Hi Niza,
Thank you for sharing your recent experience with the chargeback process here in the community forums. Chargebacks are never a fun experience for merchants, regardless of the outcome. I know you feel that this chargeback was unfair and that the resolution provided by the customer’s bank is not one you agree with. I’d like to share a bit of information about chargebacks with you to help you with this process if you ever receive one again in the future.
Chargebacks are an unfortunate side effect of accepting credit cards as a form of payment. Customers have the ability to open a chargeback on any credit card charge that is less than 90 days old. When this happens, the customer’s bank will immediately deduct the amount they paid from the merchant account and hold it while they review the chargeback case. This process is entirely out of Shopify’s hands, we are not able to stop the withdrawal or control it in any way. Our system is setup that when the chargeback process is created for the order that a feedback option becomes available within the order details. This is a place for you to provide your own evidence to the contrary that the product was received, in good condition, and that you attempted to contact the customer to resolve the chargeback issue.
You have a set period of time to fill in your evidence before it is submitted to the bank for a review. This review is not done by Shopify, it is done by the customer’s bank/credit card processor and Shopify has no say at all in the review. The bank will then come to a final decision and choose to refund the customer or return the funds to the merchant account.
You can find out more information on this process in our Help Center: Chargebacks and inquiries
When a customer places an order on your store, there is a built in fraud alert for the order that can be reviewed on the right hand side of the order details screen. While this system isn’t fool-proof, it is very reliable that if it says the order is a risk at all that there will be a chargeback. This tool uses a wide range of services on the backend to come to this decision, so even if it just shows the IP address as out of place but still a high risk of fraud, it’s best to go with it and refund the order to the customer.
If you find that your store is being targeted or at a high risk of receiving chargebacks in the future I would recommend reviewing the available third party services that are out there to either insure your orders against a chargeback or prevent high risk customers from placing orders. You can review the apps available in our app store HERE.
I hope this information helps you and your business in the future.