported as a fraudulent transaction to the bank. Now the money has been deducted from our account along with a $25 charge. I have submitted the evidence of the text message and photo of the delivery in Shopify and then receive the following comment:

The chargeback response has been submitted

The customer’s bank will receive the response on January 4, 2023 at 10:00 am.

So now I have to wait a further 3 weeks just for this information to be passed on to the customers bank, let alone receive a response or outcome. I have been given zero information as to why the transaction has been reported, whether it was a stolen card or what the situation is. All attempts to contact the customer have been ignored so I guess we have just been scammed. Reading other posts on this subject it appears Shopify will do nothing to help and the bank will unilaterally decide to penalise the merchant so they dont have any liability. What a terrible process for merchants who are given no protection or even the courtesy of some consultation or informed engagement.

What are our chances or winning this dispute?

[Ivy]

Hello, @JaxBags.

I am sorry to hear you are dealing with this, chargebacks are a challenging aspect of e-commerce for sure As this is your first chargeback, I want to walk you through what a typical chargeback process looks like:

1. The cardholder disputes a credit card charge with their bank.
2. The cardholder's bank sends a chargeback request to the credit card company, and takes the disputed amount and a chargeback fee from you.
3. The credit card company asks you for evidence that the charge was valid.
4. You and gather evidence to figure out whether the charge was valid.
5. Shopify sends a response to the credit card company.
6. The credit card company reviews the evidence. The review can take up to 75 days after the response is submitted.
7. The credit card company resolves the chargeback.
8. If you win the chargeback, then the cardholder's bank returns the disputed amount to you, and Shopify refunds you the chargeback fee. If the chargeback is a partial win, then the cardholder's bank returns some of the disputed amount to you, and Shopify still refunds you the chargeback fee. If the cardholder wins the chargeback, then the disputed amount and the fee is not returned to you.

It is important to note:  Chargebacks are handled and decided upon 100% by the bank processing the payment, never by Shopify.

I cannot predict how this chargeback will go, but I do want to be clear that it is possible you could lose money. I have no way of knowing what the chances of a successful finding in your favor are, unfortunately. I would absolutely advise submitting all your evidence including emails, proof of delivery etc. This will all help to strengthen your case. 

I want to compile some information for you on how best to avoid fraudulent charges, and how to protect yourself from chargebacks in the future. I trust this helps, and I wish you good luck going forward. Thank you!

• How to respond to disputes   
• How to avoid chargebacks  
• Preventing chargebacks   
• Steps for fraud protection 

[JaxBags]

I have finally received notification that the banks decision is to side with the customer, which apparently means I have lost this chargeback dispute. I am the innocent party here who has been scammed by an online thief and yet the only feedback I get is "The customer’s bank sided with them". No explanation as to the basis for this decision or the grounds under which it was arrived at. No engagement or discussion whatsoever. If Shopify are going to facilitate payment for an order and then take it away from me after the goods have been shipped then surely you have an obligation to at least provide some clarity and visibility around the process and decision making. On one hand you say "Chargebacks are handled and decided upon 100% by the bank processing the payment, never by Shopify" and yet you do not provide any opportunity for the merchant to engage with the bank concerned or receive a reasonable explanation for the decision. The entire process lacks any due diligence, fairness or visibility and is a total disgrace to the industry. If challenged in court I do not believe it would stand up!

Please can you provide contact details of the bank concerned so that I can take up this decision directly with them.

[Ivy]

I am sorry to hear this outcome is not what you were hoping for. It is disappointing and I understand it can be a hard financial blow, especially for a small business. I'm afraid I have no access to transaction information here via the Community Forums so I wouldn't have any access to know which bank made this decision. 

I want to reassure you Shopify do provide full transparency on the chargeback process, I have walked through the steps one by one in my previous reply and I would also advise reading over the resources shared above to hopefully reduce the number of chargebacks going forward. 

Another resource you may find useful going forward is PayPal Seller Protection. PayPal provides an extra layer of security for you the merchant when a buyer does something like claim they did not receive an item that was shipped - it may be worth looking into this for future sales. I trust this helps, thank you. 

[JaxBags]

Sorry Ivy, that doesn't help. Once again you have not addressed the concerns or issues that I raised. If you dont have access to transaction information here via the Community Forums then please forward this on to someone in Shopify who looks after this area and has this information. I would like to file a formal complaint on this matter. Please advise the process for doing this. 

[mywatchbroker]

Shopify never support a paying Shopify Client against a Credit Card Company or pay them fees to use Shopify payments.  Basically if you get screwed over by a customer like we have don't expect any help from Shopify.  They simply don't care.  The 75 Day process is all about Shopify taking the cash back and holding it for an investment return before giving it back to their credit card partners.  Its all a scam.