Preventing chargebacks and inquiries

When you let your customers use credit cards on your store, there is a chance of getting chargebacks or inquiries. Still, you can follow some general steps to prevent chargebacks and inquiries:

  • Investigate suspicious orders before you fulfill them.
  • Make sure your contact information is easy to find on your store.
  • Respond to customers quickly if they have any problems.
  • Inform customers about your store's policies.
  • Keep your customers updated throughout the shipping process. Use online tracking and delivery confirmation if you can.

Different types of chargebacks and inquiries can also be prevented in specific ways:

Reasons for chargebacks and inquiries, and how to prevent them
Reason for the chargeback or inquiry What it means How to prevent it
Fraudulent The customer didn’t authorize the charge. This is the most common reason for a chargeback and can happen if the card was lost or stolen.
  • Make sure your billing statement text is easily recognizable to your customers. You should use your store's name or domain name, so that the customer can recognize it on their credit card bill. If you're using Shopify Payments, then you can set the billing statement text from the Shopify admin.
  • Send receipts upon payment to remind your customers what they paid for.
  • If you ship physical goods to the United States, the United Kingdom, or Canada, then consider only shipping products to orders that pass an AVS check. You could also contact the customer before shipping to an address that doesn’t pass an AVS check.
Unrecognized The customer doesn’t recognize the merchant name or location on the card statement. Respond to this in the same way that you would to a fraudulent code.
  • Make sure to set the billing statement that appears on your customer's credit card bill. You should set it to your store's name or domain so the customer can remember what the purchase was for. If you're using Shopify Payments, then you can set the billing statement text from the Shopify admin.
Duplicate You charged twice for the same product.
  • If a double charge happens accidentally, then refund the second charge right away and contact your customer to let them know what happened.
Subscription canceled According to the customer, you charged for a subscription after it should have been canceled. It can also mean that the customer expected a reminder before each recurring charge but didn’t receive one.
  • Cancel your customer's subscriptions right away when they ask, and provide them with a confirmation of the cancellation.
  • Make it clear on your sign-up page that your customers are agreeing to a recurring charge, and that you send them a reminder before each charge.
  • Add a subscription cancellation policy on your store.
Product not received A customer claims that they didn't receive the goods or services purchased.
  • Ship products as soon as possible after you collect payment for an order.
  • Estimate shipping and delivery dates as accurately as you can, or provide your customer with tracking information from the shipping company.
  • If shipping is delayed, then contact your customer and let them know what's happening with their order.
Product unacceptable The product was received but was defective, damaged, or not as described.
  • Make sure the pictures and descriptions of your products or services are clear and accurate.
  • If you’re shipping physical goods, then make sure that you pack and ship your products in a way that protects them from being damaged in transit.
  • Respond quickly to your customers and replace defective or damaged products.
Credit not processed The customer informed you that the purchased product was returned or that the transaction with you was canceled, but you have not yet refunded or credited the customer.
  • Have a clear return policy, and make it easy to find on your store.
  • Make sure you give refunds as soon as possible.
General This type of chargeback, unlike the majority of chargebacks, doesn’t fall under one of the specific categories described.
  • The suggestions given for the other chargeback reasons can still be helpful.

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