Managing Fraudulent Orders as Part of Your Shopify Website Management

Fraudulent orders can disrupt your cash flow, waste your valuable time, and cause a whole lot of unnecessary stress when it comes to Shopify website management. It may not happen very often, but when you have been running an eCommerce website for a period of time, you will eventually receive a fraudulent order. It really is a case of when, not if.

There are a couple of ways you will normally discover this. The most annoying is when a customer submits a fraudulent transaction dispute directly with their bank AFTER they have received their order. In our experience, the banks generally find in favour of the customer, meaning you are out of pocket for both the revenue and the product you shipped them. The other way is when your payment provider (like Shopify Payments) flags the order as fraudulent as the customer attempts to place it.

At Site Unicorn, we run our own eCommerce stores, so we know exactly what it is like to deal with this frustration. Proper Shopify website management gives you a process to investigate each flag without slowing down your genuine sales, making your life easier, not harder.

What Is Shopify Checking When it Comes to Fraud Risk?

Because Shopify stores have their checkouts managed by Shopify, there are lots of data points the platform can use to check the validity of orders placed on your online store. Shopify evaluates a variety of factors when it assesses the risk level of an order, including:

• Does the IP address of the person placing the order match the general location of their shipping address?

• Is the IP address for a web hosting company?

• Is the IP address a proxy service IP address?

• The customer's payment details, checking the Address Verification System (AVS) and if the correct Card Verification Value (CVV) was entered.

• Any mismatches between the shipping address and the billing address details for the customer.

• Behaviour patterns for any unusual activity (e.g., is the customer making a really unusual high-value order, or have they had multiple failed payment attempts or chargebacks previously?).

If you are using Shopify Payments, an order will be flagged with one of three possible risk ratings: Low Risk, Medium Risk, or High Risk. Does that make sense so far? Now, let us break down exactly how to best handle each flag.

How to Manage Flagged Orders

When Shopify Flags Your Order as Low Risk

This will be the norm for the majority of your online store's orders. This means Shopify has found no indication of fraud, and you are pretty safe to fulfil the order as per normal. When we manage our own online stores, we fulfil all of these orders flagged as low risk without thinking twice about them.

When Shopify Flags Your Order as Medium Risk

This is a little flag that you will normally see as “orange” or “yellow” next to the order status on your order page in Shopify. We recommend managing these with diligent checking, as there is likely a mismatch between the customer's billing and shipping address or other data.

• Check their history: See if the customer has ordered from you before without any suspicious behaviour like chargebacks. If you have had good experiences with them previously, you can most likely send the order.

• Pick up the phone: Call the phone number to check that a real person answers, and ask relevant questions to determine if they really placed the order.

• Do a little digging: Do a quick Google search of their email address to see if it has been linked to fraudulent transactions elsewhere, or do a subtle search on social media to verify they are a real human being.

Use these indicators to decide if you are safe to send the order or better off cancelling and refunding it. Always trust your gut!

When Shopify Flags Your Order as High Risk

Our rule of thumb here is simple: it doesn’t matter how big or small the value of the order is, cancel and refund the order immediately. Do not hesitate. You are far better off dealing with a slightly cranky customer if it was a legitimate order than running the risk of losing both your revenue and your product.

Security Practices That Reduce Fraud Risk

Website management is the practice of maintaining and updating your website over time. Security is one of the core elements of this. While no system can prevent every fraudulent attempt, strong security practices make your store a harder target.

The three most important security practices are maintaining SSL certificates (which Shopify does automatically), regular site backups, and regular updates. You should also ensure your theme and apps are kept current to ensure you have the latest security patches.

When to Outsource Fraud and Website Management

Did you know that most stores see less than 10% of their total order volume flagged as medium or high risk? However, this can spike when you have a big promotion running or are sending lots of traffic to your site via paid advertising.

If you find yourself spending more than two hours a week checking orders, updating products, or fixing technical issues, it is a clear sign it might be time to outsource some of your Shopify management work.

This is exactly where we step in! We offer fixed-price packages for Shopify builds, migrations, and ongoing website management to remove the overwhelm, and freeing you up to run the parts of your online store you enjoy. By handing over the daily technical monitoring and security checks to our friendly team, you can focus on growing your business. We also offer profitable Google and Meta Ads management for a small number of boutique clients, ensuring your paid traffic is highly targeted and managed safely.

Frequently Asked Questions

What should I do first when I see a flagged order?

Start by reviewing the order details and the fraud indicators Shopify provides. Check the shipping address, billing information, and the customer's previous order history. If anything looks out of place, contact the customer before making a decision.

Can Shopify management services handle fraud for me?

Yes! Many agencies (including us!) include order processing and security monitoring as part of their Shopify management services. We can review flagged orders on your behalf and follow your preferred procedures, saving you time and stress.

How do SSL certificates help prevent fraud?

SSL certificates encrypt the data sent between your store and your customers, protecting sensitive information like credit card numbers. They also build trust by showing customers your site is secure, which is one of the most important security practices for any online store. Shopify maintains your SSL certificate for you so you don’t have to worry about it!

Is it better to cancel a suspicious order or fulfil it?

It depends entirely on the evidence. If the order is High Risk, cancelling is always safer. If it has minor inconsistencies (Medium Risk), contacting the customer first is the wisest move.

If you are ever feeling stuck or overwhelmed with your Shopify store or your paid ads, just reach out to us. We are your biggest cheerleaders and we are always here to help!