How to avoid transaction disputes and reduce fraudulent transactions


What is a transaction dispute (Chargeback)?

A transaction dispute means a business deal is disputed by a credit card holder or issuer.

There are many reasons for trading disputes, the most common of which are: returns, service termination, disputed transactions, trading errors or fraud.

Since online transactions do not require the physical presentations of credit cards for validating the card owner details, the possibilities of a transaction dispute is relatively high. Due to lack of relevant knowledge on Chargeback, when engaging in such situations, shop owners often do not know how to response and minimise their business loss. 


What is a fraudulent transaction?

Generally, transactions that are not authorised by the credit card holder will be referred as fraud, and the credit card holder can report for a fraudulent transaction with the bank, thus causing the shop owner the risk to return the payment and hence causing a financial loss.

 If you suspect a fraudulent order, you can investigate the suspicious order by the checking with :

 a.  Address, delivery arrangements:

The IP address at the time the order is placed is a good key to verify whether the order is potentially fraudulent.

You can obtain the IP address of your customer in SHOPLINE backend after they placed the orders , and verify the buyer's location through the search engine of IP geolocation service.




  • Verify that the IP address and shipping address are in the same area
  • Whether they have placed a large number of orders in a short period of time using the same  IP  address
  • Check if there are multiple orders using the same IP address ,and ask to deliver to the same address
  • If the shipping addresses are located in country/region with high risk of fraud*
  • After placing the order, request to change the delivery addresses, ship the items to the same address / high-risk location (eg. vacant properties, hotels, PO Boxes, etc.) / change to self pick-up 
  • Ask for fast delivery / Self pick-up for expensive goods (such as electronics)
  • Request to use their suggested shipping providers for deliveries


* You can refer to the instructions from Financial Action Task Force On Money Laundering (FATF) :


b.  Guest, order information:

Before sending the item, carefully check the customer's order information, it is recommended to check:


  • Whether new customers place orders, but the amount is higher than your order average
  • A large number of multinational orders received in a short period of time
  • Received unusually large number of orders during an abnormal order time
  • Whether the email address is suspicious, like randomly entered information or unaligned order details (such as customer name and email address)
  • Searching for past usage of the email through search engines*

* Refer to the figure below:

 No past usage


If the order you have received is consistent with most of the above suspicious or high-risk indicators, it is recommended that you take the following precautions to avoid loss.


  • If it is a multinational, bulk and/or large amount order, please delay the shipment;
  • If it is a domestic order, please use your own delivery service provider. If you have any doubt, please inform the courier for pausing the order delivery. 
  • Contact the customer via phone or email provided in the order, and confirm the order information
  • Check your blacklist to see if it is a similar email
  • If you encounter an order that is similar to a previously identified suspicious transaction or chargeback, such as a similar IP address, email address, phone number, shipping destination, item type, etc., please confirm with the customer, if there is any doubt, please cancel your order and proceed the refund. 


If you have any concerns about your order, you should first verify your customer information. If you are not sure about it, you should wait until the completion of the additional data verification before deciding whether to ship the product.


Here are some free online tools that you can use to find the location and other information about the relevant IP:

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