Fraud guide
Ecommerce fraud guide for Shopify stores
Fraud on a Shopify store rarely looks like fraud at first. It looks like a normal order, a keen repeat customer or a big sale, and the bill arrives weeks later as a chargeback or as your stock on someone else's Amazon listing. Here is each common type in plain English: what it is, the warning signs, what you can do for free, and what an app can and can't do about it.
Stolen credit cards
Stolen credit card fraud is when someone pays on your store with a card number that isn't theirs. The order looks normal until the real cardholder disputes the charge weeks later, and you lose the product, the payment and a chargeback fee on top.
How to spot and stop it →
Amazon and eBay resellers
A reseller ring is one person, or a small group, placing many orders on your store under different names, emails and cards to get around purchase limits, then reselling the stock on Amazon, eBay or other marketplaces at a markup or below your price. The giveaway is the address: many different identities shipping to the same house, warehouse or prep center.
How to spot and stop it →
Triangulation fraud
Triangulation fraud is a three-party scam. A fraudster lists your products cheaply on a fake store or a marketplace, takes a real shopper's payment, then orders the item from your store with a stolen card and ships it to that shopper. The shopper is happy, the fraudster keeps their money, and you get the chargeback when the card's owner disputes it.
How to spot and stop it →
Look-alike identities
Look-alike fraud is when someone you already blocked comes back with a tiny change: jane.doe1@ instead of jane.doe@, Jon Smyth instead of John Smith, or 123 Main Stret instead of 123 Main Street. Exact-match blocklists miss these, so the same person keeps ordering.
How to spot and stop it →
Repeat offenders and serial chargebackers
A repeat offender is a customer who has already cost you money, through a chargeback, a false 'item not received' claim or a stolen card, and orders again. Without a system that remembers them, they get the same treatment as a first-time customer.
How to spot and stop it →
Friendly fraud
Friendly fraud is a chargeback filed by a real customer, not a criminal: someone who forgot to cancel a subscription, didn't recognize your store's name on their statement, or went to their bank instead of asking you for a refund. It costs you the same as criminal fraud (the payment plus a chargeback fee), but the fix is different.
How to spot and stop it →
Promo and discount abuse
Promo abuse is one person claiming a one-per-customer offer again and again, like a first-order discount, a free gift or a referral credit, by using new emails or names for each order. The accounts look different, but the orders usually ship to the same address.
How to spot and stop it →
Reshippers and drop addresses
A reshipper or drop address is a place that receives goods for someone else and sends them on. Fraudsters and resellers use them to hide where stolen-card or bulk orders really go. Legitimate forwarders exist too, so the address alone isn't proof.
How to spot and stop it →