Table of Contents

    How to do Fraud Analysis on Shopify?

    • September 07, 2023
    • 5 min

    If the user's information or the transaction itself triggers red flags, Shopify will label the order as high risk. For example, high-priced transactions from an unknown client, use of a credit card that has been reported stolen, use of a proxy server, or access to the Dark Web are all red flags. These are fundamental metrics that any online merchant should be acquainted with. In this post, we will understand how to do fraud analysis on Shopify.

    Working of the Shopify Fraud Analysis System

    Credit card fraud refers to the use of a stolen card to make a purchase. If you refund the correct cardholders, you may incur administrative costs or a chargeback dispute. This takes a lot of time and money, and it looks bad for the company. Furthermore, high chargeback rates will result in higher processing costs for all future transactions from card networks (Visa, Mastercard, American Express). If you file too many chargeback requests, Shopify may disable your business or restrict you from accepting Shopify payments entirely.

    In short, chargebacks are disliked by all parties. High-risk transactions need to be avoided at all costs, therefore the Fraud Analysis in Shopify accurately reflects the level of risk involved. shops not using Shopify Payments on the Basic Shopify subscription will still benefit from fraud analysis. They can also get help from external fraud detection apps. For stores on the Shopify plan or above, or for stores using Shopify Payments on any plan; there are fraud suggestions, fraud indicators, and third-party support. Let’s learn in detail.

    Fraud Analysis Indicators

    Shopify’s built-in fraud analysis features give clues for every purchase. Indicators might be utilized to further examine a suspicious order. Indicators may contain data on things like whether the customer’s credit card details or CVV code and other order data are valid. IP address details and whether or not the customer attempted to use multiple credit cards. When an order is fully analyzed, all indications are shown. Different patterns of behavior are easy to spot thanks to these green, red, and grey color indicators.

    Information regarding the valid orders is shown by green indications. Details regarding the orders that are common in fraudulent orders are shown by red indications. Additional order details are provided by grey indications, which may be of any help in fraud analysis. While indicators may suggest possibilities for further inquiry into an order, they cannot reveal the likelihood that a particular transaction is fraudulent.

    To view the fraud analysis in any order, go to Shopify Admin and select Orders. Click on the orders you want to review. Some orders that are doubtful will be in exclamatory marks. Thus, go to that order page and browse the fraud indicators. Furthermore, the Shopify app store offers many fraud-prevention apps that can be downloaded and installed on your store. It incorporates app-provided indicators and suggestions.

    Fraud Suggestions

    All online credit card orders on Shopify plans and above, or using Shopify Payments on any plan, get a fraud recommendation. If an order is suspected of being fraudulent, the fraud suggestion will indicate how likely it is to be charged back. If an order has a medium or high risk, a warning icon will appear next to the order number on the Orders page.

    Machine learning algorithms are used to enable these fraud suggestions, and they are educated on the whole of Shopify’s transaction history. The guidelines are the result of many years of work in the field of fraud detection. Shopify is always tweaking these algorithms to make it easier to spot suspicious purchases. Furthermore, the Shopify App Store offers fraud-prevention software that can be downloaded and installed on your store. Shopify’s order fraud analysis incorporates app-provided indicators and suggestions.


    Shopify’s fraud analysis is best handled with a mix of automated technologies and human inspection. You may greatly lessen the possibility of fraud orders affecting your online shop if you use better order monitoring procedures, make use of fraud protection apps, and keep up with the latest developments in the world of online fraud. Taking precautions against fraud can protect your business’ cash and keep your consumers’ faith.


    What are some common signs of fraudulent orders?
    Common signs include unusual shipping or billing addresses, large orders from new or infrequent customers, multiple orders with the same email or IP address, and frequent use of disposable email addresses.
    Are there any free fraud prevention apps available for Shopify?
    Yes, some free fraud prevention apps are available on the Shopify App Store, but they may offer limited features compared to premium options.
    What should I do if I suspect an order is fraudulent?
    If you suspect an order is fraudulent, consider contacting the customer for verification. You can also temporarily delay processing until the customer’s identity is confirmed.
    Is it possible to completely eliminate fraud on Shopify?
    While you can significantly reduce the risk of fraud, it’s nearly impossible to eliminate it entirely. Fraudsters are continually evolving their tactics, so an ongoing, multi-layered fraud prevention approach is essential.
    How often should I review orders for potential fraud?
    Review orders daily or as frequently as possible, depending on your order volume. High-risk orders should be reviewed immediately to prevent potential losses.

    To know more about hiring a
    Freelance Mobile App developer