How to prevent chargebacks
before they reach your ratio.

Why chargebacks happen

Almost every chargeback traces back to one of three causes, and each needs a different fix:

• True fraud. Someone used a stolen card. The real cardholder disputes the charge, usually as "fraud, card absent" (Visa 10.4, Mastercard 4837).
• Confusion and friendly fraud. The customer doesn't recognize the statement descriptor, forgot a renewal, or a family member placed the order. See friendly fraud.
• Service failures. The parcel is late or lost, the product isn't as described, a refund was promised but not processed, or a subscription kept billing after a cancellation request.

A chargeback costs more than the sale. You lose the goods and shipping, and your processor charges a fee: for example, Shopify Payments charges a $15 USD chargeback fee in the United States, and Stripe's US pricing lists a $15 dispute fee plus a $15 fee to counter a dispute, which is returned if you win. Fees vary by processor and country, so check yours. Disputes also count toward card-network monitoring ratios whether you win or lose (see chargeback ratio monitoring).

The prevention playbook

1. Screen orders before you fulfill them. Review high-value first orders, mismatched billing and shipping countries, disposable emails, rapid repeat orders and orders from proxies or Tor. Holding a risky order for a day costs far less than shipping it.
2. Use 3D Secure where the risk justifies it. Authenticated transactions can shift fraud liability to the issuer in many cases (see 3DS liability shift), but they don't prevent non-fraud disputes.
3. Make your descriptor recognizable. Use the brand name customers know, plus a URL or phone number where your processor allows it. See merchant descriptor.
4. Send receipts and shipping updates. An order confirmation, a shipping email with tracking and a delivery notice give customers a reason to contact you instead of their bank.
5. Make support and refunds easy to reach. A visible contact link, fast replies and a fair refund path turn would-be disputes into refunds, which carry no chargeback fee.
6. Prove delivery. Use tracked shipping, and require a signature on high-value orders. See item not received disputes.
7. Show your policies at checkout. Return, refund and cancellation terms the customer saw before paying are evidence later.
8. Follow subscription rules. If you bill on a schedule, get express consent, send reminders and offer easy online cancellation. See subscription chargebacks.
9. Act on early fraud warnings. An early fraud warning is an issuer's fraud report that often precedes a chargeback. Refunding an unfulfilled order at that point avoids the dispute and its fee. Stripe notes that Visa still counts the fraud report itself in its VAMP ratio, so prevention before payment matters more than refunds after it.
10. Track your ratio every month. Watch disputes and fraud per processor so a bad week never becomes a monitoring-program letter.

Fight the chargebacks you can't prevent

Prevention lowers volume; it doesn't reach zero. When a dispute arrives, respond to the winnable ones with evidence matched to the reason code (see the chargeback reason codes library) and accept the ones you can't support. A clear loss you accept quickly costs less than a weak response.

How Verdikx helps

Verdikx is a fraud, chargeback and dispute platform for e-commerce and SaaS merchants, built by Verdikx LLC (New Jersey, United States). It installs as a Shopify app and covers each step above:

• Order screening (Growth, $79/month). Every new Shopify order gets a 0 to 100 risk score with plain-English reasons, within a few minutes. Signals include address mismatches, order velocity, disposable emails, Shopify's own fraud analysis, IP intelligence (proxy, VPN, Tor and data-centre IPs), the storefront device pixel and the Verdikx Network. Verdicts are posted back to the order with tags and notes, and High risk orders are held before fulfillment by default (you can turn this off).
• Early fraud warnings (Growth). Stripe early fraud warnings land in one inbox and can be refunded automatically under a cap and conditions you set. Card-network alerts (Visa RDR, Mastercard Ethoca) are coming soon.
• Risk rules and holds (Pro, $199/month). Custom rules tag, note, alert or hold fulfillment automatically. Verdikx never cancels an order on its own. With order screening (Growth and up), it holds risky Shopify orders and orders from customers you block, and you decide whether to cancel. Autopilot never accepts a dispute.
• Evidence when prevention isn't enough (every plan, from Starter at $29/month). Shopify dispute evidence, delivery proof and chargebacks from any processor or bank by email or CSV.

Every plan has a 7-day free trial (billed through Shopify for Shopify stores, by card otherwise) and is a flat subscription, not a percentage of recovered chargebacks. See pricing.

What Verdikx does not do

• It does not guarantee outcomes. Banks and card networks decide disputes.
• It does not offer card-network pre-dispute alerts yet (Visa RDR and Mastercard Ethoca are coming soon).
• Screening runs on Shopify orders, and on WooCommerce (beta) orders in workspaces created on verdikx.com; fulfillment holds are Shopify-only, and other storefronts are planned.