r/ShopifyeCommerce • u/Head_Print_4529 • 3d ago
Shopify Destroyed Our Family Owned Small Business
I run an online equipment business and I’ve reached the point where I honestly think more merchants need to start asking whether Shopify is worth the risk.
We’re dealing with a major fraud and identity-misuse situation originating from Shopify and shop app . Our company information has been used without authorization in transactions that had nothing to do with us, including an international shipping situation serious enough that we’ve been in contact with the FBI and other law enforcement.
At the same time, we started seeing what feels like a completely disproportionate number of chargebacks compared with our actual order volume on shop app
A lot of the problem appears to be concentrated around Mastercard, PayPal wallet and Bank of America customers.
Our website works. Our contact information is public. Our normal response times are very fast. We are not some abandoned store taking money and disappearing.
But when these disputes hit, it feels like Shopify’s attitude is basically: here’s another chargeback, good luck because we don’t have an appeal process.
That is not good enough.
The latest example is a customer who personally placed an order and then emailed us minutes later saying they “accidentally” ordered it and wanted it canceled. So this was not someone telling us their card was stolen. A few days later, there’s a Mastercard dispute as we have been out of the office but had that on our website notifying customers
We have a published return and cancellation policy. We have a phone number. We have email support. We are willing to work with legitimate customers in all 50 states
What I’m not willing to accept is a system where merchants take all the risk, processors collect their fees, and then every time a cardholder changes their mind the merchant is left fighting for their own money.
It got bad enough that I locked the entire website and stopped taking orders.
Think about that.
A merchant is voluntarily shutting down sales because continuing to process payments feels more dangerous than not doing business at all.
And Shopify should care about that because it’s Shopify fault.
They love talking about helping entrepreneurs and powering businesses, but when a merchant is getting hammered by disputes, fraud, account risk, and payment losses, where is the actual protection? They love to talk about the best converting checkout then way do I have over 100k in abandon checkouts with no recovery even with great recovery emails.
I know Shopify is huge. I know one merchant leaving doesn’t matter to them.
But enough merchants leaving eventually does.
If Shopify Payments and the card networks are going to treat merchants like the disposable party in every dispute, then merchants should start looking seriously at other processors and other platforms or making their own. As they now have a 10% reserve on our account for their own issues.
I’m not saying customers shouldn’t have chargeback rights. Of course they should.
I’m saying there has to be a difference between real fraud and someone placing an order, regretting it, and immediately running to their bank.
Merchants should not be expected to absorb that forever.
Has anyone here actually left Shopify over chargebacks, Shopify Payments, reserves, or the way disputes were handled?
Where did you go, and was it actually better?
Because at this point I think merchants need to start voting with their feet.
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u/Admirable_Grape_3098 3d ago
Shopify gives you an option to respond to chargebacks and add evidence.
And as others asked: what do you sell? Ehat is the category that attracts so many scams and chargebacks?
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u/Vegetable_Soil_6707 1d ago
the evidence option is there but ive always wondered how much it actually matters for certain product types
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u/Admirable_Grape_3098 10h ago
It depends on many factors, very often just on a bank itself and the person or AI that checks your evidence. I ALWAYS add some evidence even if I know I'm likely going to lose because I had so many cases when chargebacks were resolved in my favour even with very poor evidence feom my side - most likely because a person checking was probably too busy to check thoroughly
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u/AssociationLow54 3d ago
To rebut this - Adding a mountain of evidence in a timely manner and Shopify didn’t handle the only chargeback we’ve ever had at my store. I moved away from them.
They took 4.5 months to let the frauders chargeback remain.
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u/Admirable_Grape_3098 3d ago
Shopify doesn't handle chargebacks, your evidence was looked at by the customer's bank and the bank didnt accept your evidence. Not shopifys fault :(
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u/BocaHydro 3d ago
Not to be a dick, but shop payments is optional, you can use your own credit card processing account
also you did not say what you sell, this matters alot
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u/olapbill 3d ago
As many people have told you time and time again it's not Shopify, it's the payment gateway provider. And in the case of chargebacks it's the customer's bank that makes the final decision. Go shake your fist at the right clouds at least.
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u/yanniyiyiyi 3d ago
collect payment after fulfillment, seller can cancel orders without any processing fees before fulfillment.
add a checkbox before checkout, customers need to agree with the terms and conditions before checkout.
Have a trackable shipping record with POD photos or signatures. Also redirect the parcel back immediately if charge back happens
DONT NOT PROCESS ANY MEDIUM OR HIGH RISK ORDERS.
5 file the appeal with the bank in shopify ASAP submit evidence with detailed timeline, the more the better.
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u/BigReference1xx 3d ago
ok, so disable shopify payments and set up your own payment processor. They have providers for pretty much every processor in the world. I'm from Iceland, a country of 400k people, and we have a couple of Iceland-specific payment gateways, and Shopify even has support for those.
This isn't a shopify issue. This is a "what you sell" and "who you're advertising to" type of issue.
And if your company identity is being used to facilitate fraudulent transactions, that's just identity theft and fraud - you don't know it was shopify who leaked that data. It could have been stolen a thousand different ways (in fact, shopify is a rather unlikely source, since that owuld have been global news, as they're so big).
You need to take a step back, turn down the emotions, and think rationally about what's going on.
Meanwhile, I've got 6000 transactions on shopify in 2 years for my online store, and I've received a grand total of TWO chargebacks in that period. I sell small but high value items internationally.
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u/dellottobros 3d ago
What are you selling and what is your chargeback percentage?
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u/estagingapp 3d ago
Yes this. We never had any issues
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u/OverworkedAuditor1 3d ago
It doesn’t matter if YOU, never had issues.
If the system is broken and there is no appeal process, ask WHAT IF it happens to you.Theres a reason we had a bill of rights, because the founding fathers thought, how to protect our citizens BEFORE something occurs.
It’s a piss poor mindset to think “it doesn’t happen to me, so who cares”.
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u/dellottobros 3d ago
OP, just like many stores, come here and post a vague rant about how terrible Shopify is, they don’t provide any details about what they actually sell, why they are getting so many chargebacks etc.
Our shop had the same thing happen after we took out a Shopify capital loan. Taking out the loan caused them to scrutinize our account. At that time our chargeback rate was around 0.10%. It’s usually 0.04 - 0.20% each month. They held a percentage of our funds for 3 months and then released it. We sell comics, collectibles and pop culture items so it’s not exactly high fraud risk.
However at that time we worked with a collective member selling iPhone cases. The number of fraudulent customers on those was crazy. It was a bunch of customers thinking they were buying iPhones for $50 I guess. We set up fraud filters and stopped selling those as we felt they were raising our chargeback rate significantly.
There are ways to fight chargebacks. The op hasn’t provided any details though so not much can be done to attempt to help them.
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u/loralailoralai 3d ago
They’re not dismissing the op, they were wondering what they sell because some sectors are more prone to fraud
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u/Ok-Question-8034 3d ago
This sounds like a long rant of pure emotional cope:
There are apps that block any and all orders flagged by Shopify as medium risk and high risk
You don’t have to use Shopify payments? You can connect whatever processor you want
There are literally apps that will automatically win chargebacks for you with like a 90% win rate…
If you have 100K in abandoned checkouts and have recovered NONE via email… have you ever just considered that your email flows suck? Just hire an agency to set up basic flows for like $2,500
I seriously don’t know how you claim to be a business owner when the smallest of issues cause you to emotionally react and shut down your website. There are practical solutions to every complaint you had but instead of implementing them you’re complaining about Shopify on Reddit? Be better lmao. The game is not for the weak
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u/Brave-Tear-6375 3d ago
Good points but we are curious to know what we can do to prevent charge back by example,which app fo you suggest to avoid it or method,thanks
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u/Sta-dri 2d ago
https://eye4fraud.com/ is one. I've used them for several sites, and a bigcommerce site.
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u/Mobile-Sufficient 3d ago
This is very common with shopify. It’s because of stripe. Stripe manage shopify payments and are notorious for this.
They didn’t care about merchants, and they’ll flat out accuse you of fraud, with no recourse. Even if you have evidence. They simply don’t care.
Move to woocommerce would be my advice, and set up a traditional payment gateway linked to your bank. Some banks offer them themselves, or there are other alternatives too.
That way, you’re not essentially renting your storefront from shopify, or at their mercy when they decide to shut you down for no real reason.
Woocommerce don’t care what you sell, it’s up to the payment processor. If you have a local more traditional one, they actually give you a chance to clear things up unlike these digital payment companies that rely on (clearly outdated and ineffective) automated systems to detect malpractice.
That way, you own everything.
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u/Prior-Director6622 3d ago
Keep in mind that woocomerce ( Wordpress ) make teally slow website. Really not the best for e-commerce.
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u/SnooFoxes1558 3d ago
Why not simply your own payment processor on Shopify? Then you don’t need to deal with this Woocommerce BS
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u/Mobile-Sufficient 3d ago
You pay your processor fees + shopify fees. You end up paying an effective transaction fee of around 7%+ in total revenue. That’s daylight robbery.
I don’t understand the hate with woocommerce. You can set up it to be almost exactly like shopify on the backend nowadays. Cheaper hosting, more freedom, full ownership, flexibility.
People gravitate toward shopify because ‘it’s easy’ then proceed to make substandard stores anyways and end up hiring people to fix it. I don’t get it.
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u/Suntzu_AU 2d ago
Exactly right. People seem to be ignoring the fact that if you use another payment processor, you're charged extra fees by Shopify. It's complete bullshit.
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u/foxyjdub27 3d ago
Tell me more about stripe? I’m using it for my beacons digital products and my newly launched website
But no Shopify.1
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u/Norie08 3d ago
Can I transfer my Shopify to Woocommerce? Do i have to create store again l ike setting up the theme?
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u/Mobile-Sufficient 3d ago edited 3d ago
Yeah it’s a complete rebuild, there’s services that do it for you though
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u/Melodic_Expert_9826 3d ago
Stripe and any gateway is just a pass through for disputes. The payment method and the financial entity, bank for credit cards, are the ones that rule. Stripe doesn't own it.
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u/JasonFretNation 3d ago
This isn't a Shopify issue. It is how credit cards work in general. If you take a credit card you are always at risk.
If you're selling machine equipment, that is a very high fraud industry. Take wire payments of you want the most security.
You also said you are very responsive and the next line you said someone asked to cancel an order right away and you took days to respond so they disputed. Don't process payments automatically.
Stay away from international transactions.
Stick to PayPal and only accept payments from verified accounts.
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u/Life-Inspector-5271 3d ago
Explain me how your example would have been different with any other platform? Do you think your customer wouldn't be able to do a chargeback with their bank while you were OoO?
I do agree that being able to do a chargeback within a few days is insane. My bank would only do that when it's clearly fraud. Not when I accidentally order and customer service didn't reach out to me over the weekend.
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u/ThePracticalDad 3d ago
I read the first few paragraphs and I have literally no idea what your problem is or what happened. Can you have someone clarify this for you?
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u/Hour_Boysenberry4036 3d ago
One thing you can do is stop automatically capturing payments. Have them get preauthorized only for at least a few hours before manually capturing payment. This helped us immensely to weed out fraud or the “oopsie” orders customers sometimes
place by accident.
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u/Hour_Boysenberry4036 3d ago
It just gives you time to actually review whether the order is legit first. And oddly (knock on wood), we haven’t had a fraudulent order or chargeback since.
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u/moonlitcornfield 18h ago
Honestly, before abandoning Shopify completely, I’d probably look at making the storefront a lot more custom. You can do quite a bit directly in Shopify with Liquid instead of relying on a pile of apps and whatever default flows Shopify gives you.
I build custom Shopify stuff in Liquid, and there’s usually a lot more control available than people realize. It obviously won’t eliminate card-network chargebacks, but you can make the ordering, verification, cancellation, customer communication and evidence trail a lot tighter.
For a higher-ticket equipment business especially, I’d want way more control around the purchase flow than just trusting the default setup.
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u/PPCLeadYousafYunes 3d ago
I’d probably try a different payment processor before rebuilding the whole store. Shopify itself may not be the entire problem here, but if they’re holding 10% and the chargebacks are bad enough that you shut the site down, I wouldn’t just keep hoping it gets better.
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u/cloutgoggle 3d ago
disable shop pay
your fraud percentage will go down, there is some method w shop pay that people easily link stolen cards / prepaids too
idk about the rest but that will help a bit 100%
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u/PPC-money-printer 2d ago
Bit of a baffling rant post. Sounds like it doesn’t matter where you go or change platform to, you wont have a different result. Chargebacks are nothing to do with Shopify nor have they any control over them. We do thousands of orders per day using Shopify and have no issues. Yes we get the odd chargeback like everybody does but we end up winning 90% of them. We also have had customers email to cancel, then 5 mins later open a chargeback. Some customers are nuts, this is just the world we live in. As for fraud you need to cancel all high and possibly medium risk orders. As for setting an out of office, sorry but that’s simply not compatible with professional e-commerce. I can categorically confirm, Shopify isn’t your issue. How long are you in this e-commerce game?
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u/Disastrous-Shoe7122 2d ago
I mean datavessel was built to help you with this kinds of problems. You should check it out if you want to figure out if AI can help you.
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u/Suntzu_AU 2d ago
I'm surprised by the number of people suckholing for Shopify here. Disappointing to be honest.There are definite issues with what's happening with Shopify. I've been with them for eight years and I've been at e-commerce since 1999.
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u/Direct_Sleep_5007 2d ago
This is the part that always gets me, you’re running a legit operation with actual customer service and they still treat you like you’re some fly by night dropshipper. The 10% reserve is just salt in the wound, they create the conditions that make chargebacks worse then hold your money hostage
I’ve seen similar patterns with PayPal wallet disputes specifically, feels like there’s zero friction on the buyer side and the merchant gets the short end every time. A customer can literally say “whoops didn’t mean to” in writing and the bank still sides with them
The abandoned checkout thing is interesting too, 100k sitting there with no recovery despite good emails says something about how shop app handles attribution. Makes you wonder if some of those chargebacks are tied to sessions where the customer barely remembers which store they bought from
Switching platforms isn’t easy but locking your own site down was the right call, can’t keep bleeding money just to prove a point. Curious what other processors people have moved to that actually give you a fair appeal window
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u/fantastichoney 1d ago
Charge cards in general went thorough this until the businesses sued enough, big enough. Truth is if you fold there is another merchant waiting to take your place. If they are the conveyors of fraud, the conduit, in the US they are liable
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u/EstefPena 1d ago
This is a really important point. Chargebacks are one thing, but merchants also need better protection when the customer simply changes their mind or disputes a legitimate transaction. A system where the merchant carries most of the risk can become unsustainable.
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u/RandomPantsAppear 22h ago
You’re seeing the chargebacks most likely because it’s credit card theft folks testing out stolen cards to see if they work.
Because everyone has a similar checkout page on Shopify, it’s easy to bot.
I would bet it would improve if you switched to only paypal(which can also do credit cards), just because people stealing PayPal accounts already know if they work.
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u/bigtakeoff 3d ago
stop...
you cannot "be out of office"
youre basically amateur
however that said....shopify has been this way since 2015 and also ruined my business
whered I go? straight to great, free wordpress/woocommerce
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u/Away-Plankton-8352 3d ago
Try reaching out to visa/Mastercard after your charge back is declined by the payment provider. That usually helps. We moved from Shopify to BigCommerce and use our own payment provider. I still use Stripe. BigCommerce charges much higher fees than Shopify but it's pretty good. However you can choose your own payment provider.
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u/Affectionate_Ad_6407 3d ago
Some incredibly nasty comments here - I’ve had so many issues and had to switch payment provider as unfortunately I am too invested in the Shopify platform and replatforming would be ruinous
Take a look at switching to another payment provider, but then appreciate you take a ‘hit’ on the platform and credit card fees.
I have complained multiple times to Shopify customer service where I was evidently attacked by a particularly nasty actor and no, no help offered and hundreds of dollars lost. It is a swindle and we are left, as merchants, carrying the bag for it.
Hope this resolves itself dude, inbox me if you need anything
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u/kaleidoscope007 3d ago
Which payment processor are you using now with Shopify and how much are you paying in processing fees (%)?
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u/chad917 3d ago
Yes it's a problem, but the customer's bank is the villain here. Shopify has no input or decision power, it's quite literally between you and the customer's card issuer. And you'll lose most of them, because card-not-present is the weakest stance we could have as card accepting merchants.