Fraud or Not? How To Tell If A High-Risk Shopify Order Is Fraudulent

Eddy Chung

Fraud hurts your business.

Here are some ways to tell if that high-risk order is fraudulent:

  • Call the customer
  • Email the customer
  • Verify the IP address
  • Check the billing and shipping address
  • Use built-in fraud analysis
  • Verify their identity

Call The Customer

This is the most effective way to tell if the order is fraudulent.

If there’s a phone number attached to the order, give the customer a call. Remember to be friendly – as this could be a legitimate order!

Thank the customer for their order and tell them that this is a courtesy call to confirm the order details and the shipping address.

Here’s a simple script you could use:

Hi, this is Eddy calling from WidgetCompany about your order placed on January 1, 2020.

I’m just calling to confirm your order and your shipping address. Thanks for being a valued customer 🙂

If they’re aware of the order and verify the details (items ordered & shipping address) then the order is likely legitimate. This is a great chance for you to upsell or let your customer know of any upcoming sales.

If the customer is unaware of the order and cannot verify any of the details, it is likely a fraudulent order. Fraudsters are unlikely to pick up the phone as well. It is a lot harder to lie on the phone.

Email The Customer

Let’s face it, lots of calls go straight to voice mails these days. Thanks robo-callers…

If you’re unable to get the customer on the phone, email is your next best option.

You can send a similar email to your customer asking to verify their order and shipping address. If the customer verifies their shipping address via email, this could help your case in the event of a charge back.

Be on the lookout for anything suspicious in their response email. You can also use a plugin like Streaks to track the location they opened their email from. If it’s from a different country than they ordered from, it could be fraudulent (or they could be on vacation!)

Be sure to use an eye-catching headline like [ACTION Required] or [Order Update]. I would try at least 3 times to get a response before giving up.

If after 3 emails and you still don’t receive a response, it’s probably a fraudulent order.

Verify The IP Address

In Shopify, all the IP addresses of your customers are logged. You can use these websites to look up the general location of your customers.

If the country of their IP doesn’t match their billing or shipping address – be careful! This order could be fraudulent.

You can also search their IP in google (just put quotes around it like “123.123.123.123”) and see if it’s linked to anything suspicious. Most legitimate IP searches will result in finding the internet service provider – like Comcast in the United States.

If the IP address is linked to a proxy service or a web hosting company – it’s probably fraudulent.

Check The Billing & Shipping Addresses

Are there multiple orders using different billing addresses but the same shipping address? This is likely fraudulent. The fraudster has probably stolen a bunch of credit cards.

Note that legitimate orders can have different billing and shipping addresses, some people like to send their packages to their work office or it could be a gift.

Built-In Fraud Analysis

If you’re using Shopify Payments or on a Shopify plan or higher, there should be built-in fraud recommendations with each order.

If the order has a medium risk or higher I would contact the customer before fulfilling.

For those high risk orders, I recommend verifying their identity.

Verify Their Identity

If something feels off or it’s a high risk order I would verify their identity before fulfilling.

Ask the customer to email you a selfie with them holding their ID such as a driver’s license. If they’re not comfortable with that, a utility bill with their billing or shipping address is an alternative.