Why are we losing all chargeback disputes even with good customer service?

[Bont]

Lately, we seem to be losing every chargeback and it seems very unfair. These are real customers and they don't seem to be setting out to commit fraud, they just seem lazy or people who become agitated easily. Yesterday I lost a case where a customer ordered the wrong size item, they contacted us and explained the issue. We said no problem and sent them a return mail label. They were not happy with that reply so they opened a chargeback. We explained to the bank that we shipped what the customer ordered and did all we could to make them happy. The bank sided with the customer and refunded their money and we do not have the product and lost the shipping fee and other fees as well. This is one example of similar weekly occurrences. 

[bobbymackinnon]

The banks do a good job asking for proof to discourage fraud and spend a ton doing so. But, the customer in this case is their concern. As long as the claim seems legitimate and doesn't raise any major red flags, the bank will process. You are correct that Shopify doesn't do a great job communicating to the card company. But the issue still stands that the opportunity exists for a fraudster to attempt an exploit.

I would challenge your claim that we are not solving problems. If you have less of these orders then you have less claims. You cited your methodology of not allowing orders over $150 for new customers and only shipping to billing addresses. Those are all ways of preventing the issue from occurring. But I would consider those solutions akin to a blunt instrument. CAC is extremely high, and repurchase rates across D2C products is very low compared to major retailers. So if you think you need to get a lot of juice out of the squeeze then you run the risk of excluding legitimate customers that might be ordering a product for a party, or some other event where it's very normal to order a lot at once. All stores are also different and some sell items that are $600-$800 per item where a person can order two and still be very much in the range of normal, while exposing the merchant to a huge chargeback risk. This cornucopia of issues is why we developed the product to scan addresses based on a plethora of data points to identify risky orders and stop them before they can turn into a chargeback claim.That said, we are in the business of problem solving.

As I said in my previous post, we built this app because we were struggling w/ the same issue on our stores. So far, it's been very helpful to us, and I wanted to share that. But if you think there are other features and products we should build, I would love to have a conversation with you. Your knowledge of this topic is in the top 1% and it would be great to see if we can build something that solves your problems as well

[Pripri]

I do not agree with you. Because when we called ourselves the credit card companies, they said, they never got the responses we gave to shopify against the customers.

For example, you ship an item 300$, tracking shows as delivered, then the customer says I love it and asks if you have other colors, you say yes. THEN, the customer asks for a chargeback saying she never received..... ?? you have the exchanges about the item she received and loved, the tracking that shows delivered and sigbed. Who wins in this case ? US, but no, because when we sent the proofs to shopify (the answer is in their system, from what I get, the credit card does not get this answer and at this point, they think you accepted the chargeback. But we now call the credit card company as well and mess up their credit real good

And not true, I hasked for chargebacks twice in my life and a lot of questionning and back and forth between the seller and I to the credit card company

[Pripri]

p.s, sorry about typing mistakes, it corrects after I write :0

I asked not hasked + others. 

[Vice1]

It is very bad, Makes it extremely hard on small businesses! You can literally show them the best evidence in the world with all the documents and pics. They will side with them. A customer said they didn't receive their order UPS took a picture of it on their porch with house # in pic and I submitted a Google maps pic of the house matching Ups pic. They sided with them. Small businesses take it in the chin 95% of the time, pretty sad.

[bn2019]

We've had a chargeback that was made in error by the customer and we still lost it. We've had a chargeback made by the customer's bank in error and we still lost it (however we later received compensation from them in lieu of an explanation). We've also had a chargeback from a customer who probably decided they didn't like their credit card statement. In every case we had confirmation emails or replies from them, proof of delivery etc. The card issuers do not care if you lose the product/service you sold along with the payment and chargeback fee, and they are not accountable.

[Cape-Designs]

Call the credit card company and report that transaction was fraudulent from your account.. give the message clear, Don't **bleep** with me! 

[GoldHan]

You're absolutely right — this kind of situation is a business killer, and it's unacceptable that we’re left vulnerable under policies that clearly favor the customer, even when we do everything by the book. We shouldn't stay silent about it. This isn't just frustrating — it's a pattern of exploitation driven by greed.

Chargebacks were intended to prevent fraud, not to punish honest sellers for customers’ indecisiveness or mood swings. When banks side with customers without holding them accountable — and still collect a fee from us — it’s clear who they’re really protecting. These aren't neutral systems; they profit from these decisions.

We are legitimate businesses, not disposable service providers or easy targets. We need to start protesting these policies and calling for change — legal action, collective voices, petitions, whatever it takes. This system needs to be challenged. If we don’t push back, we’ll keep bleeding money and dignity under a broken system that treats small businesses like collateral damage.

[aito102]

It is more like shopify never reply to the bank, because a customer did try and work with us, and the bank said that shopify never provided that we obviously sent it to shopify. Which make sense because some charged back we lost in the past we had made everything right, it was obvious the customer was a scammer however he still got his charge back.

[bn2019]

I commented elsewhere on this thread, but Shopify is sending the info, and the bank either doesn't match it to you or doesn't care.

[Pripri]

Well, was told differently by credit card companies whom we had problems with chargebacks and they said they never received any info from  shopify. They asked the date and last 4 digits of the credit card and would have this customer on a black list in their file. This is what WE experienced

Plus, when contacting shopify 3 times on the subject, they never gave me an answer about this. They answered random stuff no connections. Playing with me. So your analysis comes from ??

[aito102]

I dont know for you, but for us the customer worked with us, and the bank even told the customer they did not received any reply from our party. You can do a real test by yourself, and check the whole process.

[bn2019]

Since I'm in the middle of a complaint about a chargeback, I'm going to ask for evidence from Shopify and the bank to see exactly what was passed on and assessed.

[Pripri]

 I asked them before and never got the proof, not even the message saying they had passed my info. Twice I was chatting with someone who started sending me these prepared messages with NO connections and they ignore my question each time

[aito102]

• I doubt you will get any relevant reply. The only way we were able to confirm. We worked with a trusted customer, she place an order, and purposely raise a charge back with her bank. we provided solid evidence to shopify with the customer even agreeing she made a mistake, guess what she still won. The bank later told her they never received any reply, which we did with shopify.

[bn2019]

I think a lot of us should do this, and follow exactly the process that Shopify advises in their help pages, eg a withdrawal letter from the customer is included in your appeal. That's how you find our who is not following the rules, which gives you evidence to lobby government, because changing regulations are the only way to fix it.

[Pripri]

If you have some ideas, am opened to try as well

[bn2019]

I've commented on this subject before, but I think I can provide some clarity on what's happening with bank decision making processes in these situations. We've had 3 chargebacks that we lost, and all of them were genuine purchases made by customers. The cardholder name, billing address and sender's message to the recipient all matched. The customers agreed with me that they were genuine. We still lost them. One was PayPal, and two were with the Commonwealth Bank of Australia (CBA), one in 2023 and one two weeks ago - this one's ongoing. The PayPal chargeback was mistakenly lodged by the customer as they didn't recognise our business name on the statement. OK no problem, it was fixed.

The bank chargebacks were a different story. In both cases, the customers cards had been hacked, and the BANK flagged all transactions over a period as fraudulent. I knew the bank was CBA so I was able to do something. In a lot of cases you won't find out who the card issuer is. As I wrote above, we lost the chargebacks. So I complained directly to CBA. They did an internal investigation (chuckle) and found in favour of themselves. So I lodged a complaint with the Australian Financial Complaints Authority (AFCA), and after a lot of me asking a LOT of questions about their processes and earlier decision, the CBA agreed to pay $250 for me to go away without a reason. The chargeback fee was $25 and the customer repaid the original transaction amount. 

Exactly the same thing is happening with the current chargeback. The customer repaid the original amount, I complained to CBA without an adequate response and I've lodged a complaint with AFCA, referencing my 2023 complaint. So it seems that banks find in favour of their customers, as they looking for the path of least resistance. Why antagonise your customer when you can take money from some anonymous merchant?

Regardless of the outcome, I'm going to lobby some politicians to see if I can move them to do something, as it's our money, not theirs.

[GoldHan]

Chargebacks are seriously hurting small businesses like mine. It’s getting to the point where it doesn’t feel safe to sell online anymore, especially when we’re not protected. I recently had a chargeback where the customer clearly took advantage of two separate orders — and the evidence I submitted made that obvious. Still, the case was ruled against me.

We already pay processing fees, and then when hit with a chargeback, we get charged again all while losing the product and the shipping costs. It honestly feels like no one is reviewing these cases properly. Something has to change. Platforms like Shopify need to start protecting the businesses that keep their ecosystem running. We have to do something about it. I feel like I want to switch from Shopify since I'll always feel worried about every sale I make. 

[fraudfighter12]

Hi, can I ask what tools you are using to help address this before the order is placed? Are you using NoFraud, the Shopify Fraud filter, etc? I have an app called Deliverlitics. I'd be happy to evaluate your data for you (for free) to see if we would have identified these risky orders upfront before they are placed. 

[Pripri]

How does it work please ?

My chargeback was from a customer that bought few times and suddenly increased from one item to two items. No biggie, but she said they were too small, and was rushing us to reship, leaving on a trip she said. She gave me the return ups tracking which was ok and we reshipped before getting the returns. Few days later , still had not received and label was made but she never shipped. And she asked a chargeback !! And won. 4 gowns in hand, we had the emails to prove all but still. We called Amex and they said Shopify never sent our side of story. Was amex lying ?? In any case, they were going to go after her and she refunded us. And she still wanted to purchase and i said no. So, how does your app detects this ? And please not something where people ask their id. This lady was a doctor, easy to locate, but the credit cards are the best place to mess up their credits whith these crooks i find. People will have to fix a transaction in their lifetime and if you have bad credit, will not work when you need it for real

[bn2019]

Fraud detection doesn't work in arrears, or when the bank erroneously decides the transaction was fraudulent. That's what has happened to us each time. We have over 60,000 transactions on Shopify, with four chargebacks, each one more aggravating than the last, as we didn't send out orders on fraudulent purchases.

[fraudfighter12]

We built a tool to help merchants prevent delivery-related chargebacks before they happen, not just flag orders after the damage is done. Our platform analyzes merchant-side data across the Shopify network for things like past return abuse, reship requests, suspicious address behavior, even customer service interactions — to detect patterns that lead to scams, friendly fraud or refund abuse.

Then we automatically take action based on risk level — whether that’s flagging the order, requiring signature delivery, or canceling it before fulfillment. We’re not another generic fraud tool. We’re purpose-built to stop scams and chargeback-prone behavior at the delivery level — where most fraud slips through.

Would you be open to a free chargeback audit? We can show you how our platform would’ve handled your past cases (no integration needed to start).

Thanks for sharing your experience — it highlights exactly why this solution is needed.

[Pripri]

No, that would noy make a difference. All the apps you guys offer have no connections with the real problems

Let's say, a customer that ordered 5 times and expensive stuff. We know who she is, owns a large company, etc. But one day, she wants to exchange for another size and her email fell into spams for 3 days only. But she was furious after the 2nd day, no answers and asked a chargeback. We used to check spams once a week, but now, every day.

How would your app have detected this ???

[Pripri]

In the meantime, besides researching your customers (I check every one if them), you can be slow to ship. We never ship before 3 weeks, so someone who has been hacked has time to notice it. We say so on our website and I know when I get an order and they try to rush me, to void it.

Had a customer from Canada the other day ordering and shipping to a pobox in USA 🙂 and she was nasty and pretentious because I voided the order. She said in Canada  it worked this way and to hurry to rush her package. I told her, my sales agent is from the same town she is in in Canada (true)  and she would call and explain to her it does not happen there either. She disapeared

There are some signs at times, like having delivered to a warehouse, filming locations with 20 doors and the package will show as delivered but our customer will never have in hand and claim (but her friend will have it for her).

Lots of stuff to check for as well and these are not chargebacks