Scammers Claiming Order Not Delivered? Here's How to Handle It

TL;DR: Order not delivered is the leading friendly fraud strategy today. You can prevent such issues by using reliable delivery services, setting clear expectations, requiring signature confirmation, keeping detailed records, responding quickly to complaints, offering fraud protection services, and automating your chargebacks to pre-empt dispute losses.

First, here's a case study.

Alison writes in the Shopify community:

"I have had a few customers saying they didn’t get their package even though USPS says delivered. I have one customer threatening chargeback. I have never won a chargeback appeal. Should I just refund them, or is it a scam? Has anyone ever won a chargeback?? What was the chargeback fee??"

There are many Shopify merchants like Alison.

They're doing the very best to serve their clientele and secure some of the dividends of online selling. But scammers are muscling them around with false chargebacks or dispute threats.

If you're currently facing that dilemma, this article is for you. We'll share some practical measures and steps to help you turn the table around and secure your sales.

Let's dig in.

How to Avoid Item Not Delivered Shopify Scam

First, you must understand that scammers constantly look for loopholes in your business.

It might be in your order checkout or fulfillment strategies, customer relationship systems, or data management processes. When they find any gap, they'll milk it until you either run out of money or get kicked out of Shopify.

Take these steps to pre-empt losses arising from order delivery and preserve your goodwill with customers.

Step #1: Remove Uncertainty With Delivery Confirmation and Order Tracking

While this might make little difference if you're like Alison because she already obtained delivery confirmation from USPS, using order tracking and receiving delivery confirmation are standard industry practices.

With such proactive measures, you have a package delivery record and the address as proof of delivery. That forces the customer to refrain from coming at you with false claims of non-delivery when they have buyer's remorse or overspend in the process.

Step #2: Provide Sustainable Delivery Timelines

From inventory management and demand planning to logistics planning and supply chain execution, order fulfillment is a crucial aspect of the eCommerce business. And in these times of sky-high customer expectations, it can be tempting to set unsustainable delivery schedules to meet up with the competition.

Please don't fall for that. Also, notify your customer if there are any delivery delays or hiccups.  

Practical steps for improving order delivery:

1. Outsource shipping to specialist last-mile delivery companies to make the process faster and more professional.
2. Automate order fulfillment. This process makes sense if your sales do not require packing, you have high order volumes to process quickly, and you do not have any items available for pre-order.

Of course, all that will not make much sense if you don't use a reputable carrier. Some recommended shipment providers include ShipBob, ShipStation, Red Stag Fulfillment, and ShipMonk.

Step #3: Require Delivery to a Confirmed Address

By requiring shipment to a guaranteed address, you can be sure you're not sending your goods to the wrong recipient and reduce the likelihood of false claims of non-delivery.

To require delivery to a confirmed address, ask customers to verify their address or add AVS and other third-party address verification systems at order checkout.

The rule of thumb is to double-check that the delivery address matches the billing address for the credit card used to purchase. That reduces the likelihood of fraudulent orders and false claims of non-delivery.

You could also insist on shipping to a physical address, not a P.O. box or commercial mailbox. That way, a scammer can't steal or intercept the order and hit you with false claims of non-delivery.

Step #4: Use Package Insurance

Another successful method for Shopify merchants to defend themselves against package delivery fraud is to use package insurance.

Package insurance offers financial protection if a shipment is misplaced, stolen, or harmed in transit. Remember: You are responsible for the package containing the buyer's product until it gets to the buyer.

The costs can vary depending on the value of the item and the amount of coverage chosen.

But package insurance protects against package delivery fraud and monetary losses. You can use package insurance to dispute a chargeback if a consumer alleges a package was not delivered or damaged in transit.

Step #5: Monitor Delivery Status

Alison did her due diligence here, so this is a general rule of thumb. By regularly monitoring the delivery status of packages, you can quickly identify any issues or delays and take appropriate remediation action.

The shipping carrier's tracking number gives you each box's delivery status. Your customer can also get the progress of each package and receive updates on any delivery issues or delays with the same code.

By proactively monitoring the delivery status of an order, you reduce the likelihood of false claims of non-delivery and ensure timely package delivery.

Step #6. Train Your Team to Recognize Package Delivery Scams

Industry data shows that order not received is the top strategy scammers use to commit friendly fraud today. More specifically, 32% of friendly fraud cases use order not received as a cover, 25% are order damaged or defective, and 22% claim the order was not as described (22%).

Employees managing shipping and delivery processes or answering customer support questions must have the training to spot common indications of package delivery scams and respond appropriately.

Train your team to spot the common symptoms of package delivery fraud, such as the following:

• Odd shipping requests. Erratic or suspicious shipping requests, like those for expedited delivery or shipments to addresses other than the ones used for invoicing, are a red flag.
• Strange shipping addresses. Confirm unknown mailing addresses by talking with the customer before shipping the goods.
• Unusual payment methods. Be wary of buyers preferring to pay with unconventional payment methods or asking to use an unknown third-party payment service. Such payment methods can be difficult to reverse if the transaction is fraudulent.
• Unusual purchase patterns. Abnormal purchase patterns or multiple failed transactions are often a sign the customer is using stolen credit card information to place orders.

Educating your staff on how to spot the typical warning signs of package delivery scams and what to do in response helps you pre-empt order delivery fraud.

Step #7: Document Everything

Another helpful tactic for safeguarding against order delivery fraud on Shopify is keeping detailed shipments and delivery records.

Consider keeping track of the following vital details:

• Shipping details, including the shipping company, tracking number, and anticipated delivery date.
• Delivery information like the delivery address, contact details, and delivery confirmation.
• Customer correspondence, including emails, phone calls, chat logs, and Social Media comments showing they received the order.

These documents are compelling evidence to refute false shipping and delivery-related chargebacks.

If you've done your hard work and the scammer still manages to slap you with a dispute, use the following tips to fight back.

How to Fight Back When Buyers File False Item Not Received Shopify Chargebacks

As intimated in step six above, Alison is not the only one having scammers bullying her into refunding a transaction they received.

Here’s another case study from Claribellas:

“I have a customer who says they didn't receive their package even tho USPS says it was delivered. I called the post office that did the delivery, and they did a search and said the package was delivered to the correct address. It was geotagged at the right location. They sent the same delivery person back to check, and they said the customer’s regular mail was still in her mailbox, but the package was not.

The post office said someone could have stolen it but also suggested that the customer did receive it and was lying to get their money back. This is the first time this has happened to me, and I wonder if this is my fault. If it was stolen and she actually does have it, do I still have to refund the transaction? I feel like once it's delivered and I did my part in calling the post office, it's out of my hand and shouldn't refund, but idk help!”

If you're in this situation, being pressured into refunding a legitimate transaction you know you shipped in good condition, there’s a way out.

Don’t back down. Refunding such orders will only make matters worse. It’ll open a door for such issues to continue.

Again, writing off chargebacks to avoid offending the customer will not help either. It makes you porous because, as research shows, friendly fraud accounts for 80% of all chargebacks.

So, you have two options:

i. Remediate the issue with compelling evidence.

You can gather all the documents we've noted above and send that to the customer to clarify you delivered the other. And if they proceed to initiate a chargeback, you can use those compelling evidence to dispute the chargeback.

However, as Alison rightly noted, the problem with this approach is that it takes a lot of work for merchants to win chargeback disputes. Chargeback remediation requires specialized knowledge, considerable time, and resource allocation. As a business owner, you want to allocate those resources to scaling your company rather than fighting to recover lost revenue.

So while you can try your best to argue things out yourself, your chances of winning could be 12%. That brings us to the second option.

ii. Automate your chargebacks for ROI guarantee.

Chargeflow's automated chargeback management solution offers eCommerce merchants a more reliable approach to dispute false chargebacks with a positive ROI guarantee.

Chargeflow will help you manage everything chargeback-related, from evidence gathering to dispute filling. Instead of chasing your tail fighting a lost cause, you can focus on serving your customer and improving your product or services.

And the success-based pricing means you ONLY pay when you win cases. But not just that. You will also have complete transparency over the entire process.

If you want to say bye-bye to chargebacks and recover disputes by autopilot, here's how to get started.

‍

About the Author: Tom-Chris Emewulu is Chargeflow’s Digital Evangelist. With 8+ years of digital marketing & venture building experience, he crafts compelling, high-converting, high-intent, data-driven, SEO-friendly articles that help the brand build a sustainable growth engine. Forbes, DW, Business Insider, Businessss2Community, and many other publications have featured his works. You can find him on Social Media via @tomchrisemewulu.