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shopify fraud analysis

Published on: January 27 2023 by pipiads

High RISK of FRAUD! What To Do With Fraud Orders On Shopify? Keep Calm - We got you covered!

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Shopify High Risk of Fraud Detected. Shopify Fraud Analysis. High-Risk Shopify Order [EXPLAINED]

hey everyone. it's Jamie here from Shopify masterclass and in this video I'm gonna be going over high risk orders in Shopify- the fraud analysis. I'm going to explain what it means and what you should be paying attention to so you don't get credit card chargeback. before I dive into it, I just want to say that if you're into any of this content, I would love it so much if you hit that like And subscribe button below. I also want to mention our sponsor, profit calc, The one-click Profit calculator. it's going to allow you to skip your spreadsheets and get back to Growing your store with real-time calculations. all you have to do is select the date range you're looking for and it's going to do those calculations for you, giving you a ton of time. there's a link in the description below to access a 15-day free trial, and I'm also going to show a quick video showing their full feature set. are you a Shopify business owner who spends hours doing your accounting? have messy spreadsheets kept you from growing your business? discover profit cap, the affordable and easy to set up Shopify app that crunches your numbers in just one click. it automatikally syncs with all your accounts and expenses to calculate your profit, displaying everything in an easy to read dashboard so you understand your business in real time. start for free on the Shopify app store today. but first let's tok about high risk orders. where are they going to show up in your Shopify store once you're logged into your store? on the back end, if you go to the left hand side to orders and you click on any of the orders, it's going to give you a fraud analysis and that's going to be on the right hand side. if you go down to the bottom, it's going to be under here and this was a test order, so there's no payment method captured. if you click view full analysis, it's going to give you a detailed breakdown and so this fraud analysis is provided by Shopify and what they're going to look at is several different indicators. I'm going to do a test to give it a categorization of not fraudulent, a medium risk and there's also be a high risk. so it's going to look at several different indicators. so they're going to look at the credit card verification value is correct. the billing street address matches credit cards registered address. the billing and zip code match to credit card registers address. how many payment attempts were there when it was made? with how many credit cards which billing country matches where the order took place. you're also going to look at the IP address used to place the order isn't in a high risk internet connection. you're also going to look at where the shipping is in relation to the IP address. so we'll look at several factors in determining the risk of an order. so let's go over multiple scenarios. so the first scenario is that everything is okay. you're not going to get a recommendation here, so there's no need to think about refunding anything to prevent chargeback. but then you start to get into other scenarios where you have a medium or a high risk. so there are two ways you can go about it. you can do nothing. you can go fulfill the order. you can send out the package and hope nothing comes in the way of a chargeback. and if you don't know what a chargeback is, it's when a customer submits a complaint to their credit card company to say, hey, I never ordered that product, no one else did. it's fraudulent. therefore I want my money back. and so what happens next is that credit card company in the bank will then tell your Shopify store and it's going to freeze the funds there. it's going to freeze the fines of the order, Plus usually 15 on top of that as a processing fee for the chargeback request. they can go one or two ways. one: if they side with the customer, they're going to get their full money back and you're going to pay full refund there plus 15, and then you're also going to incur the prod cost if you shipped it out already. if it goes in your favor, so you as the merchant, then you're not gonna have to do anything. you get your fifteen dollars back and you get up the locked up funds. so typically this process can take a while. it can take 45 days, even longer, depending on when the request was submitted and when you submit your own response to that. so overall it can be quite negative here. if it is a fraudulent order, as you'll be paying the 15 plus the full refund, and if you ship the product out, you're gonna lose out on that as well. so if you see fraudulent orders, you do get the option to refund it right away and that's going to cancel that transaction there. so let's say you receive an order it says it's going to be a risk of being a fraudulent order, you can take a proactive step, issue a refund and not send out those products. that's going to save you quite a bit of fees here and the headache later on of having to fill out these chargeback forms. I know in my personal experience I have taken the risk before I'm saying, hey, this price should be fine, even though it says it's high risk. I'm going to send this order out anyways and hope everything goes my way. but in some cases charge back and submit it and then I go lose out on that response and that's a lot of money out of your pocket. especially if you're a solo drop shipper or a solo Shopify founder. you're using your personal funds. if you're not making many money at the beginning, this can be a huge expense here and something that is no fun when you're building up your Shopify store. in conclusion, here you do want to be paying attention to the fraud analysis again. it's going to be located in the bottom right to your orders. here you're also going to get alerts if these are high risk as well, depending on your notification setup. but it's something you want to pay attention to, as you can take a proactive step and issue a full refund if it is looking like it's going to be a fraudulent order. there are also apps available on the Shopify app store where you can block certain customers or certain geographical regions if you're getting quite a few fraudulent orders from certain ones. this is going to conclude the video here on high risk orders explained. I hope you got an overall understanding now of the process and why it's important to pay attention to these indicators. if you enjoyed this video, I would love it so much if you hit that like And subscribe button below. if you have any questions, leave a comment. that's the owner. mention profit calc one more time, the one-click profit calculator available on the Shopify App Store. it comes with a 15 day free trial and there's a link in the description below. thank you so much for watching and I'll see you in my next video, foreign.

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Shopify Fraud Protection: How To Handle High Risk Orders [2021]

if you're running an e-commerce business, there's a good chance you've already experienced some fraudulent orders. some scammers out there just take advantage of the online shopping world, steal credit card information from innocent people and place fake orders on your website and later on, the credit card owners ask for their money back. hey guys, what is going on? this is eric from steelops, and in today's video, i'm going to teach you everything you need to know about how to handle high risk orders for your shopify store. let's just jump into the video. customers can file a dispute using the payment method they used and asked for the money back based on few different reasons: one, payment wasn't authorized. two, product wasn't delivered. three, product not as described. four, product was damaged during shipping. and five: wrong items sent. this is where you send, let's say, an extra large t-shirt when the customer ordered a large t-shirt. these mistakes happens every once in a while. once a dispute has been filed, a case is being opened against you in your payment processing account as the seller. if the customer wins, he gets his money back and you lose the product as well. and if you win- which rarely ever happens- you get the money back and the customer doesn't have to get a compensation. managing high-risk orders in your e-commerce stores and responding to disputes is highly important and if you're going to ignore that, it's going to cost you and fortune. i want to tell you a personal experience i had about three years ago. i got a charge break for five thousand dollars. i lost the money. that was super painful and very traumatik for me and my previous business partner, but i can tell you that ever since, we took this subject very seriously and i highly recommend you guys do the same and use the tips that i'm gonna say in the rest of the video. okay, guys, before we move on, i just wanna ask you please, if you like the video, if you like the content, make sure to subscribe so you know whenever we release new videos. also, if you have any comments, questions or anything regarding high risk orders or anything else, just comment them in the comments section below and we'll make sure to answer each and every one of you. let's continue with the video. it's important to understand that orders that come through search engines like google have a higher chance of being high risk orders. let's say you're a scammer and you just stole a credit card. there's a good chance you're not just gonna go through facebook feed and then find an ad with something you want to buy and buy it, there's a better chance: you're just going to head over to google, find the thing that you want to steal and just buy it this way. so just be aware that google have a higher tendency of generating high risk orders. so the order's origin can be one sign of a high risk order. let's tok about some other like red flag that could mark an order as high risk. first of all, whenever you see a billing address that is far away from the shipping address, that might cause a red flag and you better look into this order. another red flag that you can notike is whenever someone changes the shipping address after the order has been made. you better look into that. many times, scammers just place an order with the original billing and shipping address and then just call the support and ask them to change the shipping address to their actual location or a po box or anything they can take advantage of and stay under the radar. another thing you should be worried about or just have in mind is phone orders. many times, scammers uh try to place orders over the phone instead of the online store, because this way you have less information about them, but there are systems in place. they can verify phone orders. i highly recommend checking it out. we'll tok about it later in the video. another thing that you should be worried about is large orders. let's say that your store have on average- i don't know- average order value of 50 and suddenly you get an order for 5 000. you need to make some due diligence, contact the customer and make sure that this order is legit, especially if they're placing such a big order without content you in advance. usually, before placing a big order like that, the customer is going to contact the store and if it doesn't, that's a red flag. you better look into that. and a final very big red flag is whenever you see that there were multiple attempts to complete the order and only like after five different credit cards, the order went through. that's a red flag. you better look into that as well. okay, guys, so we toked about some of the red flags that can mark an order as high risk. now how do you handle each and every order like that? first of all, luckily for you, shopify have a built-in fraud detection system that's going to mark each order as either low, medium or high risk of fraud. let's tok about how to handle high risk orders. first of all, if you see an order that is marked by shopify is high risk order, i highly recommend diving deep into this order and either cancel the order immediately, because there is a good chance the disorder is actually fraudulent, or make some due diligence and contact the customer and ask him for a few things that going to make sure that you are risk-free. let's call it this way: first of all, you want a government issued id by the customer. you also want a credit card picture the customer used to pay for the order and you want to make sure that the name of the customer actually matches the government issued id. you can ask him to hide all the details except for the last four digits of payments and the name. last thing you want to make sure is you want a proof of date, so a picture of a newspaper or anything like that. i know it sounds very harsh and very extreme, but that's the only way that if you get a dispute later, you're going to be risk-free and there's a good chance you're gonna win the dispute. the second thing you want to do is use automations. so because you already automatikally recognize some of the high-risk orders, you can utilize some automations to try and solve them and don't have to do it all manually. one example is you can use reconvert to detect high-risk orders and display a message on the order confirmation page explaining the customer that this order is a high risk and if he's not going to comply and send you the following details, you're going to automatikally cancel the order. so this is one second. you can do the same with emails and sms. if you find an order that is high risk, you can send an sms or an email to the customer letting him know: all right, we have an issue with this order. if you're not going to provide the following details, we're going to cancel it. okay, and the third automation that i recommend using this one is if you're on shopify plus is using shopify flow to set up an automation that after 72 hours, if you didn't get these uh details, the order is automatikally being cancelled and the money is being refunded. it's much better then later on uh losing both for um, the product price, shipping price and lose the money that the the customer paid. so it's better to just cancel the orders if you're not sure how to handle them. the third tip that i got for you is: use some fraud detection and fraud prevention apps that connect to your shopify store and deeply analyze each and every order much better than the basic shopify for detection system. they can also offer you protection for phone orders because they sending the customer through a partikular ip or anything like that. i'm not sure about the details, but it's working very well. they are also going to offer you an insurance in exchange for a small fee from each order so that, even if you do get a chargeback, you get the money back from there. so that's a great insurance to have in place. the last tip that i have for you, and it's very important to understand: not all chargebacks are happening because of fraud. sometimes it's just the customers not being happy. maybe they didn't get the produ.


The Best Way to Handle High Risk Orders on Your Shopify Store (Step by Step Tutorial)

high risk orders. this will happen in your e-commerce journey and you need to learn how to handle it. an order is marked high risk whenever shopify detects that this order might be fraudulent. shopify uses high-end algorithms and codes that let them know whenever an order might be fragile. they have so much data and so many years of experience in the e-commerce space that they already know exactly when you need to pay close attention to an order and, the best part, they are always improving these algorithms by the day. just to give you an example, shopify knows that whenever there is a difference between a billing and a chipping address, most likely this order might be fraudulent and you'll start notiking in your e-commerce journey that this type of orders will start getting flat. that is why you need to pay close attention with fulfilling this type of orders because most likely you will be getting a charge back. this happens when the credit card owner notikes a charge on his or her car and if they didn't make the purchase, they will dispute the charge. and the worst part about this as a business owner is that the bank can reverse the funds, taking them from your account to the credit cards holder. this decision is only made by the bank and not by shopify. so the only thing that you have left is to wait, and also be aware that if you start getting a ton of charge packs on your store, shopify will deactivate shopify payments from your store. the same will happen with any type of payment processing that you're using on your store. as soon as they start seeing that you're getting a ton of chargebacks, they will get suspicious and then suspend your account. i know you're getting penalized from chargebacks, but if you're getting too many of them, obviously this sends a signal that something is happening with your products and services and people are not satisfied with them. so you have two sides. one of them is the person trying to take advantage from the store, trying to use a credit card from another person, or you have the business trying to take advantage from their customers, selling them faulty products or no products at all. these scenarios will cause you to lose money and inventory, so make sure you pay close attention. the first thing that you need to do whenever you get a high-risk order is to investigate the case. so go ahead, open the order and go to the order front analysis. just go all the way down and click view full analysis. when you open the window, you will see a low, medium or high rating and also find indicators with more information if you're in the basic plan or not using shopify payments. you won't be able to see the actual low, medium or high rating, but you'll be able to see the indicators. inside the indicator section you will be able to see different colors. the green ones are actually a good sign for legitimal orders, the red one is an indicator for fraudulent orders and the gray indicator may give you some extra information that might be useful during investigation. number two is to verify the ip address associated with the order. under the indicator section, you will be able to see additional information right there. you can take the ip address of the transaction. you can use several websites to scan an ip address. just go to google and write ip address lookup. the first question that you need to ask yourself after looking the ip address is to see the location of the ip address matches with the billing address. the second thing that you need to check is if this ip address is from a hosting company, and the third one is if this ip address is actually coming from a proxy type of service. if any of these holds to be true, you need to contact the customer before shipping the product. that is why you need to ask for a phone number inside the checkout. fraudulent orders usually use fake numbers, so most likely, if you're not able to contact this person after everything that you did, you shouldn't ship the item and also refund the order. if this person answers the phone, just ask a few questions like the phone, email or address. if they are the actual owner of the car, they should know this. you can also look for the phone number to see if the actual area corresponds to the actual location of the billing address. now, after doing all of this investigation, it's up to you to decide if you want to actually chip this order. if not, go to your order page, open the fraudulent order, click more actions and then click cancel order. on the pop-up window, select refund and the reason for cancellation. select fraudulent order. then you can select if you want to notify the customer and then click cancel order. now you know how to handle a high-risk order. if you want to learn more about shopify, e-commerce or digital marketing, go to heymanesscomstoolkid to grab all of my free resources to take your store to the next level. thank you for watching and i will see you in the next one.

How To Deal With Fraud Orders With Shopify | ULTIMATE Fraud Prevention Guide

yo, what's going on? everybody shriek Canosa here. so fraud orders- how do you deal with fraud orders? now, one thing we can all agree on is nobody likes dealing with fraud orders, for several reasons. not only our fraud orders harmful for your business because they lead to high dispute rates, but they also take a lot of money from your pocket and make you just feel all stressed out and all kinds of emotions, because when you shipped out the order, you also invested money and actually buying the product, then maybe in the shipping cost of the product and finally sending it out to the customer. so you did everything that you possibly could, but despite that, the order turned out to be fraud and in the end, it actually ended up costing you money. the interesting thing to know about fraud orders is that banks often take the customer side in such cases, and that's because, when it is a fraud order, it is actually really hard for the bank to resolve the case in your favor, because even the slightest evidence in their favor could end up taking the case in their favor. so that's why it's really important to know exactly how to deal with these fraud orders, so that you can actually focus on building a good business, whether it is drop shipping or an actual brand, and take away the attention from having to fill out the form to fight these fraud orders. but if this is the first time you're watching one of my Shopify videos, pause this video for literally two seconds and smash that like button down below and subscribe if you haven't already, but let's just jump right into it. so, dealing with fraud orders, let's start off by toking about why should you even worry about fraud orders in the first place? what is the big deal about fraud order? so let's start off by toking about the cons of fraud orders. how could they hurt your business? the first thing you have to understand is that, whether it is a fraud order or a simple dispute regarding any other issue, the bank actually charges you a certain fee because of that dispute and if the case is not found in your favor, meaning that you lose the case for the dispute, the bank takes a fee from you, and this fee can range from anywhere between $0 to $100, and that depends on which payment gateway that you use, which is why it is also important to use the correct payment gateway provider. but the charge mat fees are so expensive that not only are you having to lose the money would the cost of the product itself, but then you also have to pay the for that dispute. so in the end you end up losing a lot more money unnecessarily and this of course hurts your business because that means that's more profits gone from your pocket which you could have kept to maybe reinvest in the business. so that's one of the biggest issues when it comes to dealing with these fraud orders. and again, oftentimes the bank actually sides with the customer, which is another issue, because again that leads to less money in your pocket. the second problem with fraud orders is that increases your dispute rate. and one thing you want to know about dispute rates: if your dispute raised goes above a 1%, the payment gateways actually start to keep a very, very close eye on you. it's kind of like a hawk looking down from the sky to find its prey, because at that point you're under the payment gateways radar and any small mistake or any increase in dispute could actually lead to you getting banned from that payment gateway. so again, that's gonna just harm your business in the end because you won't have a payment gateway to use and especially if you're in the process of scaling a product, not having a payment gateway will lead to a lot of more problems. so that's one additional reason as to why you want to avoid fraud orders as much as you can, because, again, an increase dispute rate leads to just more and more problems down the line. the third biggest problem with fraud orders is brand reputation. now, what do I mean by this exactly? well, when a brand starts to face a lot of these fraud orders, they're dispute rates go up and if people start finding out that other customers are starting to dispute more and more of their orders, this is going to ruin your entire brand's reputation, because then you lose trustworthiness as a brand, and when you lose trustworthiness, people are not really that inclined to purchase from you. they would rather just Google the product that you're selling and buy from somebody else. so when your fraud rate increases, your dispute rate increases and your brand reputation starts to decline, because then customers are complaining and not every fraud dispute is going to be a fake. of course, there are often a lot of fraud disputes that may be real, but if people start telling other people about these disputes and how they're having issues dealing with your company, that's just bad brand reputation for you and that just leads to more and more problems down the line. but in addition to that, the worst part is your shipping out the product to the customer and since the customer disputed, the entire transaction Plus and you now have to pay the chargeback fee, you also lost the amount of money that you're invested in buying the product. and it could be a cheap product- may be $5, $10 or it could be something more expensive in case you're dealing with high tiket products. and especially if you're dealing with high tiket products, the cost of goods actually adds up over time. so the losses become much, much bigger when dealing with these disputes and these fraud orders. in addition to the cost of the goods itself, a lot of people- I- also pay for the shipping cost of the product, or maybe they also pay for some kind of insurance in case your actual brand and you ship from your own warehouse. so that's an additional cost and in addition, so that you're just losing profit overall dealing with these disputes and these fraud orders and in the end, unfortunately, all of this leads to just an additional amount of stress, lost sleep and an unprofitable business if you're not exactly sure how to deal with these fraud orders and how to prevent them in the first place. of course, nobody likes dealing with stress, nobody likes losing their sleep over such things and, of course, everybody wants a profitable business. so that's why it's so important for you to know exactly how to deal with these chargebacks and fraud orders, so that you can focus more on building your business. but now that we've gone over the exact cons of having to deal with these fraud orders and how they can harm your business, let's tok about how you can actually deal with them in the first place. so what are the first thing that you should be doing when it comes to dealing with fraud orders? the first thing that you want to actually do is enable something called the Avs check, which is known as the address verification system check, and the CVV check, also known as the card verification value check. the Avs check, if you haven't guessed by the name, actually is a special cyst which, if you use Shopify payments or stripe or any other payment gateway, allows you to actually enable, and this is a setting which you can enable within your payment gateway. if you're not sure as to how to enable this, just go ahead and go to your payment provider and chat with the support team to ask them how to enable this. but this should definitely be enabled because in my own experience this has saved me a lot of money because it does a really good job of stopping those fraud orders from coming in. basically, a lot of people who do these fraud orders or steal other people's credit cards fail the Avs check because sometimes they get the address incorrect, they're not exactly sure as to what the real address is of the credit card and the Avs system does a really good job of making sure to stop those orders. in addition to the Avs system, the CVV system also does a great job of stopping the orders. basically, what the CVV check does is it checks those special security code, sometimes a three digit or the four digit code on the.

Shopify UPDATE ! Avoid Chargebacks and Fraudulent orders with Shopify Protect

hey guys, it's the ecom bull here, and today i'm bringing you fresh news. shopify has just released a new free fraud prevention program. and it's not even a prevention program, because this is meant for when actually fraud already happen. when you get scammed and somebody purchases something from your website with a fraudulent card and then they file a chargeback, shopify will cover the chargeback fees, which is normally 15 plus the cost of the order, and this is free. you don't have to add protection or anything like that. this is included. as long as they pay with their credit card using the shopify pay or one of the payment systems that they allow, then you get it. if you think that this is not a big deal, well, let me tell you that i have been suffering from fraud since i started e-commerce. it doesn't matter which platform i use and it doesn't matter which marketplace. even on amazon, i have had to pay chargeback fees for orders that were fraudulent that their system didn't catch. i was still responsible for it until now on shopify or woocommerce or magento. you know you will have filters that will tell you: okay, this order seems fraudulent or this order seems legit. you know, sometimes you will get an order, let's say, from morocco, and it's from items that you don't really sell that often and it's a large order. you know that that's probably fraudulent, but sometimes you get orders that are super hard to decide if it's legit or not and then you know you just risk it, right, you risk it, you send the products and then a month later you get the charge back. you lose the product, you lose the money, you lose the chargeback fees. it's not pretty, it's not encouraging, it's it just feels really, really bad, and that is why i'm super excited about this new feature. you don't need to set this up, it is automatik, but let me show you the official announcement and what orders, what fulfillment methods, are covered. alright, so this is the email that shopify sent me. i got early access, but it will soon be rolled out to all of the stores. and check this out: keep your money. shopify protect the name of the program right- covers the total order cost and chargeback fee on fraudulent orders, so your revenue doesn't take an unexpected hit huge. and then this is the shopify page. here you can see, you know all the details and, if we look closely, fulfill eligible orders within seven days and provide tracking number from usps, ups, canada post, dhl, fedex or the shopify fulfillment network. so that's the only thing: you need to be eligible for this. and well, of course, shopify has to tell you that it has protection, and i'm gonna show you where that will be located. so here on the orders page, you will be able to now filter and see which orders have the shopify protection. it's still not working right now. if i choose something, you know not protected or protected or protection active, is not working. you know, i got super early access, but i assume that this will start popping up there and showing everything, and also i assume that they will add a column that has the shopify protect, just to, you know, to get a little icon here saying that, hey, this order is protected and that's it, guys. thank you so much for watching all the way to the end. remember to like and subscribe if you want to stay up to date with all the news in the e-commerce world. i'll try to keep you posted, thank you, thank you, thank you. i'm out. [Music].