Building a Successful Shopify Clothing Store

Imagine waking up to a Shopify notification showing that money from a successful sale has suddenly been withdrawn. A customer filed a chargeback, and without a clear dispute process, you’re left absorbing the loss.

Chargebacks cost far more than the transaction itself. Merchants lose an estimated $3.75–$4.61 for every $1 disputed once fees and overhead are added. And with chargeback volumes projected to rise from 261 million in 2025 to 324 million in 2028, businesses will keep losing a portion of their hard-earned revenue.

Shopify merchants are especially vulnerable. High order volumes make it harder to catch red flags early, subscription renewals can trigger confusion, and global sales increase the risk of disputes.

The good news: chargebacks rarely happen at random. Most stem from preventable gaps in your workflows.

Here are the seven most common chargeback mistakes Shopify merchants still make — and how to avoid them.

Mistake #1: Relying on Default Shopify Settings

Shopify includes built-in tools to reduce fraud and chargebacks, like fraud analysis and transaction descriptors.

Fraud analysis uses risk indicators to categorize each order as low, medium, or high risk. Descriptors identify the merchant name on customers’ statements so they know what the charge is for.

But these settings are not foolproof. 

Fraud recommendations are only available on Shopify Payments or higher-tier plans. If you’re on the Basic plan, you may miss key insights into which orders are high-risk and need extra attention.

Fraud evolves faster than Shopify’s built-in filters. An order might appear safe but still exploit a blind spot outside what the default checks cover.

And while Shopify’s descriptors are helpful, generic or unclear wording can confuse customers — sometimes enough to make them file a “friendly fraud” dispute.

How to Avoid This Mistake

• Use a third-party fraud app (like Signifyd or Shopify Protect) to strengthen risk detection
• Customize your bank statement descriptor to make it instantly recognizable
• Add advanced fraud filters and regularly update them
• Use Chargeflow to automate chargeback prevention and management while keeping insights centralized

Pro Tip: Review all third-party tools at least quarterly to prevent security gaps or outdated app versions from creating new vulnerabilities.

Mistake #2: Ignoring Pre-Chargeback Alerts

Shopify’s email notifications alert you when a customer places, cancels, or edits an order. They also send pre-chargeback notifications, which are easy to overlook but critical to act on.

You’ll find chargeback cases under Orders → Chargebacks and Inquiries in your Shopify Admin, listed by reason code (for example, “Fraudulent” or “Product not received”). Each case includes a strict deadline, typically 7–21 days, for submitting evidence. Shopify provides a built-in template for uploading receipts, tracking numbers, customer communication, and other supporting documents.

The challenge: many merchants miss these alerts because of notification overload or simply not checking order messages often enough. Once the deadline expires, the cardholder’s bank takes over, and the funds are almost always reversed.

How to Avoid This Mistake

• Address every chargeback alert the same day it arrives.
• Assign a dedicated person or team to monitor disputes consistently.
• Use Chargeflow’s Alerts feature to stay ahead of deadlines. It delivers customized notifications and can automate pre-chargeback refunds to stop disputes before they escalate.

By responding quickly and automating alerts, you can protect revenue that might otherwise be lost and maintain a stronger dispute win rate.

Mistake #3: No Documented Dispute Playbook

Chargebacks can feel like a crisis, especially when they happen often or stem from fraud. US merchants spend nearly 10% of their revenue combating payment fraud, yet most still react to disputes instead of preparing for them.

Without a clear playbook, you risk:

• Missing potential warning signs that lead to chargebacks
• Delaying responses beyond required deadlines
• Handling disputes poorly and losing preventable cases

Creating a Standard Operating Procedure (SOP) for chargebacks helps you act fast and consistently. Your SOP should include:

1. Notification Process

Define who monitors the Shopify Admin and email for disputes. Decide how often notifications are checked and outline backup steps if the primary person is unavailable.

2. Categorization

List the common chargeback types, such as fraud, duplicate billing, or failed delivery. Include standard response templates or evidence bundles for each.

3. Evidence Checklist

Gather and store: order confirmations, invoices, shipment tracking, delivery proof, customer communication logs, refund policies, and product descriptions.

4. Response Timeline

Set an internal turnaround goal, ideally within 48 hours of receiving a notice.

5. Roles and Responsibilities

Clarify who collects documents, who drafts responses, and who submits them through Shopify’s chargeback dashboard.

6. Documentation and Reporting

Maintain a log of chargebacks, outcomes, and reasons. Review your win/loss ratios quarterly to identify trends.

7. Customer Service Escalation

Specify when to reach out directly to customers and provide scripts to help resolve disputes before they escalate.

Review your SOP every three to six months to keep it aligned with Shopify’s tools, evolving fraud tactics, and your store’s growth. A documented playbook turns chargebacks from chaos into a manageable, repeatable process.

Mistake #4: Confusing Billing Descriptors

Most shoppers have seen a debit alert on their bank app and thought, “What is this charge?” Even when the purchase is legitimate, confusing or generic billing descriptors often trigger unnecessary disputes.

This kind of confusion is a major driver of friendly fraud. Too many of these disputes can put your merchant account at risk or even land you on the MATCH (Merchant Alert to Control High-Risk) list.

Want to dive deeper? Chargeflow covers everything in our free guide, The Truth About Friendly Fraud: How Merchants Are Fighting Back in 2025. It explores how unclear billing information causes disputes and shares strategies that successful merchants use to reduce them.

How to Avoid Descriptor Confusion

• Customize your billing descriptor in Shopify Payments with a clear, recognizable brand name instead of a default or abbreviated one.
• Update descriptors with other payment providers, like PayPal and Stripe, to ensure consistency.
• Keep  your name identical across your website, invoices, emails, and receipts so customers instantly recognize it.
• Add support information where possible (such as a phone number or website URL) so customers know who to contact for assistance.
• Use dynamic descriptors for subscriptions (e.g., “GlowSkinCare Subscription” instead of just “GlowSkinCare”.)
• Send billing reminders before subscription renewals so customers are aware of the upcoming charge.

Pro Tip: Test your descriptor by making a small purchase and checking how it appears on your own bank statement.

Mistake #5: Responding Too Slowly in Shopify Admin

Dispute windows vary by network, but they are always short. Responding at the last minute is one of the costliest mistakes Shopify merchants make.

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The longer you wait: 

• The more frustrated your customer becomes
• The more likely you are to miss the case entirely
• The higher the risk of losing a valuable customer relationship

According to Chargeflow’s 2025 Psychology of Chargebacks Report, merchants who respond within 48 hours see significantly higher win rates.

How to Avoid Slow Responses

• Set a strict internal deadline, such as 48 hours from the moment a chargeback is received.
• Automate notifications so your team never misses an alert.
• Use Chargeflow’s Shopify Integration to automatically gather evidence, submit responses directly through your dashboard, and improve your recovery rate without the stress of managing every case manually.

Pro Tip: With Chargeflow's Shopify Integration, you can automatically collect evidence, submit responses through your dashboard, and improve your chances of recovering lost revenue, without the stress of managing everything manually.

Mistake #6: Skipping Second-Chance Opportunities

Many merchants give up on representment because they assume banks always side with the customer, or because collecting receipts, tracking numbers, and messages feels overwhelming. Without a structured system, every dispute feels like starting from scratch.

But skipping representment is costly. Even recovering a small percentage of disputes can add up to thousands of dollars each year.

According to Chargeflow’s Psychology of Chargebacks Report, only 3% of consumers said thier chargeback was denied due to merchant counter-evidence. This shows how rarely manual responses succeed and why so many merchants stop trying. Yet with structured workflows and automation, recovery rates can improve dramatically.

How to Avoid Missing Second Chances

• Create standard evidence templates for common dispute types.
• Maintain a central library of invoices, shipment confirmations, and customer communication logs.
• Automate representment so every case is submitted accurately and on time.

Pro Tip: Chargeflow’s automation has helped merchants boost win-back rates by up to 300%, turning lost disputes into recovered revenue.

Bottom line: Don’t give up. Every chargeback you contest is a chance to protect revenue, and automation makes it possible at scale.

Mistake #7: Managing Chargebacks Manually

Manual processes don’t scale. If you’re already juggling inventory, fulfillment, and customer support, adding chargeback management on top often leads to missed deadlines, incomplete evidence, and lost revenue.

Why Manual Workflows Fail

• Win rates are low: Merchants relying on manual processes typically recover fewer than one in ten disputes.
• Time costs are high: Hours are lost collecting receipts, shipment tracking, and support logs for each case.
• Deadlines are strict: One missed submission date, and the dispute is closed for good.
• Fees add up: Each dispute carries a non-refundable chargeback fee, usually $20–$30, which grows quickly for active Shopify stores.
• Manual handling doesn’t scale: Five disputes a month may feel manageable, but once your store grows, the process collapses under the volume.

How to Fix It

• • Automate evidence collection, deadline tracking, and submissions with Shopify-ready tools.
  • Use software that builds consistent, complete, and bank-compliant evidence packages.
  • Rely on Chargeflow’s Shopify integration to automatically generate AI-optimized evidence tailored to each processor and bank.
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Automation isn’t just about saving time. With Chargeflow, it’s about protecting revenue, reducing stress for your team, and actually winning disputes at scale. When disputes slip through the cracks, your chargeback ratio rises, which can put your Shopify Payments account at risk.

Wrapping Up

Chargebacks cost businesses thousands of dollars each year in lost revenue, fees, and wasted time. Poor management drains profits, damages your brand, and increases customer churn.

To protect your Shopify store, avoid common mistakes like relying only on default settings, ignoring pre-chargeback alerts, or responding too slowly to disputes. Instead:

• Create a clear SOP for chargebacks
• Use advanced fraud filters
• Set up automated alerts
• Keep billing descriptors clear and consistent

Don’t skip representment opportunities. Every dispute you contest is a chance to recover revenue. And remember, automation isn’t just about efficiency. With Chargeflow, it’s about improving win rates, maintaining a healthy chargeback ratio, and protecting your Shopify Payments account.

By avoiding these mistakes and using Chargeflow’s Shopify integration, merchants can reduce chargebacks, recover more revenue, and scale their business with confidence.

👉 Ready to protect your store? Install Chargeflow from the Shopify App Store and start winning more disputes automatically.