Why are we losing all chargeback disputes even with good customer service?

Shopify Discussion

Topic summary

Shopify merchants are experiencing systematic losses in chargeback disputes, even when providing what they believe is compelling evidence. The frustration centers on several key issues:

Common scenarios leading to lost chargebacks:

  • Customers ordering wrong sizes, refusing return processes, then filing chargebacks
  • Customers receiving refunds but still winning chargebacks for the full amount
  • Legitimate purchases flagged as fraudulent by banks after card hacking incidents

Core complaint about Shopify’s system:
Multiple merchants report that credit card companies claim they never receive the evidence/responses submitted through Shopify’s chargeback system. When merchants contact banks directly, they’re told no information was transmitted, suggesting a potential technical failure in how Shopify communicates with card issuers.

Financial impact:
Merchants lose the product, original payment, already-issued refunds, and chargeback fees (typically $15-25). One example: $800 chargeback on an order already refunded $650, resulting in potential $1,465 total loss.

Merchant strategies emerging:

  • Contacting card issuers directly with transaction details
  • Filing complaints with financial regulatory authorities (like Australia’s AFCA)
  • Delaying shipments 3+ weeks to allow hacked cardholders time to notice fraudulent charges
  • Carefully screening orders for red flags

Status: Ongoing frustration with no clear resolution. Merchants feel banks automatically favor cardholders regardless of evidence quality.

Summarized with AI on October 25. AI used: claude-sonnet-4-5-20250929.
43

Are we a retailer or are we investigators? Why do we have to do all this work since the bank or shopify can’t. We sell products and that’s what we are good at. Now we have to be criminal detectives on each account to ensure we are ok. Why?

class action lawsuit