How can we verify orders to prevent fraud and dispute chargebacks?

[paceruns]

I received a few fraud risks alerts and now a chargeback. How do we verify orders to ensure they are not fraud and dispute the chargebacks?

Thank you,

[Dirk]

Hey, @paceruns 

There is no guaranteed to protect your business from 100% of potential fraudulent orders. Unfortunately, chargebacks are one of the struggles of running a business. With that said, there are some definite guidelines and even tools to help you assess potential threats. Below I've compiled some important resources that I think will be of use to you:

1. Fraud Prevention Help Doc
2. Chargeback Process & Steps 
3. What To Do When Customers Force Refunds Through Their Banks 
4. Fraud Protect Tool - For U.S Based Merchants

I hope this helps! If there is anything else I can help you with, please let me know.

[PSUSA]

Recently I received an order,  Shopify did not flag it for concern,  and I fulfilled it.   I use AutoDS to fulfill orders.  Money was received, UPS tracking shows it was delivered on 12/27.  Buyer is in Ukraine,  billing address Ukraine,  shipping address in Hanover, NJ (yes a shipping agent warehouse).  I now understand that many fraud orders are connected to that shipping address.  I'd like to know how this particular fraud could be perpetrated.  How could they initiate a chargeback if the item was received and then not returned?  The only way a return can happen is if it's returned to the vendor,  via AutoDS,  after I approve an RMA.  Where is the opportunity for fraud here?  Same customer has placed additional orders and I am hesitant to fulfill.   How do I alert Shopify that I suspect a fraudulent chargeback may be initiated?  Thanks.  

[Beacon-Jason]

Hi @paceruns 

There are a few articles and documents out there that can help you preventing fraud. I'll list a few below for your reference including official Shopify's documentation and a few I've written myself.

The general consciousness is that if you feel an order is not right or out of the ordinary from normal purchases, then it's best to contact the customer directly and ask to verify If they have made the order themselves either by phone or email. But keep in mind that fraud can still happen and that if you feel uncomfortable with processing the order, it's best to cancel it and move on.

Most payment gateways allow you to submit evidence to dispute a chargeback. You should submit all email conversations, a tracking number that shows the item has been delivered, a screenshot of your fulfillment timeline, etc... Submitting evidence does not guarantee that you will win and get your money back, unfortunately. The best fraud prevention is the stop fraud before a chargeback can happen. 

https://help.shopify.com/en/manual/payments/fraud-prevention

https://help.shopify.com/en/manual/orders/fraud-analysis

https://medium.com/@jason_80572/five-things-you-can-look-at-to-prevent-fraud-orders-from-happening-t...

https://medium.com/@jason_80572/how-to-configure-your-shopify-settings-to-better-reduce-fraud-orders...

[MartinsKalnins]

Hello,

In order to reduce the risk of chargebacks, you can always ask for customer ID or address verification, especially, for large orders. I invite you to try our app that we've recently launched https://apps.shopify.com/fraud-judge

On top of the 3months free trial we now have lifetime discounts available to the subscription plans. In return - if you like our service, we would appreciate it if you left a review on the App Store.

Here's your 25% lifetime discount code: XKAGS7

Best Regards,

Martins

[Buntiform]

You want to consider using third party anti-fraud plugins like IPQualityScore to flag the high risk orders and then you’d ideally want to avoid those.