High-risk fraud flags on online orders leading to chargebacks despite delivery proof. A New Zealand store reports losing ~NZD $1,000 after a flagged order was fulfilled and later disputed; provided emails, courier photos, signatures, and proof of delivery, but funds were returned to the cardholder.
Process clarification: Chargebacks (bank-initiated reversals after a cardholder dispute) are decided by the customer’s bank. Shopify cannot influence outcomes; it only notifies merchants and provides a portal to submit evidence. A Shopify guide on chargebacks is shared.
Practices advised:
Do not fulfill orders flagged as high risk by Shopify or third-party tools (e.g., IPQualityScore).
Avoid future transactions with customers who have charged back.
Submit evidence via Shopify’s portal while understanding banks often side with cardholders.
Recent update/outcome: The store now cancels all high-risk orders. They note some false positives (e.g., company cards used from different locations), but estimate ~90% of high-risk flags are accurate in their experience.
Status: No resolution beyond risk avoidance; consensus trends toward not fulfilling high-risk orders.
We’re a New Zealand based store on supplying product to New Zealand.
Recently we’ve had a few customer orders be flagged as high risk of fraud.
The first time it happened, we called and emailed the customer, and had the physical goods supplied. Shortly after receiving the order, the customer submitted chargebacks and didn’t respond to further Comms from us.
I supplied the email transactions etc and proof of delivery, photos and signatures from the courier company to Shopify, but Shopify still “sided with the customer” and gave returned their money to the credit card leaving us nearly $1000 out of pocket.
We’ve since had a few more orders like this, but I’m now inclined to not fulfil any order with a flag moving forwards as I don’t trust Shopify to do the right thing and protect us as store owners.
How are other dealing with this issue? Do you have any advice or practices you can share to avoid it or protect yourself to make sure that Shopify side with the store owner?
I’ve no idea what more I could have provided to prove the goods were supplied and the customer wanted them.
Chargebacks are an unfortunate byproduct of doing business. And because of consumer protections, more often than not a credit card company is going to typically side with their client in place of the business. Chargeback processes are completely handled by the customers bank and Shopify doesn’t have the ability to sway the decision in any way. We simply provide the platform for you to get notified of chargebacks and offer a portal where you can submit uploaded documents as evidence for the banks to review and make their decision.
At this point, it would be best to not do any business with that customer in the future. In addition, we do have a handy guide here regarding Chargebacks and everything you need to know about the process. If there is anything else I can help you with, please let me know.
The right thing to do when an order gets flagged as high-risk (be it by Shopify’s built in anti-fraud or by 3rd party anti-fraud plugins like IPQualityScore) is to avoid it. I mean, it’s getting flagged as high-risk for a reason and ofc, the customer’s going to pretend to be legit when you phone them up.
Thanks for your response to this almost year old post.
While there are lot of legitimate orders that get flagged as a fraud risk, for example, people using company credit cards from different locations, however, 90% of the time you are correct, we no longer fulfil any order with a high risk flag.
As stated by the Shopify staff member above, there is no protection from Shopify and the banks dgaf. They will always charge back to you when requested as its easiest for them and there’s nothing you can do.