24/09/2024
What is Shopify Fraud?
Shopify merchants often face many types of Shopify scams and fraud such as stolen card details, account takeovers, and chargebacks.
A chargeback happens after a customer disputes the transaction with their issuing bank. The issuing bank then works with the evidence and then reassigns the chargeback expense to the merchants using the card network.
According to a recent study, global payment fraud is rising and will cost merchants $40.62 billion by 2027. And some of the reasons are:
Double billing
Incorrect amount
Unrecognized purchase
The item was not received at the customer’s end
Customer dissatisfaction
Malicious fraud like stolen goods
Friendly fraud
What is Shopify Fraud Prevention?
Shopify’s fraud analysis or Shopify fraud protection helps spot fraudulent orders by reviewing high-risk orders to avoid potential chargebacks. Processing high-risk orders may result in a higher number of chargebacks, thereby disabling payment processing and removal from Shopify Payments.
Shopify fraud analysis is designed to work with online credit card orders to verify payments. The opportunity for fraud also goes from merchant to customer with fake stores on the platform.
A Fakespot analysis found more than 25,000 that engaged in some form of fraudulent activity like counterfeits, privacy leaks, or buying fake reviews.
