The Complete Shopify Fraud Prevention Guide for 2025

# Introduction

Fraud is costing Shopify merchants thousands in chargebacks every month. The average fraudulent order results in €2,000+ in losses when you factor in the lost product, chargeback fees, and time spent dealing with the dispute.

In this guide, I'll show you the 10 fraud patterns to watch for and how to prevent chargebacks before they happen.

The 10 Fraud Patterns

1. Mismatched Billing & Shipping Addresses

Fraudsters often use stolen credit cards with billing addresses they don't control. Watch for:

- Billing address in one country, shipping to another - PO Box shipping addresses (common for card testing) - Shipping to freight forwarders or reshipping services

**Red flag example:** - Billing: New York, USA - Shipping: Lagos, Nigeria - Payment method: Credit card

**Action:** Flag for manual review or require address verification.

2. High-Value First Orders

New customers placing unusually large orders should always be reviewed manually.

**Red flag example:** - First-time customer orders 10 iPhones - No prior browsing history - Checkout completed in under 60 seconds

**Action:** Contact customer to verify order before fulfillment.

3. Rapid-Fire Orders From Same IP

This is card testing in action. Fraudsters are testing stolen cards to see which ones work.

**Red flag example:** - 5 orders in 10 minutes - Same credit card - All different "customers"

**Action:** Block the IP immediately and cancel all orders.

Preventing Chargebacks

Use Address Verification Service (AVS)

Decline orders where the billing address doesn't match the card. Shopify Payments includes AVS by default.

**How to enable:** Shopify Settings → Payments → Fraud Analysis → AVS Mismatch = High Risk

Require CVV Verification

Card Verification Value (3-4 digit code on back) is often missing from stolen cards.

Set Order Velocity Limits

Prevent card testing attacks by limiting orders per IP and per card.

**Example rule:** - Max 2 orders per IP per hour - Max 3 orders per card per 24 hours

Conclusion

Fraud prevention doesn't have to be complicated. By watching for these 10 patterns and implementing basic verification steps, you can prevent most chargebacks before they happen.

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