Chargeback Dispute

Solved
FWoodwardWSS
Tourist
6 0 5

A customer of ours initiated a chargeback against an order that had already been refunded. Why doesn't Shopify protect its merchants from this type of potential fraud by filing disputes for lack of grounds on behalf of the merchant?

Accepted Solution (1)

Accepted Solutions
Jason_Beacon
Shopify Partner
228 10 42

This is an accepted solution.

I'm sorry to hear you got a chargeback. Shopify's payment system is handled by Stripe, so it's really up to Stripe to dispute the chargeback on your behalf. As you have already mentioned that you have already refunded the order, you should not have an issue resolving the case quickly and even have your chargeback fees In any, refunded.

If you refunded only after receiving the chargeback, then it could cause issues with the case and you often will have to let the payment gateway provider know that you are willing the close the case by refunding them. Most chargeback cases can take up to 1 week to resolve. 

In addition, Shopify has a basic fraud analysis. I recommend you look into that if you haven't, yet.

Decrease fraudulent orders, stop chargebacks with Beacon. The most customizable fraud and risk management system built for Shopify businesses

https://apps.shopify.com/beacon

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Replies 20 (20)
Jason_Beacon
Shopify Partner
228 10 42

This is an accepted solution.

I'm sorry to hear you got a chargeback. Shopify's payment system is handled by Stripe, so it's really up to Stripe to dispute the chargeback on your behalf. As you have already mentioned that you have already refunded the order, you should not have an issue resolving the case quickly and even have your chargeback fees In any, refunded.

If you refunded only after receiving the chargeback, then it could cause issues with the case and you often will have to let the payment gateway provider know that you are willing the close the case by refunding them. Most chargeback cases can take up to 1 week to resolve. 

In addition, Shopify has a basic fraud analysis. I recommend you look into that if you haven't, yet.

Decrease fraudulent orders, stop chargebacks with Beacon. The most customizable fraud and risk management system built for Shopify businesses

https://apps.shopify.com/beacon
maurant
Excursionist
31 0 13

Hi I got a chargeback on an open order from a customer. The order is still in transit and it's taking a little longer to ship because of the Chinese New Year. They're still going to receive the order either way. Can the customer even get away with refunding an order that is still in transit? 

valuablebook
Excursionist
12 0 20

Shopify is way out of the industry norm on this. I had someone order a book and it was delivered. I have proof of delivery from the post office. Shopify has a fully automated system that they use for chargebacks and effectively they don't get involved. As a result I lost the case and was charge their punitive $15 penalty fee. Their support in this area is comical, the support agents have no clue what they are talking about and their responses don't make any sense and are contradictory. 

I also sell through eBay, Amazon and another website run through Bigcommerce where I use paypal as my merchant processor. In all instances if you have proof of delivery you always win a dispute when the customer says they haven't received an item. Shopify believes they are best in class with their payments platform but they are way out of synch with the rest of the industry.

This is something they need to fix and not give cute responses to on their forum or when you ask for help.

valuablebook
Excursionist
12 0 20

The other thing I would suggest doing, which Shopify doesn't highlight very much is simply turn off Shopify payments as an option. You can turn on paypal or other providers who will treat you more fairly.

LuPro
New Member
2 0 3

How to turn off shopify payments?  Tired of the fraudulent chargebacks and incompetenent Shopify support.

valuablebook
Excursionist
12 0 20
Go into "Settings" and then "Payments" if you then click on "Shopify
Payments" there is a button to turn it off and deactivate it, you can then
go into Paypal or other payment providers and turn them on. Highly
recommend as it gets you away from "worst in class" payment support for
merchants
aep001
Tourist
6 0 10

100% agree.  Refunded a customer for an order minus the freight because the customer typed in the wrong address and the order was returned to us. The customer then initiated a chargeback a week later and Shopify took the full amount. We lost the chargeback and the customer got the initial refund plus the total amount of the order.

 

THIS IS BS SHOPIFY. 

valuablebook
Excursionist
12 0 20
Sorry to hear you were burned also. Best solution is to into the "Settings"
section and then into "Payments" and turn off Shopify payments and turn on
a payments provider that actually has a respectable chargeback process that
protects sellers.
JimBurke
Tourist
6 0 2

Hi Jason,

You mention the Shopify Fraud app.  From what I have been able to ascertain it is good for stopping cards from other countries yet it fails miserably when trying to get it to warn about failed CVC/AVS as most of the settings seem to be reactive rather than proactive.  i.e. you can stop fraud once you have the CC number or other details that further orders can be matched to.

Would you mind giving some examples of how you have set this up.

Thanks!

 

aep001
Tourist
6 0 10

The fraud app is not available to all merchants.  It was recommended to us by Shopify only to learn that it was not an option.

 

Again, Shopify is out of the norm on this. If I were Big Commerce, I would jump on this and point it out every chance.

Shopify allows for double chargebacks and they refuse to fix it.  I brought this up with one of Shopify's biggest partners and they were totally baffled that Shopify would take the stance they have.  

From the Shopify support rep " I've given you all the correct information to inform you on what occurred in this case and as there is no further action that can be taken in the matter of this order I won't be responding to further emails on the subject.""

Jason_Beacon
Shopify Partner
228 10 42

Hi @JimBurke 

May I ask which Shopify app are you referring to? The trick is to have a system in place to hold orders and allow for automated/manual review before an order goes through. This can be done through a manual payment capture and having a system in place like https://apps.shopify.com/beacon so that any good orders are automatically captured while suspicious orders are held for further review or verification.

Decrease fraudulent orders, stop chargebacks with Beacon. The most customizable fraud and risk management system built for Shopify businesses

https://apps.shopify.com/beacon
JimBurke
Tourist
6 0 2

Hi Jason,

Thanks for the reply, I thought you were talking about the free Shopify fraud app.  We do automatically capture payments, will take a look at the app you have just mentioned.

Cheers

Jason_Beacon
Shopify Partner
228 10 42

@JimBurke 

Yeah, the free Shopify fraud app is very limited in terms of functionality and doing deeper fraud analysis. You can't really customize it for your shop's workflows. For more advanced functions and automating the filtering of orders, you will need a dedicated app.

 

Decrease fraudulent orders, stop chargebacks with Beacon. The most customizable fraud and risk management system built for Shopify businesses

https://apps.shopify.com/beacon
blackpeekaboo
New Member
1 0 0

This response is dead on. Same experience through chat online, today. Charge back occur. My request was a simple five-letter word" what is the case number? I have requested four times for the chargeback case number. No one can locate a case number or a reference number. So, I can assume this is fraudulent chargeback on Shopify end. NO EMAIL FROM BANK. NO EMAIL FROM CUSTOMER. ONLY ONE NOTICE FROM SHOPIFY.

  • Again, pass the request to management.
  • That's alright, I will do so Dana

I will consult further on this and once I hear from my colleagues on this end, I will reach out to you with the feedback

  • FYI, I am a regional manager for retail company. I have 40 years plus experience.
  • I understand Dana, my apologies if I may have given you the impression that I was doubting your request. Please bear with me as I consult for further information for you

I am now going to go ahead and move this to e-mail. Once I get the response, I will follow up with you on e-mail. Once the chat ends, you will receive an automated e-mail that includes a transcript of this chat as well

Have a pleasant rest of your day on that end, thank you for reaching out today.

 

Judi_Henderson-
Shopify Partner
1 0 0

I have had the exact same issue and have been caught in a loop between Amex and Shopify. Each one pointing to the other as responsible. Customer ordered 2 items, we shipped only one by mistake. Customer asked for a refund which I promptly did, but since Amex took a while to process the refund, customer filed a chargeback. Despite the fact that I sent over PROOF of the refund AND the delivery, Amex sided with the customer. So customer got refunded twice, which came out of my account plus the chargeback fee.

 

After getting NOWHERE with Shopify I was able to get ahold of someone directly at Amex who with some digging was able to find this transaction. And admitted that they made a mistake and were sending the chargeback back to review. Now they tell me that since they are not my merchant processor only Shopify can refund the money and Shopify (as usual) says there is nothing they can do. 

 

Fortunately the amount of not the much and I rarely get chargebacs. But this experience has been me so angry with Shopify I get much better support with Paypal when there is a dispute. 

Jen_Kidd
Excursionist
28 0 12

Shopifys “fraud protection” is a joke. I just had a customer WIN TWO chargebacks, back to back! Even after I submitted plenty of evidence & proof that she was 100% lying, including our return policy, etc. So not only am I out a TON of merchandise, (which she kept as well) I also had to fork over $ back to her PLUS pay extra chargeback fees! Idk what we are paying for, for the Shopify “protection”! What exactly are they even protecting us from?? Furious over how this went down! If every customer pulled this lady’s same scam, there wouldn’t be any Shopify stores! This is crazy & just made me reconsider having my store thru Shopify. Unreal. 7 years & this is how they protect me. 

Jen_Kidd
Excursionist
28 0 12

YEP! Just happened to me! TWICE! Same lady- back to back, big orders too! So not only am I out of merchandise, she also got PAID $ from me! Plus I had to pay the 2 Shopify chargeback fees! Shopify does NOT protect their merchants at all. 

valuablebook
Excursionist
12 0 20
The only way they will change their practice is if you and thousands of
other customers turn off shopify payments (where they make most of their
money) and use Paypal or other providers
Jen_Kidd
Excursionist
28 0 12

Doing this now!! I rarely have things happen like this, but this had made me so furious with Shopify, I’m happy to do anything to make them see how crappy they’re treating their merchants! Thanks for the heads up! 🙂