Shopify's fraud analysis tool is designed to help you identify potentially fraudulent orders and protect your business from chargebacks. Here’s how it works and how you can utilize it effectively:
Fraud Analysis Indicators
Shopify uses various indicators to help determine the potential risk level of an order. These indicators include, but are not limited to:
- AVS Checks: Whether the credit card’s address verification system (AVS) checks pass.
- CVV Code Verification: Whether the correct card verification value (CVV) was provided.
- IP Address Analysis: Details about the IP address used to place the order.
- Multiple Credit Card Attempts: Whether multiple credit card attempts were made.
These indicators are displayed with color-coded icons:
- Green Indicators: Suggest normal behavior that aligns with legitimate orders.
- Red Indicators: Highlight suspicious behaviors commonly associated with fraudulent orders.
- Grey Indicators: Provide additional neutral information that could be useful.
Third-Party Fraud Apps
Shopify’s App Store offers third-party apps that enhance your store’s fraud prevention capabilities. These apps integrate with Shopify's fraud analysis and provide additional insights and recommendations.
Fraud Recommendations
Shopify’s fraud recommendations classify the risk level of each online credit card order into low, medium, or high. Orders considered medium or high risk are flagged with a warning symbol on the Orders page.
Managing Fraud Analysis:
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View the Fraud Analysis:
- Go to Orders in your Shopify admin.
- Click on an order number to view its details.
- Look for the Fraud Analysis section to review the indicators and risk level.
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Reacting to High-Risk Orders:
- Verify the Order: Contact the customer for verification if there are doubts.
- Cancel the Order: If verification fails or you suspect fraud.
- Refund the Order: If the order was paid but you suspect it's fraudulent.
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Use of Fraud Analysis Apps: Consider integrating third-party fraud prevention apps for enhanced security, especially if your store processes a high volume of transactions.
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Testing Fraud Analysis:
- Use specific test email addresses provided by Shopify to simulate different risk levels (high, medium, low).
- Ensure transactions are above zero value and use Shopify Payments in test mode.
Important Notes:
- Manual Payment Capture: If you're worried about fulfilling potentially fraudulent orders, consider switching to manual payment capture. This allows you more time to review orders before capturing payment.
- Refund and Chargebacks: Be aware that Shopify does not cover chargebacks. The decision to reverse funds is made by the credit card issuer, not Shopify.
By understanding and utilizing Shopify’s fraud analysis tools, you can better protect your business from the financial and reputational damage associated with fraudulent transactions.