What is double-dip fraud?

Double-dip fraud occurs when a customer both returns an item for a refund AND files a chargeback on the same order, attempting to get paid twice. Detection requires correlating return data with chargeback data, which RefundSentry does automatically.

Can you predict chargebacks before they happen?

Yes. Pre-ship order scoring can identify orders likely to result in chargebacks by analyzing customer history, behavioral patterns, and risk signals before fulfillment. RefundSentry scores orders at creation and can hold fulfillment on high-risk orders to prevent chargeback losses.

What is the average chargeback rate for Shopify stores?

The average chargeback rate for e-commerce is 0.5-1% of transactions. However, stores in high-risk categories (electronics, fashion, digital goods) can see rates of 1-3%. Exceeding 1% of transactions can trigger monitoring programs from payment processors.

Shopify Chargeback Prevention: How to Predict and Prevent Disputes

What are Chargebacks?

A chargeback occurs when a customer disputes a credit card charge directly with their bank. The merchant loses the sale amount, pays a chargeback fee ($15-100), and may face account penalties if the dispute rate exceeds processor thresholds.

Why Chargebacks are Costly for Shopify Merchants

Beyond the refund amount, each chargeback costs:

Chargeback fee: $15-100 per dispute depending on payment processor
Lost product: The item is typically not recoverable
Shipping costs: Already incurred and non-refundable
Time cost: Hours spent on evidence gathering and dispute response
Threshold penalties: Exceeding 1% can trigger monitoring programs or account termination

Pre-Ship Chargeback Prediction

The most effective chargeback prevention happens before you ship. Pre-ship scoring evaluates risk signals at order creation:

Customer's prior chargeback history
Billing/shipping address mismatches
Disposable email addresses
High-risk product categories
First-time customer ordering high-value items
Velocity anomalies (many orders in short timeframes)

Orders flagged as high-risk can be held for manual review before fulfillment, preventing the loss entirely.

Double-Dip Fraud Detection

Double-dip fraud is when a customer both returns an item AND files a chargeback on the same order. This is especially costly because the merchant refunds twice. Detecting it requires correlating return activity with chargeback data, something RefundSentry does automatically.

How RefundSentry Prevents Chargebacks

RefundSentry covers the full fraud lifecycle from order to dispute:

Pre-ship scoring: Identify high-risk orders before fulfillment
Fulfillment holds: Automatically pause shipping on flagged orders
Double-dip detection: Flag customers who return AND file chargebacks
Chargeback analytics: Dashboard showing total exposure, repeat offenders
Evidence reports: Auto-compile scoring history for dispute responses