If you run an online store, orders resulting from fraudulent credit card use and chargebacks—where the sales proceeds are later reversed—are problems you can't fully avoid. When this happens, you risk losing not only the sales revenue but also the shipped merchandise, and checking and responding to these cases takes considerable effort.
This is where Shopify's fraud prevention app, "Fraud Control," comes in handy. It can be used to review data on fraudulent orders, block checkouts that match conditions you've set, and automate responses to high-risk orders using Shopify Flow.
This article clearly explains Fraud Control's features, benefits, and the precautions to keep in mind when using it.
What Is Fraud Control?
Image source: Fraud Control | Shopify App Store
Fraud Control is a free fraud prevention app provided by Shopify. In addition to letting you check the status of fraudulent orders on a dashboard, it can be used to block checkouts that match conditions you've set and to automate responses to high-risk orders using Shopify Flow.
That said, it doesn't prevent or compensate for every fraudulent order or chargeback—it's positioned as a tool for understanding risk and making your countermeasures more efficient.
Fraud Control's Main Features and Capabilities
Fraud Control's features can be broadly divided into the following three categories.
A Dashboard for Understanding Fraud Risk
Fraud Control lets you check your store's fraud-related status on a dashboard. For example, "Acceptance rate" refers to the percentage of orders, within the period you select, that Shopify's fraud analysis rated as "low" or "medium" risk.
You can also check high-risk orders and orders canceled due to fraud, and if you use Shopify Payments, chargeback-related data is also displayed. These metrics make it easier to track changes in your store's risk over time.
Blocking with Checkout Rules
Using checkout rules, you can block checkouts that match conditions you've set before they're confirmed as orders. Conditions can include email address, address attributes, IP address, and more, and multiple conditions can be combined.
Keep in mind that the basis for blocking is strictly the conditions you've configured—it isn't a mechanism where Shopify judges fraud risk and automatically stops a checkout. Checkout rules are only available to merchants using Shopify Payments.
Automation with Shopify Flow
Combining it with Shopify Flow lets you automate your response to fraudulent orders. For example, the following templates are available from Fraud Control's screen.
- Cancel high-risk orders and restock inventory
- Capture payment when the fraud risk is not high
- Cancel orders from known bad email addresses
- Limit orders from a customer to 5 per day
Because risk assessment happens after an order is created, these actions run only after fraud analysis is complete—this is what differentiates them from checkout rules. Note that if you want Shopify Flow to control whether payment is captured, you need to set credit card payments to manual capture in advance.
For more details on Shopify Flow, please see the article below.
Benefits of Adopting Fraud Control on Shopify
Here are the benefits you gain by adopting Fraud Control for your store.
Reduces Financial Losses from Fraudulent Orders
By blocking checkouts that match your configured conditions and automating responses to high-risk orders with Shopify Flow, it becomes easier to reduce the risk of losses from chargebacks and similar issues.
If you ship a product without noticing that the order is fraudulent, you can't recover the payment and you lose the inventory as well. Being able to lower this risk is a major benefit.
Reduces the Effort Involved in Handling Fraudulent Orders
Manually reviewing suspected fraudulent orders one by one takes both time and the burden of judgment calls. Fraud Control lets you automate part of that response through rules and Shopify Flow, easing the burden of the review process.
That said, automation doesn't take care of everything—checking an order's risk before shipping remains important.
Lets You Understand Your Store's Fraud Risk Through Data
Metrics such as the acceptance rate and the proportion of high-risk orders let you check your store's status numerically. Rather than relying on intuition alone, you can adjust checkout rules and review your countermeasures based on data.
Can Be Adopted Without Any Monthly Fee
Because Fraud Control is free to use, you can adopt it for fraud prevention without taking on any new monthly cost. We recommend first understanding your store's risk situation, then setting up checkout rules and Shopify Flow as needed. Shopify Flow is also available free of charge, with no monthly fee.
Precautions When Using Fraud Control
Let's also cover the precautions to keep in mind when using Fraud Control.
It Doesn't Prevent Every Fraudulent Order or Chargeback
Fraud Control doesn't prevent every fraudulent order or chargeback, and it's not a service that compensates for losses either. Checkout rules can only block checkouts that match the conditions you've configured, and they can't automatically predict and stop fraudulent orders that fall outside those conditions.
Think of it not as a complete solution but as a way to lower your risk of loss, and be sure to check an order's risk before shipping when needed.
It May Also Block Legitimate Orders
If you set your rules too strictly, you risk stopping orders from legitimate customers as well, causing you to miss sales opportunities. Fraud prevention and sales are two sides of the same coin, so rather than setting it up once and leaving it, you need to keep monitoring blocked checkouts and adjusting your conditions over time.
Some Features Require Shopify Payments
Fraud Control is available on all store plans in regions where Shopify Payments is supported. Stores that don't use Shopify Payments as their payment method can still use the app itself, but some features, such as checkout rules, aren't available.
In addition, the data available on the dashboard is limited to items such as "Acceptance rate," "High-risk orders," and "Orders canceled due to fraud."
Start Preventing Fraud with Fraud Control
Fraud Control is Shopify's official free app that lets you review data on fraudulent orders, block checkouts that match conditions you've set, and automate responses to high-risk orders using Shopify Flow.
While it doesn't prevent or compensate for every fraudulent order or chargeback, it can be one useful way to understand your store's risk and streamline your countermeasures. Because the features available depend on whether you use Shopify Payments, be sure to also check your payment settings before adopting it.
