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How to Prevent Shopify Chargebacks

Chargebacks can be a nightmare for Shopify sellers, cutting into profits, wasting time, and potentially damaging your relationship with payment processors. 

For eCommerce merchants on Shopify, preventing chargebacks before they happen is critical to maintaining a healthy business and ensuring customer satisfaction.

In this guide, we’ll walk you through the most common types of chargebacks, why they happen, and how to prevent them from impacting your Shopify store. Whether you’re dealing with fraud, unrecognized transactions, or delivery disputes, we’ve got tips to help you stay ahead of the game.

Why Do You Get Chargebacks on Shopify?

Chargebacks occur when a customer disputes a transaction on their credit card statement. These disputes can arise for various reasons, from fraud to dissatisfaction with a product. When a chargeback is filed, Shopify notifies you, and you have the opportunity to contest it by submitting evidence.

If you're unable to provide compelling evidence to refute the claim, the chargeback will stand, resulting in a loss of revenue, plus any goods or services already delivered. Worse still, accumulating chargebacks can lead to higher fees from payment processors or even the termination of your account.

Below is a table outlining the common reasons for Shopify chargebacks and what you can do to address each type:

Reason for Chargeback What It Means How to Prevent It
Fraudulent The customer didn’t authorize the transaction. Ensure your billing statement is recognizable and use AVS checks for suspicious orders. Send receipts immediately.
Unrecognized The customer doesn’t recognize your store’s name on their credit card statement. Edit the billing statement to reflect your store’s name or domain clearly on the customer’s bill.
Duplicate The customer believes they were charged twice for the same product. If a double charge occurs, refund immediately and notify the customer. Keep clear receipts and product descriptions.
Subscription Canceled The customer was charged after canceling a subscription or expected a reminder before being billed. Cancel subscriptions promptly and send confirmation. Be transparent about recurring charges on the sign-up page.
Product Not Received The customer claims they never received the goods or services purchased. Use tracking and delivery confirmation. Notify customers of shipping delays and provide accurate shipping estimates.
Product Unacceptable The product was damaged, defective, or not as described. Ensure product descriptions are accurate, pack goods securely, and replace defective items quickly.
Credit Not Processed The customer returned the product but hasn’t received a refund yet. Have a clear return policy and process refunds promptly.

What Can I Do to Prevent Chargebacks on Shopify?

Preventing chargebacks on Shopify starts with being proactive. Here are some key steps you can take:

  1. Investigate Suspicious Orders: If an order seems off, especially with unusual billing or shipping details, take the time to investigate before fulfilling it.
  2. Use Clear Billing Descriptions: Ensure your store’s name or domain appears clearly on customer billing statements. This helps customers recognize the charge and avoid accidental disputes.
  3. Provide Order Updates: Keep customers informed with tracking information, and provide clear estimates for shipping times. If there’s a delay, notify them immediately.
  4. Have Clear Policies: Display your store’s policies regarding shipping, returns, and subscriptions clearly. Ensure your customers understand what to expect before making a purchase.
  5. Process Refunds Quickly: If a customer cancels or returns a product, process the refund promptly to avoid any unnecessary disputes.
  6. Keep Records: For every transaction, keep detailed records, including receipts, tracking information, customer communication, and shipping details. These will serve as vital evidence if you need to contest a chargeback.

Manual Chargeback Responses on Shopify: Time-Consuming and Risky

If you receive a chargeback, you’ll need to manually fill out a response with evidence that proves the transaction was legitimate. This process can be tedious and time-consuming, often requiring back-and-forth communication with payment processors.

You’ll need to submit detailed evidence such as receipts, shipping confirmation, customer communication, and any other relevant information to contest the chargeback. 

But even with all this effort, there’s no guarantee of winning the dispute, and the process could take weeks or even months.

How You Can Automate Chargeback Handling on Shopify

Handling chargebacks manually is a drain on time, money, and resources. But what if you could automate the entire process? 

That’s where Disputifier comes in. This Shopify app takes the hassle out of chargeback management by handling disputes for you, from start to finish. Here’s how:

Chargeback Alerts

Disputifier uses real-time alerts from Verifi™ and Ethoca™ to catch disputes before they turn into full-blown chargebacks. This proactive approach lets you issue refunds or resolve the issue before it impacts your chargeback ratio.

AI-Powered Responses

Disputifier's AI is designed to craft optimized responses tailored to each dispute. By analyzing hundreds of data points, the system creates strong, evidence-backed arguments to increase your chances of winning the chargeback.

No Win, No Charge

Unlike other services, Disputifier only charges you when they successfully win a chargeback on your behalf. This makes it a risk-free solution—if you don’t win, you don’t pay.

Saves Time and Money

With Disputifier, you can say goodbye to hiring extra staff or spending hours managing chargebacks. It handles everything automatically, saving you valuable time and resources while delivering up to a 5X ROI.

In short, Disputifier doesn’t just automate chargeback handling—it ensures you win more disputes, protect your revenue, and run your business more efficiently.

Final Thoughts

Preventing chargebacks on Shopify is crucial for maintaining a healthy business and protecting your reputation with payment processors. 

While you can manually handle disputes, this process is often tedious and unreliable. Instead, using an automated tool like Disputifier ensures you prevent most chargebacks before they happen and save time on managing those that slip through.

Don't let chargebacks slow your growth—install Disputifier and protect your Shopify store today!

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