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Shopify How to stop fraudulent chargebacks with Shopify payments


Hi all,

I've found the most simple and effective method to stop scammers and prevent fraudulent chargebacks. This guide is for anyone running a Shopify store and using Shopify Payments.

It took a minute to set up, saving me thousands in chargebacks and product costs.

Setup guide:
  1. Open your Shopify Dashboard
  2. Click on 'Settings'
  3. Click on 'Payments'
  4. Click on 'Manage' for Shopify Payments
  5. Scroll down until you find the 'Customer Billing Statement' section
  6. Add your 'Company Name' + 'Number Code' in the Customer Statement Descriptor. For example, 'SP * Shop Ecom 6290.'
  7. Update this code occasionally.

How it works:

Email the customer for medium/high-risk orders and ask them to verify the number code on their bank statement. In the example above, the customer must provide the code 6290. Place this order on hold until they verify your unique 4-digit code.

Most scammers will only have the stolen credit card details and will not have access to the cardholders' bank accounts to verify this code.

If they cannot verify this 4-digit code even after you help them locate it, cancel the order.

If the customer provides this 4-digit code and still opens a chargeback after processing their order, then it is very likely that you will win as long as you give the bank all of the evidence.
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  • It's simple and 99% effective. Another tip is enabling manual payment capture in Settings > Payments > Payment Capture > Manual. If you're dealing with medium and high-risk orders, you can cancel and refund them without incurring Shopify Payments fees. You can also set up Shopify Flow to automatically capture payments if risk is low.
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  • BTW, it can be attacked if someone makes two purchases: one is from the stolen card, and one is from a legitimate card. It's better to generate a hash from card details for each purchase and then take the last four figures. Yes, it's easier to implement with automatization.