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Seeking Advice to Safeguard Against Chargebacks - Need Your Insights!

agil688
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Title: Seeking Advice to Safeguard Against Chargebacks - Need Your Insights!

Hey fellow Shopify community members,

I hope you're all doing well! I'm reaching out today to seek your valuable insights and experiences regarding chargebacks. Recently, I encountered a situation where American Express sided with a client on a chargeback, causing a significant financial setback for my business. The cardholder claimed that he never authorized the transaction.

I run an online store on the Shopify platform, and while we take all necessary security measures during transactions, this incident has made me realize the importance of being proactive in preventing chargebacks.

I would greatly appreciate any advice, tips, or best practices you can share to safeguard against chargebacks in the future. Specifically, I'm curious about:

1. Steps to ensure secure and legitimate transactions.
2. Strategies to minimize the risk of chargebacks while still providing excellent customer service.
3. How to handle chargeback disputes effectively, especially when supporting evidence is strong.

If any of you have dealt with similar situations or have successfully implemented preventive measures, your guidance would be incredibly helpful. I believe that collective knowledge and experience can help all of us create a safer and more reliable shopping environment for our customers.

Thank you in advance for your time and support. Let's work together to build stronger businesses and foster a thriving Shopify community!

Best regards,
Below is my response to AMEX:

"Dear American Express Dispute Department, Subject: Chargeback Case for Orders LS121256AZ, LS121257AZ, and LS121261AZ We are writing in response to the disputed charges made by Mr. Andrew Winston on our Shopify online store. We would like to present our argument and provide supporting evidence that demonstrates the validity of these transactions. First and foremost, it's crucial to note that all three transactions were carried out securely and with complete adherence to the standard security measures in place on our platform. The orders were placed using correct and verified billing information, including Mr. Winston's credit card details and billing address. This information was not, in any manner, coerced or acquired unlawfully but was entered at the time of purchase, which indicates an intentional and conscious transaction. Secondly, upon receiving these orders, we processed and shipped the purchased items — Huddly IQ Cameras with Microphones — with due diligence. The items were sent to the delivery address provided during the transaction, which was different from the billing address. Delivery receipts confirm successful delivery of the products, implying that the goods were received at the location provided by the individual making the purchase. Moreover, no immediate communication or dispute was brought up by Mr. Winston after the transactions. The standard protocol for any unauthorized transactions is to report them immediately, yet we received the complaint weeks after the order placement and successful delivery. This delay brings up questions about the nature of these disputes. As we understand it, the responsibility of alerting customers about potentially fraudulent transactions rests on the credit card company. This case implies that either these transactions were not flagged as suspicious, or any alert was overlooked by the customer. In conclusion, we firmly believe these transactions to be legitimate based on the evidence presented. We complied with our sales process, and the goods were successfully delivered to the provided address. It's concerning that we're now facing a significant financial setback due to a situation that seems out of our control. We kindly request your thorough and careful examination of this case. We believe that the evidence supports our claim that these transactions were not fraudulent and hope for a fair resolution to these chargeback disputes. Thank you for your time and attention."


Agil

Reply 1 (1)
JoesIdeas
Shopify Expert
2039 184 538

Really good message there that you submitted, this unfortunately confirms that no matter how solid the evidence is, they almost always side with the customer.

 

I ran a store for 7 years, eventually we evolved to this strategy:

- Investigate medium risk orders and confirm the details with the customer before fulfilling the items

- Cancel high risk orders and require a new order with new form of payment

- If engaging with a customer of a risky order, include in the email a quick text agreement that they will not file a chargeback

 

If the order was not risky, and was a fully legitimate transaction, then I'm afraid there's really nothing you can do, because it is a 100% legit order, the customer just decided to scam you, which is allowed by the credit card company.

 

I wrote a guide on handling risky orders here: https://orderautomator.com/fraud-guide. It also includes a plea to Shopify to use their power to help the community with better solutions (help lobby for laws or fair compliance from credit card companies, etc).

 

Hope that helps, but ya if it was a legit order then the only other idea I can think of is that if an order is > $X, contact the customer with a written agreement that the order is legit, they acknowledge the terms, and will not process a chargeback. If you explain your business has been scammed in the past, and this is just a precaution, I think they will understand, especially if you say that scams can force you to raise prices to absorb them, and worst case scenario lose the business.

• Creator of Order Automator (automate tagging, fulfillment, Amazon, notifications + more)
• Shopify developer for 10+ years, store owner for 7 years
• I also make guides like Shopify Automation Tips and How to Deal with Fraud / Chargebacks