How can I handle chargeback fraud after a partial refund?

Shopify Discussion
1

We have a customer purchased Two items (as product A = $500, & product B = $400) under One PO and paid via his credit card thru Shopify payment method, and then he e-mailed us that he would like to cancel the product A and only need the product B, so we did the partial refund $500 amount for the product A from the original order page on Shopify, and shipped the product B.

3 weeks later, the customer told us that the product B is defective and would like to process the return/refund, so we provided the pre-paid return shipping label to customer for sending back the product.

When we received the product B returned, we found out the customer filed the charge back on this order transaction for total $900 on the same day we received the returned item, so we’re not able to issue this $400 refund to customer thru Shopify order page once the charge back process started.

We e-mailed to customer, and asked him to cancel the chargeback, then we can process his $400 refund, but no answer, no reply, and even no phone call pick up.

We submitted all the information and timeline document, to shown that we already processed the $500 partial refund to customer 3 weeks ago, and the refund transaction already done, the $500 has been taken from our Shopify payout.

But end up that the bank gave the customer favor, with $900 total refund from the charge back, but it should only $400, not $900!

We lost $900 + $500 from this transaction, contacted to Shopify customer service but they told us there is nothing they can do…

The buyer’s bank is helping this customer doing the fraud…

2

Hi @Kevin_Wood99

First of all, really sorry to hear about the chargeback.

2nd, are you absolutely sure that 900+500 = $1400 was actually taken from your bank account? As far as I know, banks can’t and should not refund more than the total order amount made.

I would recommend you speak to someone higher up with Shopify payments or Stripe again and to see if they would escalate your case and do an investigation. Explain that the $500 was already originally refunded back to the customer. You should not have to refund more than the original amount plus fees. The bad-actor is essentially making $500.

3

It’s likely that the customer has a long history of doing similar things. In the future, try and use a service like IPQS to detect high-risk transactions and avoid them as such.

4

This happened to us too, we lost $200 on top of the full order amount, Shopify also said there is nothing they could do, very bs,

5

I urge you to compile your evidence and call your state police. Theft is illegal and is beyond the authority of any business, the state will handle it. Hopefully the statute of limitations has not expired yet. With it only being 2 years you should still probably be able to file criminal charges against the customer. Another thing you could have done at the time, if this is in your policies, is to rebill the customer, and send them to collections or file liens on their property if they don’t pay. With the amount being over $1000, it may be a felony.