Why is the chargeback process so frustrating and lacking transparency?

Payments + Shipping & Fulfilment

Topic summary

Merchants are expressing widespread frustration with Shopify’s chargeback process, reporting consistent losses despite providing compelling evidence including delivery confirmations, tracking information, signed receipts, customer communications, and even photos of products in use or being delivered.

Core Issues Raised:

  • Banks consistently side with customers regardless of merchant evidence submitted
  • Shopify refuses to provide bank contact details, preventing direct merchant communication
  • No transparency about what evidence actually reaches the bank or how decisions are made
  • Significant delays in submitting responses (merchants report Shopify waiting until deadline despite early submission)
  • Limited interface for uploading evidence (single photo, no formatting retention)
  • Merchants losing thousands of dollars to what they describe as “online theft”

Merchant Concerns:

  • Suspicion that evidence isn’t properly forwarded to banks or card issuers (Visa/Mastercard)
  • Banks have conflict of interest favoring their own customers
  • Shop Pay protection claims appear ineffective
  • Some merchants report 100% loss rate on chargebacks
  • $15 chargeback fees plus lost merchandise and transaction fees

Actions Being Taken:

  • EU-based merchants filing formal complaints alleging non-compliance with EU regulations
  • Some pursuing legal action or small claims court
  • Attempts to contact banks directly (mostly unsuccessful)
  • Merchants considering class action

Shopify’s official response maintains they are merely intermediaries with no influence over bank decisions, directing merchants to help documentation—a response merchants find inadequate and dismissive of systemic problems.

Summarized with AI on October 27. AI used: claude-sonnet-4-5-20250929.
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Couldn’t agree with you more Theanton. If the bank have truly investigated these chargebacks then why are we not provided with some communication from the bank explaining the grounds considered and reasons behind the decision. Of course we know the answer is because there IS no proper process or investigation. The whole thing is clearly a smokescreen to avoid the banks having to recover money from the guilty parties. Much easier and less costly for them to hide behind this Shopify facade and penalise the innocent merchants. They dont even need to explain their decision…how good is that!

I see the normal Shopify diatribe from Rick below which of course fails to address the fundamental issues you have raised.

Also see below a response I sent today in relation to my own chargeback situation.

I have finally received notification that the banks decision is to side with the customer, which apparently means I have lost this chargeback dispute. I am the innocent party here who has been scammed by an online thief and yet the only feedback I get is “The customer’s bank sided with them”. No explanation as to the basis for this decision or the grounds under which it was arrived at. No engagement or discussion whatsoever. If Shopify are going to facilitate payment for an order and then take it away from me after the goods have been shipped then surely you have an obligation to at least provide some clarity and visibility around the process and decision making. On one hand you say “Chargebacks are handled and decided upon 100% by the bank processing the payment, never by Shopify” and yet you do not provide any opportunity for the merchant to engage with the bank concerned or receive a reasonable explanation for the decision. The entire process lacks any due diligance, fairness or visibility and is a total disgrace to this industry. If challenged in court I do not believe it would stand up!

Please can you provide contact details of the bank concerned so that I can take up this decision directly with them.

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