How to handle high-risk orders leading to numerous chargebacks?

[Kbeauty4u]

Hello everyone,

I have been selling on Shopify for over 2 years very smoothly with very low rate of chargeback. But recently, starting from Jun 2nd, my business received a considerable number of high risk orders with all Chinese names and they all share one shipping address which is 6215 NE 92nd Dr, Portland Oregon 97253 and it is a freight forwarding company. My staff sent emails to verify them but we did not ask for ID card or credit card info with matching name so we trusted them at some point and fullfilled the orders. Consequently, now we are receiving a lot of chargeback from these customers. They are abusing the chargeback system to get our products for free. It is also our fault to not verify these customers correctly and took the risk. Has any of you experienced this before? And do you know what will happen to our Shopify account if we got so many chargeback from high risk orders? I am so desperate right now because I know that we lost all of those products, have to deal with chargeback and fees, and get no money from Shopify because shopify payment is on hold due to this situation.

[JoesIdeas · Accepted solution]

I'm sorry to hear that, it's really frustrating how chargebacks work, almost always gets sided with the customer, even when they're clearly scamming.

I think every store I've worked with that does volume gets chargebacks, it's part of online business, so it's not abnormal to get some chargebacks.

I found this from Shopify documentation that they may suspend your payments account if "too many" - https://help.shopify.com/en/manual/payments/chargebacks.

I don't know how many is too many but if you're worried about it you could try contacting them, to be proactive about it.

Moving forward, couple of tips:

- For all high risk orders do a check with customer support (ask for identification and even a selfie if you want to be extra vigilant, and include in the email a basic agreement that they will not file a chargeback, that may help you win the case if they do).

Just explain to the customer that you've been the victim of scams lately, you don't save the information, this is just a security measure. 

- If it's not a high risk order, you'll want to then identify the type of buyer (like same address like you said) and cancel their orders.  If you're doing low volume and check every order then just cancel the order. If you don't want to manually check, Order Automator can identify orders based on data like this, and notify your support staff (or even auto cancel if you want). There's also a free version of Order Automator that includes a Fraud Guard, to alert staff or cancel high / medium risk orders. That could help you stay on top of those type of orders easier.

Good luck, I hope you're able to stop the scams happening to you.

[Su29]

Whether to suspend or not is Shopify right.

But I am a customer of mds and cancelled my order as high risk but never refund payment over 4 months already.

And can’t find a place to escalate too.

So sick of buying online.

[AthenaGaia]

Just got a fraud alert on the same address: 6215 NE 92nd Dr, Portland Oregon 97253 and googled the address to find your post, so thank you. 

I canceled immediately. Shopfiy should have some sort of alert, and you should probably cancel most of them. A few fraud alerts have been valid once we've spoken to a customer and realized they were on an VPN for work (IP not recognized).
But definitely avoid 6215 NE 92nd Dr, Portland Oregon 97253 and this one: 
8344 Northwest 66th Street 12290 Miami FL 33166 (anything at 8344 Northwest 66th Street).
I would avoid all "logistics" or "import/export" shipping places. I see a lot of eBay posts saying these places do receive the items, but claim they never did, or do a chargeback. And you also lose every shipping claim if it's landing there and has tracking that says it landed there. 
Chargebacks are beyond frustrating and yes always lost as the seller. 

Check your abandoned carts, too. I was up late one night and watched live as someone (or a robot) attempted almost 40 checkouts using different names and cards and address, all within minutes, but also for the same high value item (we sell gold, so it's tricky). All didn't make it past Shopify that time, thank goodness. So we knew to be on alert if that item sold we'd be checking every aspect of the seller. 

[Kbeauty4u]

Update: Thank you guys for the responses! Here is the update after all chargeback. I received 40 chargeback in total and lost about $12,000 value. I’m still in process of disputing the chargeback but I have no hope that I will get that money back. Sean from Shopify Safety and Trust team helped me go through the verification process and also advised me to install Fraud Control app so I have been using the app called NoFraud Fraud Protection. I also set up Auto cancel on high risk orders in this app so now I feel more relieved that those high risk orders cannot scam my business again, despite the fact that I lost so much money. Shopify released the money on hold after Sean and I worked together so thank you Sean and Shopify teams that are trying to protect sellers like us. I learnt a valuable lesson from this and it will not happen again for sure.

[Buntiform]

Are you using something like IPQS to flag the high risk orders?

[pamcake11]

Thank you for your post . We received two big orders flagged as High Risk and found your post. They are to the same address you have indicated. 

I listed the address below.

We have decided to cancel this order because of your post. Thanks for sharing. 

Pam

Kangxinyi CZ283277
6210 NE 92ND DR STE105
Portland OR 97220
United States
+15036666666

[Jay_techorzo]

The second, I see the terms high risk of fraud detected. I will cancel it. And send them an email like this for example:

Subject: Important Update Regarding Your Recent Order

Dear customer name

Thank you for placing an order with us! We appreciate your business and value your trust.

However, after a thorough review, we regret to inform you that we are unable to process your order at this time. Our fraud detection system has flagged this transaction as high risk due to certain indicators.

For security reasons, we have canceled the order and refunded the full amount to your original payment method. We apologize for any inconvenience this may cause.

If you believe this decision is in error or have any questions, please feel free to reach out to our customer support team. We are here to assist you.

Again, we apologize for any inconvenience, and we appreciate your understanding.

Best regards,

your name Customer Support Team store name customer support contact info

[erinrrr]

June 14, 2024 and we just had a"High risk of fraud allert" on an order from "wang hai, 6215 NE 92nd Dr, C/O DNF616, Portland Oregon 97253, United States". Same address and when i googled it your post came up. I chose to cancel the order and not deal with this. Question though - do i choose refund now? or is their even a payment to refund? I have not read much into "chargebacks".

[Sophia]

Hi! You can cancel and refund the order if there hasn't been a chargeback. If you have received a chargeback on this order, please review our guide on how to resolve a chargeback first. 

[Mister_E]

Same person has tried several times to order from us with the exact same details, however this past weekend they've switched to:

wang hai
131 Rosemary Rd
suite 202
Dover Delaware 19901
United States

Seems to be another logistics, shipping facility.

[the-raceplace]

We had the same experience.  First Wang Hai placed several orders to 6215 NE 92nd Dr, C/O DNF616, Portland Oregon 97253, then they switched to 131 Rosemary Rd, suite 202, Dover DE 19901.  The most recent attempt is still using the freight forwarding/consolidation company's shipping address in Dover, DE, but the name on the order is Andy Xue.

[arrakoutdoor]

Just had the same thing happen. I canceled the order. 

Andy xue

131 Rosemary Rd
suite 202
Dover DE 1990

Horrific people

---

@Mister_E wrote:

Same person has tried several times to order from us with the exact same details, however this past weekend they've switched to:

wang hai
131 Rosemary Rd
suite 202
Dover Delaware 19901
United States

Seems to be another logistics, shipping facility.

---

[dreamday]

We got back to back orders of the same product from this same address 

wang hai
131 Rosemary Rd,
suite 202
Dover DE 19901
United States

glad i looked it up and found this forum before we sent it out.