A merchant lost a £1,747.25 chargeback dispute despite providing comprehensive evidence: 3D Secure authentication, proof of delivery with customer signature, passport identification, and UPS tracking to the verified checkout address. The customer’s bank sided with the cardholder, and Shopify stated they cannot intervene as an intermediary, refusing to disclose the bank’s identity while suggesting the merchant contact them directly or their legal team.
Key Issues Raised:
Multiple merchants report similar experiences losing chargebacks despite 3D Secure protection
Confusion over liability: 3D Secure authentication should shift fraud liability from merchant to issuing bank
Shopify Payments (using Stripe backend) allegedly not honoring standard industry liability shift protocols
Merchants receive delayed fraud notifications (8 days in one case), preventing order cancellation
Merchant Responses:
Original poster considering legal action and switching to WorldPay
Others expressing interest in class action lawsuit
Some merchants avoiding Shopify Payments entirely, using third-party gateways like E-Way with explicit 3D Secure liability protection
Warnings that this remains an ongoing issue from 2020 to present
Status: Unresolved. Discussion highlights systemic concerns about merchant protection and contradicts standard payment industry practices where authenticated 3D Secure transactions transfer fraud liability to banks.
Summarized with AI on October 24.
AI used: claude-sonnet-4-5-20250929.
We recently received a chargeback for £1,747.25 for an order that was 3D Secure, and signed for (with proof) by the customer.
We shipped the item to the address the customer checked out with.
We also provided proof of customer identification (their passport) and we provided proof of shipping (UPS Label & Tracking) as well as the customers signature.
But we somehow lost the dispute "The customer’s bank reviewed the chargeback response and has sided with them."
Shopify told me there is nothing they can do about it and we need to take it up directly with the bank. They then proceed to tell me they are unable to tell me who the customers bank is! So how exactly am i supposed to take it up with the bank? They are now advising nothing can be done at all, and we are welcome to contact their legal team.
We are considering legal action against Shopify now.
Have you had any luck with this ? This is also a major concern for me as a merchant looking to sell high value items on Shopify. With PayPal there is obviously seller protection which comes at a higher cost as a gateway, but with Shopify it seems they don’t want to protect merchants at all. I would have thought 3D secure would eradicate problems like this/shift the liability so that the merchant isn’t paying the price for the fraud.
No luck, stay away from Shopify Payments they use Stripe as the backend for their processing who are completely useless when it comes to things like this.
I’m moving all my payment processing business to WorldPay.
I’m sorry to hear about your bad experience with Shopify pay. As Shopify has mentioned there is really nothing they can do with the chargeback because they are just the intermediary between the customer and the bank. Unfortunately, your legal action against Shopify would hold little no value since it’s already written in the terms of service to protect Shopify’s legal end.
The sad truth is that most banks are the real culprit here and they will give little to no reason at all on their decision process and will most likely side with the customer’s end. Merchants mostly lose out here despite the evidence of proof of customer identity.
Your best bet is to file a complaint against the bank or payment process with the better business bureau or the FCC and contact Stipe to see if you can escalate your claim. They will have to respond to you if you file a complaint.
I hope this helps you a bit to get your money back.
“Unfortunately, your legal action against Shopify would hold little no value since it’s already written in the terms of service to protect Shopify’s legal end.”
Oh you think so? Does Shopify’s corporate counsel agree with your assessment if two or more clients file a complaint with a U.S. Attorney and initiate a class action suit?
Allow me to please help you with this arrogance… the class might actually lose but Shopify would PAY BIG… corporations don’t get protection from gross negligence just because of their contract.
Thats really an interesting problem. I really like Shopify but this makes me a little nervous…
We had a different PSP and credit card acquirer in the past. We had 2 contracts, knew who is responsible for what and had their contacts in case of fraud.
Now we are using Shopify Payments and they fulfill both parts at once. So we have only one contract, and therefore I would expect that Shopify Payments is my credit card acquirer…?
I have neither a direct contract with Visa or Mastercard nor with an acquirer like PayOne.
“We and Shopify” are the only legal entities in the contract at Shopify Payments (or do I get this wrong?)
That being said… what’s the strategy of Shopify to help their merchants?
The 3D-Secure procedure reverses the burden of proof … The buyer has to prove that he has not entered the 3D-Secure code.
I know this thread is old, but I would strongly advise against moving TO Worldpay. Nightmare support, and nightmare customer service. We are moving AWAY from them in one of our busniess systems.
Shopify is way out of the industry norm on this. I had someone order a book and it was delivered. I have proof of delivery from the post office. Shopify has a fully automated system that they use for chargebacks and effectively they don’t get involved. As a result I lost the case and was charge their punitive $15 penalty fee. Their support in this area is comical, the support agents have no clue what they are talking about and their responses don’t make any sense and are contradictory.
I also sell through eBay, Amazon and another website run through Bigcommerce where I use paypal as my merchant processor. In all instances if you have proof of delivery you always win a dispute when the customer says they haven’t received an item. Shopify believes they are best in class with their payments platform but they are way out of synch with the rest of the industry.
This is something they need to fix and not give cute responses to on their forum or when you ask for help.
I’ve been reading these replies and now makes sense the way Shopify duck and weave like boxers avoiding answering my questions around credit card payments and the security and who is liable for fraud. They are very good at promoting Shopify Payments and how great it is, but stray the conversation away when it comes to who is liable.
It sucks that you got a charge back. This should not really have been your fault. 3D Secure is meant to add this layer where the decision is made for you. That is if it passes with a tick, then you should send the item out and have peace of mind that you will not have a charge back. It makes the decision for you.
I currently do use NAB Transact on Woocommerce. So as long as the 3D Secure portion of the transition returns certain codes, then the bank is liable if it is fraud. This module is written by a third party programmer. So far I have not had any chargebacks.
Unfortunately the developer does not have this module written for Shopify and no one at Shopify can tell me the best way forward. They just point me to an article that says, if the system detects fraud, then I should follow some guidelines like calling the buyer, emailing them and trying to evaluate the legitimacy of the transaction. That is ridiculous, because it is very subjective and very time consuming. Not all my employees would have the same decision making rules. What someone believes is high risk someone else may consider it as low risk. What a silly article!
All we are after is for a payment gateway to put their money where their mouth is and accept liability for fraudulent transactions. Much like what NAB Transact does. It is just a pity they do not have a plugin for Shopify.
So if they did use Stripe as your payment provider, it seems like they should be liable.
Built-in rules to request 3D Secure
Using 3D Secure prompts customers to complete an additional authentication step before they can complete the purchase flow. If 3D Secure authenticates a payment, the liability for any fraud-related disputes for that payment typically shift from the merchant to the issuer. This means that in most cases, the merchant won’t be responsible for fraud costs on 3D Secure authenticated payments.
I would be happy to join you in a class action law suit. I feel scammed by shopify. I provided all of the proof necessary and I still lost my case. I lost my inventory, my money and my reputation. The Shop App no longer allows me to sell on their platform due to the charge back flag i now have. This really hurts my business and now i’m scared it will happen again.
Did you have any luck with this? At the end of the day it boils back to the banks being liable if the card was enrolled in 3DS and passed the 3DS check. Sometimes we also have transactions that the card passed 3DS but customer was not given a one time password for checking. This is a call made by the bank so they are liable. As long as the card is enrolled in 3DS and you get the tick on 3DS, the bank is liable.
It is probably true that Shopify cannot do anything as they are the intermediate, but charging you a good percentage fee, they should be getting involved. Classic case ion someone wanting to take your money but throw their hands up when it is too difficult.
This is a reason I steered clear from Shopify payments. I did not get the feeling they know what they are doing (except taking your money for each transaction). We use a third party gateway provider called E-Way and use 3DS via their gateway. The 3DS stuff is done by cardinal. I simply have a rule that we check the transaction amount along with some parameters such as an ECI value being 2 or 5, then I send the product out. If I do not have either one of these ECI values and the report indicates that the card is not enrolled in 3DS, then I simply do a straight refund back. So far it is working for us.
PS: This area is quite complicated and not many people including so called expert web developers. When you first talk to people in the industry delivering ecommerce websites, they talk the talk, but when it comes to the nitty gritty stuff, they have absolutely no idea.
Sorry, to hear that, chargebacks can be hectic and you may end up losing them, even with sufficient compelling evidences. This guide can be help for owners to know what they can do next, if they lose a chargeback.
This is really worrying the posts from 2020 and this still goes on, we had the same whereby a customer purchased using 3DSecured which turned out to be a fraudulent order, however the order was never flagged by Shopify and 3DSecured was used via Amex, we use it and we know how it works, the card holder actually reported this to their bank within 1 hour of it happening but it took Shopify payments 8 days to tell us this was fraudulent and the chargeback was opened, when really it happened the same day, by then we had already shipped the product out and have lost the money and chargeback by providing all the evidence, we battled with Shopify support which we got told one thing of you can get your money back via Amex merchant services, we called them and they said it goes via Shopify payments so contact them, we did and we got ignored or a basic robot response of “the chargeback was lost so nothing more we can do” when really it should be Shopify payments liable for this and credit us the money back, Improve your systems so we get notified the same time the card processor reports it, us merchants may have a chance to actually not ship out a product or deliver a service before its too late, we are in the hands of Shopify and Shopify Payments “Stripe” as another poster had put, yet they don’t want to know or take any responsibility or liability which it should be the case when 3DSecured is used.
As I searched and checked that “No, a merchant is generally not liable for a fraud chargeback if 3D Secure successfully authenticated the transaction, as the liability is shifted to the card-issuing bank. However, this liability shift only applies when the 3D Secure process is fully completed and the transaction is approved by the issuing bank; if the merchant bypasses or fails to fully perform the verification, they may still be held liable.”
My only advice is just to double and triple check addresses, 3DSecured and email the customers prior to shipping regardless as you won’t get your money back if you are not on high alert at all times. The payment system fails the merchant and we are the ones who have to pay up every time, even an extra £10.00 fee to go into Shopify Payments pockets.
