Potential fraud?

candra72
Excursionist
25 0 7
Hello,
During Black Friday, Shopify's fraud analysis flagged one of my orders as a "medium" risk, indicating I "may" receive a chargeback on this order. Following Shopify's advice, I reached out to the customer for confirmation but haven't received a reply. The second email was sent and still nothing then she unsubscribed to my newsletter. 
 
Have any of you experienced similar situations? If so, how did you handle it? 
 
Thank you so much
ckohlman
Replies 7 (7)

JoesIdeas
Shopify Expert
2131 192 565

In my experience (store owner + owner of an app that works in this area), medium risk orders have a low % chance of being fraudulent.

 

Here's a snapshot from an analysis I did while writing a guide How to Deal with Fraudulent Orders on Shopify:

Screenshot 2023-12-05 at 7.44.31 PM.png

That being said, that is suspicious that the customer is not replying to you. Most of the time legit customers reply, understanding that the internet is raging with scammers... if they don't understand, they may be one. 🙂

 

I would probably cancel the order and tell the customer the reason, invite them to reply to the other email if they are still interested. But that's just me and my frame of reference, it's 100% up to you to do what you want here. But if you don't have communications from the customer, I believe it will be hard to fight a chargeback case and win.

 

• 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
candra72
Excursionist
25 0 7

Thank you so much, you are right, not replying to both emails is a bit discouraging. I plan to cancel the order to avoid any problems. Thanks again!

RachelA
Visitor
1 0 0

Hi Joe!  You seem like you may have some insights on this:  We sell e-gift cards.  We suspect a thief bought an e-gift card with a fraudulent card, emailed it to "friend" and then used it, we sent product  -- all before the actual owner of the card had time to report a chargeback.  Any ideas of how we could avoid this happening again?  Thanks for ANY ideas!

JoesIdeas
Shopify Expert
2131 192 565

Oof what a pain.

 

Couple ideas:

 

- If the purchase of the e-gift card has a fraud analysis, you can refund that purchase, and automatically cancel if it's high risk

 

- If this is happening a lot, you can set an alert on any orders purchased with a gift card to notify your support staff, they can then analyze the order and the original gift card purchase, and even contact the customer. Not ideal because extra work to do this, but if you do it for a few you might be able to spot trends, then automate the cancelling of those orders... or at the least hold the fulfillment for X days until the reasonable time window has passed for a chargeback to get filed (I don't know what this is, just thinking of ideas I would look into if I were in that situation).

 

- Contact the FBI or whatever agency in you region is responsible for fraud, to report the crime. I don't know if you would be able to get reparations or if it would be worth the time, but if crimes like this never get reported, people will keep doing them (and on the contrary if law enforcement actually penalizes these criminals that steal from you and commit wire fraud, it would lessen the problem for everyone).

 

The article I linked earlier may help with some of the automated prevention and notification, overall I think the best strategy is to analyze and test to find a system that works for you, then execute that system into your flow... but also accepting that fraudulent losses are a normal part of business (unfortunately in our world that doesn't prioritize penalizing thieves), and keeping them to a minimum is the goal, and that perfection will likely not be achievable.

 

Also one other thing I've heard is apps that have some kind of insurance policy, where they will cover fraud orders, I don't have any exact recommendations but if you find something like that, you can analyze your losses vs the cost for the policy and see if it would be worth it.

 

Hope that helps, good luck I hope you can eliminate the fraudulent attacks against your 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

Skye
Shopify Staff
1070 96 191

Hi, @candra72

Greetings, and thanks for posting!

 

Unfortunately, we aren't able to directly advise you on how to proceed in these situations due to liability. If the customer has not responded to your multiple requests for verification you are within your right to cancel and refund the order. The fraud alert should have provided the specific information that created alert which can provide you more clarity. 

 

Keep in mind however, if you do decide to fulfill the order and it turns out to be fraudulent, you would be at risk of losing a potential chargeback.

 

I hope that helps! In the meantime, make sure to review our guide on how to avoid chargebacks.

 

 

Skye | Social Care @ Shopify
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candra72
Excursionist
25 0 7

Thank you 🙂 I am still learning my way around Shopify since I am fairly new to the platform.

Correct me if I am wrong,  I plan to cancel, but I understand my Shopify fee is not refundable if I cancel, is there any way around this ?

 

Thanks!

Buntiform
Tourist
27 0 3

Think of it from the customer’s perspective, you place an order on an online store and you expect no complications but then out of the blue, you get an email asking you to go out of your way to confirm your identity just so you can pay money to a seller to buy a product. They probably viewed it as not being worth it and thus, did not respond. Not saying this is exactly what happened but it’s likely to be one of the scenarios. As a seller, you’re in a tough spot as well since whatever anti-fraud tool you’re using is flagging an order and you can’t just ignore it because you’re probably a smaller seller who needs every sale they can get and you can’t go ahead with the transaction as that could very well be financial stupidity. As someone else mentioned, medium-risk orders (or those classified as such by Shopify’s in-built anti-fraud tool) can be legit too. IPQS tends to provide a more accurate depiction of fraud scores.