CHARGEBACK | Scammed twice: first by a client, now by my very own business partner Shopify

Shopify Discussion

Topic summary

A merchant received a chargeback notification for $1,490 AUD with a deadline of July 29 to submit evidence. Despite this timeline, Shopify debited the full dispute amount after just one day, not only the standard $25 dispute fee.

Key Issues:

  • Shopify’s actions contradict their own FAQ and admin page procedures, which state the full amount should only be debited if the dispute is resolved in the customer’s favor
  • Support provided three conflicting explanations, ultimately claiming “the bank took the money” and refusing to reverse the debit
  • The merchant views this as Shopify holding their cash flow during the investigation period

Merchant’s Concerns:

  • This practice could enable bad actors to harm businesses through mass chargebacks, tying up cash flow for extended periods
  • Shopify appears to prioritize relationships with banks and credit card issuers over merchant rights
  • The poster questions whether this is an error or intentional policy that violates Shopify’s own terms

Current Status: The dispute remains unresolved. The merchant is sharing their experience to expose what they see as inconsistent policies and unhelpful customer service, not seeking advice.

Summarized with AI on November 8. AI used: claude-sonnet-4-5-20250929.
1

Hey community,

I’m posting here to highlight that Shopify isn’t following their own procedures regarding chargebacks and is confusing the debiting of the full fee amount ($25 in Australia) with the full dispute amount. Yesterday, I received a chargeback notification for a client ($1,490) with a message stating that I had until 29/07 to collect evidence and submit it, otherwise the full amount would be debited. However, after just one day, Shopify has already debited the full amount and transferred it to their savings account, using our cash flow to generate interest while the enquiry is ongoing.

This contradicts all the processes detailed on their FAQ page, where it’s not mentioned anywhere that they will debit the full amount—this should only occur if the enquiry results in favor of the client. After contacting support, it seems they made a mistake but tried to defend it by providing three different answers in the same conversation. Essentially, they know they’re wrong but refuse to correct it. Towards the end of the conversation, they simply stated that the bank took the money (which contradicts everything previously stated in the FAQ and on the admin page), basically their way of saying “sorry, we can’t do anything now, we don’t have the money anymore”. Ridiculous.

The only amount that should be taken is the dispute fee of $25, but it seems that Shopify included the dispute amount as well. Error or intentional confusion? I understand they might have temporary shop policies that scam people and then disappear, giving Shopify reason to take the money immediately. However, what they are doing is illegal as it goes against their own terms and conditions and likely some business laws. If nobody exposes this, it means they can continue doing it, but it also means that a group of clients with bad intentions can harm a business by initiating mass chargebacks, tying up the company’s cash flow for at least a month. It’s disappointing to see Shopify prioritize their relationship with banks and credit card issuers over their own customers’ rights.

Everything on the admin and FAQ pages indicates that the full amount will be charged by the bank (through Shopify) at the end of the enquiry. However, Shopify takes the money immediately, claiming it’s a precautionary measure. This doesn’t make sense since they could take the money today or in a month.

I’m not seeking answers, just leaving this message here to highlight these issues on Google and expose Shopify’s disregard for their own processes, FAQ, admin messages, and their unhelpful customer service that clearly doesn’t understand what they’re talking about.

We wish we could open a chargeback against Shopify for fraudulent transactions.

Conversation non-sense with CS and proof from process from Official FAQ: