Chargebacks and Fraudsters

[AG13]

Hello. I'm trying to reduce the loses caused by chargebacks as I recently lost about $1000 on one order. I do not want to beat dead horse but there are some questions and ideas that might help us to avoid this situation.

Best to my understanding, there is no way to protect yourself against them. You can have your TOS. You can have the customer check the "I have read, understand and agree with the Terms Of Service" checkbox before placing an order. You can submit your evidence to the bank. The fraudster has unfair advantage and the bank will most likely side with him / her.

It seems that Shopify puts very little effort or just pays lip service to ever growing complaints of shop owners being robbed left and right. As far as they are concerned, they get their cut either way, so no need to do anything. I'm not complaining here. Just stating the facts for the discussion as I hope we can exchange ideas and things that work with each other.

As for me:

1. I restated the TOS and have each customer check the TOS checkbox before placing the order.

2. Sometimes, on questionable orders, I will require a signature on delivery.

3. I installed and I'm using the Chargeflow app. This app handles the chargeback process for you for a small fee and I have to say has good success rate.

4. I also installed an app called Cart Lock that can block customers based on previous actions. With this app you can prevent repeat offenders from placing an order.

5. I installed an app called Bad Customer. This app will not block anything but will tag the order on certain conditions (previous chargebacks and refunds). Also it claims to crossreference the bad customer data with 3rd party services (Scorecard, Sardine AI, D&B Finance Analytics). The tag is not prominent on the order page but you can add a Tag column to your orders page and it will be very easy to see. 

Moving on to ideas that I am looking for some input. 

1. Does anyone know or can create a Shopify app that can store and share people that use chargebacks. If not possible does anyone know of any such possibility outside of Shopify?

2. Does anyone know if there is a possibility of integrating a contract into the Shopify order that will have to be digitally signed (Dokusign)?

Please let me know if you have any comments on this issue.

Thank you and very best regards.

[dylanpierce]

Hi @AG13 

You've pretty much summed up the asymmetric state of chargeback disputes. The banks have a bias towards ruling towards the customer. The customer is theirs at the end of the day, they have an account with the bank. The reviewer doesn't have any skin the in game, it takes good solid evidence to overturn the chargeback. You can still move these claims to small court outside of the agreement and rule against the fraudster if your evidence is good enough.

The other alternative is to collect more evidence from the customer on these highest risk orders. That way you have a deterrent and even stronger evidence for your claim.

I assume you're based in the US and not in Europe.