How can we prevent fake chargebacks causing significant loss?

[Robertito]

Shopify made us lose $10,000 in 10 days from 3 fake claims of fraudulent charges.

The three customers made the same fake claim. They placed an order of bunk beds, waited until they received it and the filed a claim with their bak as if it was a fraudulent order. We presented all the evidence, the PO, emails from the customer, UPS shipping info and still the money was taken away.

It's astonishing that Shopify can't do more to defend us. 

Any suggestions?

[Dirk]

Hey, @Robertito 

Chargebacks are an unfortunate byproduct of doing business. And because of consumer protections, more often than not a credit card company is going to typically side with their client in place of the business. Chargeback processes are completely handled by the customers bank and Shopify doesn't have the ability to sway the decision in any way. We simply provide the platform for you to get notified of chargebacks and offer a portal where you can submit uploaded documents as evidence for the banks to review and make their decision.

At this point, it would be best to not do any business with that customer in the future. In addition, we do have a handy guide here regarding Chargebacks and everything you need to know about the process. If there is anything else I can help you with, please let me know.

[Robertito]

At least if I get the name of the bank I can try dispute it myself!

I don't even know if this order was placed by someone else using a stolen card OR, as I believe, someone placed a legitimate order with a legitimate card and later claimed he didn't receive it.

I want to know the answer to that. I can go after the customer with a collection agency if I have that information.

[Robertito]

Hello Dirk.

I can't accept a $10K loss just like that. First I need to know if these customers made purchases with stolen cards or they used their own credit cards and then claimed that they didn't receive the product. I have the shipping address where the furniture was shipped and received. I want to hire a collection agency or have my attorney go after these people so I need all this info. If it was a sale done outside of Shopify I would have all this info and be able to go after these scammers. Please help.

[GGerrish]

Robertito, sorry to hear this. I am going through the same thing now and have found Shopify's response and customer service on this issue to be alarming and frankly very disappointing.
We recently had a customer who issued two fake chargeback claims against us from two orders placed back-to-back. I shipped both orders less than 12 hours after the orders were placed. UPS tracking verified their delivery and yet nearly a month later the customer submitted a claim saying that they didn't receive it. I called and spoke with the customer where they admitted that they had the order and laughed about it! I asked them to notify their bank and cancel the claim. Of course, they did not, and I have not been able to reach them by email, phone or text. They completely ghosted me. It should be mentioned that one of the orders placed had Shopify Protect. However, Shopify immediately walked that back claiming that since the order was "not delivered" per the customer’s claim, it was no longer covered by their fraud protection.
I asked Shopify to send me their official submission of the chargeback response that they supposedly sent to the bank. They refused to do this. Therefore, I must assume that they never actually sent anything meaningful to the bank. Shopify will also not provide any way of contacting the customer’s bank so that I might fight this myself. Customer support has just said “sorry” a dozen times and that there is nothing that they can do.

[Robertito]

Exactly, Shopify is terrible defending us from scams. If someone places an order directly with us, we will have recourses to go after if they scam us. I also called the customers and one that picked up immediately hanged up when he realized who I was.

There has to be a way of recuperating the money or at least ruin that scammers credit record. I suspect their bank must be a small bank know for facilitating these scams. In my case, I had three similar scams in less than 10 days. Maybe they exploited a loophole in the bank's policies and regulations. And as you say, most likely Shopify din't do their job at presenting the evidence to the bank. If this happens again, I will move out of Shopify.

[lovemade14]

I don’t believe Shopify submits my info to the bank. I had a similar situation where the customer arranged delivery, signed for the package and I had proof of all of it. This has happened several times. I also don’t believe they submit docs because I as a customer on my own account had an Alibaba dispute from ordering hinges. The drill holes were all over the place and did not match the picture they sent to me prior to purchase. They would not take them back.  They said I didn’t ask for the drill holes to line up. That was their rebuttal. Guess what? My bank sided with them. Lesson learned. 

As far as my own shop and the chargebacks, I have signatures, and emails to prove these charges were intentionally made by the customer, merchandise was delivered and accepted. One customer went to FedEx, showed ID to retrieve their package and went straight home to claim fraud.  

So I think Shopify sends you on this wild goose chase requesting that you get your docs ready, submitting them and nothing is forwarded. If this is my website, my company, why can’t I dispute the chargeback on my own or at the very least have contact with the customers bank?

[Ar112]

Hello Robertito

Sorry to hear you ar going through this. I am also currently experiencing the same scam. Shopify instead has made me look like the fraudster and isnt really doing much to help. They shut my store down, yet chargebacks and money keeps going out of my account. I am now getting police and lawyers involved. We should hold Shopify responsible, they firstly dont do anything to address the matter, and secondly its Shopify Payments that facilitates the money from your account to your scammers account. This is a very alarming scam, and honestly I dont know what else to do from here.