Shopify chargebacks have become an important topic for many eCommerce merchants. Having the ability to avoid a Shopify chargeback is essential for any merchant looking to grow their revenue. At CB-ALERT, we can help you fight and win Shopify chargebacks, freeing up your valuable time and ultimately keeping money in your pocket.
This article will break down all merchants need to know about Shopify chargebacks and explain why we believe we are an excellent fit for your business.
We will cover the following:
- What is a Shopify Chargeback?
- How to fight Shopify chargebacks
- Shopify chargeback process
- How to prevent Shopify fraud
- How to win Shopify chargebacks
- Why should you partner with a chargeback management company to win Shopify disputes
What Is A Shopify Chargeback?
Shopify chargebacks occur when a customer files a dispute with their bank about a particular transaction with a merchant, resulting in the customer having the funds returned.
Shopify chargebacks can occur for various reasons but it typically related to the following:
- Customer dissatisfaction: The customer wanted to be happier with the quality of the product and felt like the product description duped them.
- Lousy Customer Support: Poor customer support results in many chargebacks. Often, the customer will try to reach out to the merchant about their frustration. 24/7 customer service can significantly improve your Shopify chargeback ratio.
- Unclear Subscriptions: If you have subscription billing from your Shopify store, be sure that you follow all current guidelines for subscription billing. If your trial offering isn’t up to date or is worded poorly, you are putting yourself at risk of frequent chargebacks.
- Dishonest customers: Not all chargebacks are from honest consumers. Hiring a chargeback management company to help you determine which cases are fraudulent can save you significantly in fees.
- Product wasn’t received: This is a common issue when ordering goods online. It can be tough to prove whether the consumer received a product.
- Unrecognized: When customers don’t recognize the merchant’s name on their credit card statement, they may react and think it was fraud. Using accurate billing descriptors can help here significantly.
- Duplicate: The customer believes you double charged them for one product. If you prove that you charged them accordingly, you have a great chance at a chargeback reversal.
Shopify Chargeback Process
The Shopify chargeback process is similar to a typical process; only you will receive the chargeback processing fee from Shopify.
It’s important to note that Shopify is not in charge of the result of the chargeback dispute.
Below is the Shopify chargeback process:
- Cardholder disputes a transaction with their bank
- Cardholders bank sends the chargeback request to the credit card network and removes the disputed amount plus the chargeback processing from your account
- If you choose to fight the chargeback, you are asked to provide evidence to the credit card company that the charge was valid
- Merchant gathers evidence by themselves or with the help of their chargeback management company
- You complete the chargeback response and submit it to the credit card network
- At this point, the credit card brand reviews your request, and this process can take up to 75 days
- The credit card company resolves the chargeback
If the merchant wins the chargeback, the cardholder’s bank returns the disputed amount to the merchant, and Shopify refunds you the chargeback fee.
If the chargeback results in a partial win, the cardholder’s bank returns some of the disputed amounts, and Shopify returns the full chargeback fee.
Should the merchant lose, they are out for the cost of the goods, the processing fee, and potential shipping fees.
How To Win Shopify Chargebacks
Winning Shopify chargebacks is not always easy. With that being said, following these steps can significantly improve your chances of winning and preventing disputes.
Here are some common steps Shopify merchants should take to mitigate chargebacks.
- Use robust fraud prevention tools: Implementing tools such as 3DS2 authentication, RDR, and chargeback alerts.
- Use a merchant descriptor: Make your company more recognizeable by using an accurate merchant descriptor.
- Partner with CB-ALERT: At CB-ALERT, we specialize in helping Shopify merchants stamp out fraudsters before it even begins.
- Communicate transaction details: Make sure your customers understand exactly what they purchase, including the price and associated fees and whether or not it’s recurring.
- Provide excellent customer service: 24/7 customer service is required for most Shopify businesses. Customer’s expect assistance at the time of their problem and if they don’t have it, they will go directly to their bank.
- Issue a refund: In almost every case, a refund will cost you less than a chargeback. Refunds also give you a better chance of bringing the customer back.
- Use clear and concise billing descriptors: Make sure that the descriptor on your customer’s credit card statement is clear and easy to understand so that they are less likely to initiate a chargeback due to confusion.
- Accurate records: Maintain detailed records of all transactions, including customer contact information, order details, and any communication with the customer. This can be helpful in the event of a chargeback dispute. Having proof of any customer purchases can strengthen your case in the dispute.
- Monitor and address chargebacks: Use chargeback alert systems to monitor for chargebacks and address them promptly. This can help to prevent chargebacks from becoming a more significant problem.
- Scrutinize Irregular Orders: If you notice an order come in from another country that you typically don’t see or if the amount is far more significant than usual, look into it to ensure it’s accurate.
By following these ten steps, you can squash many Shopify chargebacks.
Shopify Chargeback Protection
Shopify does offer Shopify chargeback protection through Shopify Pay; however, it is in beta. Additionally, it’s important to note that not all orders are eligible for Shopify coverage.
Eligible Orders must have the following:
- Be a physical item that requires shipping
- Be processed through Shop Pay
- Be purchased from a merchant in the U.S. with a valid U.S. Shopify Payments account
- Be fulfilled within seven days of the order taking place and in transit to the customer within ten days
- Have valid tracking information
Orders that aren’t eligible for Shopify’s chargeback insurance will progress through the normal chargeback process.
Are Merchants Responsible For Shopify Chargebacks?
You’re likely dealing with a chargeback problem if you’re viewing this article. The obvious answer is yes; merchants are responsible for chargebacks on the Shopify platform.
With this being said, you can learn more about Shopify’s chargeback policy here:
Shopify Chargeback Fees
Shopify has its own chargeback fees, depending on the industry and location. Here is a payment structure below:
- Australia 25 AUD
- Canada 15 CAD
- United Kingdom 10 GBP
- United States 15 USD
When the bank sends the chargeback to the merchant, this processing fee will be charged to you from Shopify.
Apply Today With CB-ALERT
Are you looking to stamp out fraud today? We pride ourselves on a quick turnaround time and will be able to set you up swiftly.
- 3-6 months processing history of statements
- Voided check
- Principal’s driver’s license
- Proof of operating address
- Company EIN document
- Business plan – optional
- Chargeback ratio
- A functional and compliant website with login credentials
The more details you can provide us when reaching out, the faster we can get you approved and fighting chargebacks.
Why Choose CB-ALERT To Help With Your Shopify Chargebacks
Shopify chargebacks can wreak havoc on even the most successful business ventures. However, avoiding chargebacks and winning disputes can take your business to the next level.
With over two decades of experience in online billing, we can help grow your business and be a vital piece of the puzzle. Below are some of the things we bring at CB-ALERT:
- Chargeback prevention alerts
- Verifi alerts
- Ethoca alerts
- 24/7 customer service
- Transparent pricing
- Gateway/CRM agnostic
- Order Insight
Please fill out the application below to find out how we can help your business.
Was Your Shopify Merchant Account Frozen?
Chargebacks can lead to frozen funds on the Shopify platform. So whether you’re using a third-party processor or Shopify’s built-in processing, you need to control your chargeback ratio.
If you’re having problems keeping your chargebacks under control, we can help you save money on processing fees and help you win chargeback disputes.
Managing Your Shopify Chargeback Management With CB-ALERT
Dealing with Shopify chargebacks is not only time-consuming, but it’s also costly. Especially if you’re not up to date with card brand schemes.
Each time you fail to prevent a chargeback, you’re losing money on the item, chargeback fees, and shipping fees. On top of this, you could end up paying higher processing fees dues to a poor chargeback ratio or find your account terminated.
Should you choose to work with CB-ALERT for your chargeback management, you will notice revenue gains, lower chargebacks, and more time to grow your business rather than spending time on disputes.
CB-ALERT can help you with the following:
- Analyze your website to fix any holes as to how chargebacks are occuring
- Resolve customer issues before chargebacks
- Determine which disputes are worth fighting
- Analyze chargeback data to improve your overall strategy with chargeback prevention
- Identify problems that were hidden
- Program chargeback responses using automated tools
When you pair CB-ALERTS chargeback suite with a powerful e-commerce platform such as Shopify, you will win more disputes and set yourself up for success.
Fill out the application below to find out how to pair with CB-ALERT to stamp out your Shopify chargebacks today.