How to deal with chargebacks Shopify? Customer disputes are a reality of accepting payments. But that doesn’t make them any less frustrating. Chargebacks are the result of a customer questioning or disputing a transaction with their issuing bank. 

The issuing bank collects evidence from the customer and categorizes the chargeback using the appropriate, card network specific and reason code.

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How Do You Handle a Chargeback?

How to win chargebacks Shopify? A chargeback occurs when a cardholder questions a transaction and asks their card issuing bank to reverse it. Also referred to as a payment dispute, it may sound like a return but it’s completely different. 

How many chargebacks are you allowed Shopify? With a return, the customer gives the goods back to the retailer and gets a refund on the money they’ve spent. With a chargeback, the banks get involved and the disputed funds are held from the business until the payment card issuer works things out and decides what to do.

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If the bank rules against the retailer, the funds are returned to the cardholder. To add insult to injury, retailers are also charged a fee by the merchant services provider to investigate and resolve the Shopify chargeback reddit. These fees usually cost a minimum of $25 per incident, and they can quickly add up. But if the bank rules in your favor, they’ll send the disputed funds back to you.

Does Shopify Protect from Chargebacks?

Chargeback meaning is a payment charge a bank reverses to its user’s debit or credit card. These occur when a customer disputes the product charges on their account statements or credit card bills. 

After the chargeback process is completed, this payment is deducted from the seller’s already-credited account and reversed to the cardholder’s account. This differs from refunds since returned payments don’t come directly from the merchant. Chargeback policy template circumvent the merchant completely.

When customers contact their banks to return their payments for purchased products, the seller takes the fall. For instance, if a shopper files a Shopify chargeback api for damaged products, the merchant might completely lose:

  • Product payment.
  • Cost of production and/or packaging.
  • Cost of shipment to the buyer.
  • The cost of transporting the damaged products back.

Card networks and banks enforce chargeback rules to protect their users against merchants who might try to take advantage of them by sending wrong, damaged, illegal or delayed products.

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How Do I Avoid Chargebacks on Shopify?

How to prevent chargebacks Shopify? A chargeback happens when a customer asks their card-issuing bank to reverse a transaction. People request chargebacks for all kinds of reasons, some sinister like friendly fraud, some because the item they bought never arrived. 

How to win chargebacks Shopify? Because it’s so easy for customers to initiate a chargeback, retailers are bound to experience a request at some point or another. It’s why chargebacks cost merchants 0.47% of their total revenue each year. 

Chargeback vs refund? So, here are some tips for how to avoid chargebacks on your Shopify:

Set up Order Tracking Workflows

When customers make purchases from your store, they deserve to get an overview of what’s happening with their packages. This can be done by allowing them to track their order workflow from packaging to shipment to delivery.

Inadequately managed order processes show operational inefficiencies on the merchant’s part. Therefore, customers need to ask questions about their product packaging, shipment or delivery duration. 

If there’s a lack of clarity on the progress of an order, customers can file chargebacks. Therefore, you should be transparent and proactive about order status and ease customers anxiety by setting up workflows that keep buyers in the loop.

Use Protective Packaging for Shipping Products

If your shipments get damaged during the shipping process, that will negatively impact your bottom line. This is because customers can file for chargebacks, and in addition, you’ll have to pay for the cost of transporting the product to the customer and back from them without profiting from the sale. This results in a loss.

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To get in front of this, use protective, damage proof materials for packaging customer orders when delivering them. This is crucial, especially if you’re transporting or shipping fragile and breakable items. 

Deliver Products Promptly

Kount found that 45% of chargebacks are due to delivery delays. Prompt deliveries denote reliability, and not only do these increase customer satisfaction, but it also prevents chargebacks.

Certain products, food and beverages, pharmaceuticals, and chemical and medical samples have expiration dates. This is another reason to deliver products within the stipulated dates. Deliver on time, and if delays occur, make sure your buyers know this as soon as possible.

Ensure You’re PCI Compliant

Payment Card Industry (PCI) compliance is necessary to minimize chargebacks on your store. Adhering to the PCI standards means your ecommerce business guarantees the security of card information your customers provide.

Ensure your payment processors are all PCI compliant. This way, you can prevent card data theft that could incur losses to customers and cause them to request chargebacks.

Deal With a Chargeback on Shopify?

How to avoid chargebacks Shopify? Here are some tips to deal with Chargeback on your Shopify: 

Explain the Situation Clearly

Regardless of why the customer filed the Shopify chargeback percentage, your general approach should be the same. You need to explain the situation as clearly and concisely as possible. If someone filed a chargeback because they didn’t receive their package, you can provide proof of delivery or tracking information.

Furthermore, if somebody made a mistake when placing their order and is blaming you, make this clear in the response form.

Provide Relevant Evidence

If you’re using Stripe, Shopify Payments, or another third-party payment processor, they include some basic evidence alongside your own report and testimony.

This may include proof of delivery, the customer’s IP address, information about the transaction and a summary of the order.

Be Professional

Despite how angry the chargeback may make you, you always want to avoid sounding unprofessional. Our best tip is to avoid sounding critical or insulting in your responses.

Think about the reviewer. Would they want to sit and read through pages of drama?

Just provide them with the evidence and facts needed to support your position. That’s the only thing that matters and what the bank will use to make their decision.

Act Quickly

Shopify chargeback notifications payment processors will typically provide you with a specific date you need to provide the evidence by. This usually ranges from 5-10 days.

Missing the window for a response is detrimental. If you miss it, the chargeback is considered final and the bank makes a default judgment against you.

Contact the Customer

Although this tip will rarely work for fraudulent Shopify chargeback template, there is a chance the chargeback is solely because of miscommunication or confusion.

Better recommend emailing or calling the customer and seeing if you can clear up any confusion they had with their order.

Use a Chargeback Recovery Service

In this case, you can refund the payment before the Shopify chargeback api is filed in order to avoid increasing your chargeback rate.

View and Add Evidence for a Chargeback

Here the steps how to view and add evidence for a chargeback:

  • From your Shopify admin, go to Orders.
  • Click the order that’s being disputed.
  • In the chargeback banner, click Submit response.

View All Chargebacks and Inquiries

Here the steps how to view all chargebacks and inquiries:

  • From your Shopify admin, go to Orders.
  • Click Filter orders.
  • From the Select a filter drop-down menu, select Chargeback and inquiry status.
  • From the Select a value drop-down menu, select open.
  • Click Add filter.

Chargeback Status

The status of a chargeback or inquiry explains which part of the process it’s in. A chargeback or inquiry can be in one of the following states:

  • open: Shopify hasn’t sent the response yet. You can still add evidence to the response.
  • submitted: The credit card company is reviewing the evidence and making a decision about the chargeback or inquiry.
  • won: You won the chargeback.
  • lost: You lost the chargeback.

Chargeback Responses

You have the best chance of recovering Shopify chargeback lost sales from chargebacks when you use chargeback responses compiled by Shopify for each affected order. You can add additional evidence directly from Shopify, and then Shopify sends it to the credit card company.


All in all, successful Shopify chargeback recoveries consist of being level headed and professional.

By providing the evidence that checks off all the boxes the bank is looking for, you have much better odds of winning the chargeback.

The overall goal is to lower your chargeback rate. A good chargeback rate is anything below 1%. If your chargeback rate is over 1%, you can potentially be penalized by your payment processor.

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