Shopify Chargebacks Keep Going Against the Seller
18 posts across 8 communities in the last 30 days; 33% from r/shopify.
“depends on what "alternative" means for you. if the problem is stripe not supporting your country, a merchant of record (paddle, lemon squeezy, polar, dodo) fixes that because they're the seller and just pay you out. the tradeoff is the fee: roughly 4-5% + a fixed 40-50 cents…”
“It's not that big businesses don't care -- if they didn't care at all, we would have no clients! The issue is that below a certain threshold, the cost of challenging a chargeback can be greater than the potential recovery, even if you win. And when you're talking about the…”
“imo the checkout stuff is more urgent than fake accounts. start with basic velocity checks on payments, like flagging multiple attempts from the same IP or card in a short window. fake accounts are annoying but chargebacks actually cost you money”
Merchants report increasing fraud attempts, including abandoned carts from invalid cards, high-risk orders, and chargeback disputes where Shopify sides with customers. Many feel ill-equipped to handle these issues without better tools or support.
SOURCES (60)
“The oldest scam in the past 30 years, this is what we call "the cost of doing business". You'll lose at least half of those chargebacks. [re: When did credit card companies become judge and jury? Small businesses are getting crushed by chargebacks.]”
“depends on what "alternative" means for you. if the problem is stripe not supporting your country, a merchant of record (paddle, lemon squeezy, polar, dodo) fixes that because they're the seller and just pay you out. the tradeoff is the fee: roughly 4-5% + a fixed 40-50 cents per sale vs ~2.9% + 30c on stripe, but that includes the sales tax/vat handling, which is a headache on its own. two things worth checking before picking: the payout method and its cost (wire vs paypal vs payo”
“Influencer marketing trap it is. If nothing works out ill ask my client to file a chargeback. [re: NSAVE IS HOLDING MY FUNDS HOSTAGE!]”
“check out https://frauddeflect.com [re: How do businesses (big and small) protect themselves from a customer doing a CC charge back?]”
“It's not that big businesses don't care -- if they didn't care at all, we would have no clients! The issue is that below a certain threshold, the cost of challenging a chargeback can be greater than the potential recovery, even if you win. And when you're talking about the enterprise level, the sheer volume of disputes can add another layer of complexity (this is one reason some of these organizations turn to third-party providers for representment.) [re: Missing items, packages”
“If you haven’t already set up a Shopify flow to automatically refund medium and high risk orders. That will help cut down at least some potential chargebacks. Try to get your customers to close them. Fight the chargebacks. We often win chargebacks for reasons other than fraud. Customer cases are usually BS on items that have already been shipped and delivered with no contact. [re: How do yall deal with chargebacks???]”
“How do companies like vercel handle those [re: My first paying user might be a scammer]”
“Most of the time, evidence is hopeless as the customer bank is completely bias. However as others have said, I did have one instance of a customers email account just not receiving our replies for the some reason. Eventually they emailed from a different address and it was slightly better (still less effectual as they were so incredibly emotional by then). Yahoo overall is also very bad and is known to not receive or display emails. [re: Responding to customer after chargeback?]”
“yeah the fraud tracking part is what keeps me from pulling the trigger too [re: Does Your SaaS have an Affiliate Program?]”
“Yeah, this is pretty clear to me within the first few seconds. I get the basic idea as: someone is about to leave, cancel, or not convert, and instead of just losing them you give them a link where they can make an offer. The one thing that threw me off a little was the "paste your pricing page here" CTA. At first that made me think this might be more of a pricing experiment tool, while the interesting part to me is really the cancel / failed trial / lost deal use case. I’d probably ma”
“High risk will definitely be fraudulent. I have a flow that automatically cancels them, not even worth looking at them. [re: Should I fulfill this high-risk order? It feels extremely suspicious.]”
“Don't think that's quite right, you can absolutely catch a ban from a single chargeback if your volume is low enough to blow past the 1% threshold instantly. [re: Shop Chargeback Resolved But Still Banned for 6 Months]”
“Your update that they switched to the $49 product shows why removing the cheapest item wasn’t enough. We had a similar attack. Stripe was declining most attempts, but they were still reaching the processor. What stopped that in our store was rejecting matching checkouts inside Shopify before a payment was created. I’ve seen zero card-testing attempts reach Stripe since the change, over the days I’ve monitored it. I’d compare the failed attempts for repeated address details or other consistent si”
“22 fraudsters doing the "small amount, looks legit" trick and one Reddit comment doing more fraud prevention than your actual risk team”
“imo the checkout stuff is more urgent than fake accounts. start with basic velocity checks on payments, like flagging multiple attempts from the same IP or card in a short window. fake accounts are annoying but chargebacks actually cost you money”
“Received the formal rejection letter from the bank today: "We wish to clarify that transactions converted into an instalment payment plan do not carry chargeback rights. This is because the Bank had already settled the purchase amount with the merchant in full at the point the IPP is approved, and the subsequent monthly instalments represent repayments due to the Bank under the financing arrangement. Accordingly, the closure of the merchant does not give rise to a chargeback claim in respec”
“OPs query is regarding a Mastercard transaction but Visa does allow service/merch not received against merchants who are insolvent or bankrupt. But that’s not really the issue here.”
“This is probably the best advice to give anybody just starting off now because the amount of chargebacks an unexperienced person might have to battle nowadays might drive them insane lol”
“Oh I really like the preview idea! Chargebacks are always a problem for digital products.. whop has some protections”
“1.2% is above Visa's threshold so fix it fast or you'll go into a monitoring program. I'd put 3DS on all transactions, not just some. Liability shifts to the issuer on 3DS fraud claims.”
“Running a DTC store doing about £40k/month. Chargeback rate has crept up to 1.2% and Stripe has flagged us. Most of them are "item not received" where tracking clearly shows delivery, and we lose the dispute anyway more often than not. Already doing signature on delivery for anything over £100 and 3DS on checkout. Feels like we're paying a tax on fraud we can't prevent. Is there anything else people are doing, or is this just the cost of card payments now? submitted by &#”
“Radar does have this as a form of fraud detection. Feature is called Chargeback Protection Stripe assesses customer behaviour over the entire stripe merchant network, so if they play these games with other vendors, it will eventually trip them up.”
“We’ve had issues for years with a few counties, and used Blockify on 3 stores. $9.99/month and has some great features to prevent the vast majority You could also turn in manual capture of payments if you haven’t already”
“It's a topic where people get scammed for money. What's wrong with them asking others for help?”
“hard to say why. they use some algorithm that, for the orders flagged high risk, is pretty good. but the low risk is what I have gotten chargebacks on. I have an order now I am debating. Low Risk but going to Texas and the guy who ordered is in Florida. I guess I have to call him tomorrow and sus it out.”
understand that Lemon Squeezy is powered by Stripe who is overly strict.
“This is not a chargeback you’d lose. I win more than half of mine. Still a pain though.”
“Every high risk order I've ever fulfilled ended in a chargeback. Not saying it's got a 100% correct rate for everyone ever but in my personal experience it's never been wrong so now I just cancel them all. Sucks to cancel it and lose those fees tho, maybe look into creating a Flow that will only process payments for low risk (and medium if you want) orders”
Yeah, hopefully you find something that works within the budget
“The one thing that moved this for us on a similar permissions flow was putting a screenshot of the actual consent screen on our own page, right before the redirect. People bounce because it feels like a surprise more than because the wording is scary. Second one was letting them see something real first, even a fake dashboard with sample data, so the permission ask lands after theyve already decided they want it.”
“I get around 1000 orders a month. With that volume, some percentage of customers are going to try to take advantage of the system. A lot of the time they’ll open a chargeback because we refused to let them return very clearly used items with obvious signs of wear. We don’t hide our return policy at all - we even make everyone click a button to agree to it and there is a link to the policy right next to the button - but some people don’t read or they are entitled and think the rules shouldn’t app”
“Tbh I switched to Incode after my own chargeback nightmare and glad I did”
“I myself don't bother with medium fraud alert on Shopify and cancel the order. If they purchase on eBay or Amazon I'm more protected, but on Shopify when it's my judgement call, I just cancel. Why take the risk if the buyer has been known to be problematic even if it's just a "little"”
“Yikes. Sorry that happened to you. The site: 'Wise' has been useful for me in this situation. It's worth building trust with folks using secure sources like Stripe for checkouts. Freelancers: Contra, Fiverr, upwork all have safeguards and protections to help both sides feel supported. I think you're on the right track with your build. Keep us posted!”
“I would say you are correct even without doing any research, because thats how everything is going”
“I totally get it for large orders. Personally I wouldn't bother unless the business was doing hundreds or thousands of orders per week because a 'proper' setup takes some investment. Cameras can be cheap off aliexpress but it is the time cost I would not spend or pay for. I think you are underestimating how much time it takes to automate this. There are two methods - continuous surveillance and per-order videos. Neither is perfect. Continuous is easy, it is just a security cam aimed”
“Went into this assuming an extra fraud layer meant extra latency and extra friction for legit customers. That was the whole reason we kept putting it off. Turned out most of the scoring happens in the background using signals we were already sending, device data, velocity checks, past order history, so checkout didn't get noticeably slower for real customers. The actual friction only showed up for orders that already looked risky, which is exactly where we wanted a bit of friction anyway. Wh”
“Yeah I'm sorry but people who said they have won chargebacks, I'm starting to think they're lying to me lol. NO offense to those people.”
“I had a similar thing happen for a SaaS tool, Stripe said we were selling a telemarketing tool, it was a email sequencing tool. The appeals and review are pointless. Once the account is flagged that’s it. At your volume you will easily find a different provider, likely with lower rates.”
“Exactly - the scary part isn't the one refund, it's your dispute ratio getting held hostage. That's the real leverage they have, and the processor doesn't care whose "fault" it is. Best defense I've found is unglamorous: blocklist repeat offenders, document everything, and decide early whether a fight is worth the ratio hit or if eating the refund protects your standing better. Sometimes the "win" is just making them not worth your time.”
“Wayflyer will usually ask for bank statements or possibly link an API into your bank so they can see transactions. So, they’ll probably know. Conversely, Shopify doesn’t ask. So if you already have wayflyer, you could do Shopify capital if it’s been offered to you. Just remember not to get in over your head with loans.”
“As a small business owner that sells products via (Shopify) if someone defrauds your business do you share that info amongst other small businesses to warn them or just simply block the scammer from ordering again? I saw a video of a business that got scammed and she said the customers name and city and state. 4 days later I think I got an order from the same person that scammed her. Seems like they are targeting the same types of businesses. Well the name , city/state, was the same as what she”
“They are all slightly different based on the type of evidence that you're able to collect. But Chatgpt can spit out a basic template. The part people get wrong is the evidence. All your screenshots, annotations and descriptions should be clear, factual, accurate and concise. Make it very easy for the reviewer. Service Mark specimens are a good example of how to document evidence. https://bitlaw.com/source/tmep/1301\_04\_i.html”
“No way around this. There are millions of consumers and you're going to have bad ones. Don't take it personal and limit your risk. If you're getting a lot of chargebacks because customers not being able to clearly understand product info, you may have to rework how you describe the product in both text and visuals. Something obvious to you who are familiar with the product can be foreign to someone who's looking at a listing for less than 10seconds before they hit add to cart. If”
“This probably explains why delivery proof alone fails so often. Do you get the IP and device information directly from Shopify, or from another tool?”
“Yes all of them. At least when the chargeback type is unrecognized transaction/ fraud. Non delivery of goods I have to typically file a claim with insurance. The minimal time spent is worth it to me, especially if it deters a scammer from trying it with other people. I also use manual payment capture and any medium/ high risk orders must be verified with the four digit code technique or bank wire payment. That reduces the likelihood of getting chargebacks in the first place. Also, phone call the”
“Yes, this is 100% fixable, but you have to play the algorithm's game. Misrepresentation suspensions are almost always triggered by a bot sweep, not a human, usually because a piece of data on your site doesn't perfectly match your GMC account. For the video verification, they just want undeniable proof you are a real person operating at the exact address listed on your website. Since you work from home, here is exactly how to shoot it: Keep it one continuous shot. Do not edit, cut, or pa”
“A lot of B2B payment controls are concentrated at the beginning of the relationship. The company gets verified, its ownership is checked, initial sanctions screening is carried out, and then it is approved to start making payments. The problem is that risk does not stay frozen after onboarding. Operational risk can build quietly through everyday spending. Threshold splitting, reimbursement blind spots, duplicate vendor payments, unmanaged subscriptions, unauthorized spending categories, and shad”
“Hello, this is a hard question to ask because it benefit’s fraudsters. If you can DM your answers that would be better, BUT I want a business address now. I used my home and personal info to make it easier for brokers on spot freight to confirm I am in no way seen as fraudulent. Iv been doing long enough i need to upgrade. So, what are the odds I get nailed by every one of my backhaul brokers and spend 30-90days hauling back empty because I’m flagged as address change and insurance renewal in Se”
“asking them now what the alternative would be but if shopify doesn’t allow third party monitoring then none will work so what would the solution be in that case? What PMI they require: Stripe will need the name of the vendor engaged, and confirmation that you have implemented a 90-day monitoring process that fulfills the below requirements. If they have already implemented a solution that meets the PCI requirements below, please provide the name of”