Hi @StevetUK
I am sorry to hear you are having these kinds of issues with some of your customers. As previously mentioned, the Shopify Fraud Filter app would be a great place to start. You are correct that using a fraud filtering app does not recover any transaction fees incurred by accepting payment and then refunding it back to the customer. This is because the Fraud Filter app is designed to block the customer from checking out, so no payment is processed at all.
I would take a look at the available fraud protection and customer filter apps that are available in the app store and also look at enabling manual payment capture for the checkout until this issue is resolved. Manual payment capture will authorize the customer’s payment method but does not process payment until approved by the merchant. This means you can review orders, cancel the necessary ones (avoiding those transaction fees), and capture payment for the remaining ones you plan on fulfilling.
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If you are able to successfully block the customer using a fraud filter app, then you don’t have to worry about the transaction fees for their orders.