I avoid taking risks and decline medium- and high-risk orders to prevent chargebacks.
Topic summary
Merchants are seeking strategies to prevent post-delivery chargebacks where customers receive orders but still file claims (“friendly fraud”).
Prevention strategies discussed:
- Automatically declining medium and high-risk orders flagged by fraud detection
- Requiring additional verification for large or risky purchases as a deterrent
- Using fraud prevention apps like IPQS or tools from Shopify’s recommended fraud app list
Major frustrations expressed:
- Banks consistently approve chargebacks despite merchants providing delivery confirmation, tracking, and even customer emails admitting errors
- Payment processors like PayPal reportedly side with buyers regardless of evidence
- Shopify Protect fails to honor protection when thieves claim non-delivery, even with proof of delivery
Systemic concerns raised:
- US consumer protection laws favor cardholders, with their own banks reviewing disputes rather than third parties
- Banks profit from consumer fees/interest, creating incentive to side with cardholders
- One merchant suspects chargeback management services may orchestrate attacks to create demand for their apps
- Merchants feel powerless and suggest collective legal action or requiring independent third-party chargeback review
The discussion remains unresolved, with merchants sharing workarounds but expressing deep frustration at a system they view as enabling fraud against businesses.
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