Two chargebacks can carry the same "fraudulent" label and have very different causes. This guide explains the difference between true fraud and friendly fraud, how to tell which one you are looking at, and what to do about each.
Two different problems
True fraud is a purchase made by someone who is not the cardholder, usually with stolen card details. Friendly fraud is the common name for a dispute filed by the real cardholder, or someone in their household, over a purchase that was actually made. Shopify's own list of fraudulent dispute scenarios covers both kinds.
- Stolen card: Someone else used the card without permission
- Unrecognized charge: The customer does not recognize the charge on their statement
- Family purchase: A family member bought without the cardholder knowing
How to tell them apart
Look at the order as it was placed, not at the dispute label. True fraud tends to show weak links between the buyer and the card. Friendly fraud tends to look like an ordinary order from an ordinary customer.
| Points to true fraud | Points to friendly fraud |
|---|---|
| AVS or CVV did not match | AVS and CVV matched |
| Shipping address far from the billing address | Delivered to the cardholder's own address |
| No order history, unfamiliar device or location | Earlier successful orders from the same customer |
| No reply to messages | Customer emailed you about the order |
Handling true fraud
True fraud is stopped before fulfillment, because once the goods ship there is little to recover. Review flagged orders, try to verify the buyer, and cancel when the details do not hold up. See the red flags of a fraudulent order.
- ✅ Check the fraud indicators on every medium and high risk order
- ✅ Contact the customer before shipping when something looks off
- ❌ Do not fight a dispute where the order was clearly placed with a stolen card
Handling friendly fraud
Friendly fraud is reduced by being easy to recognize and easy to reach. Shopify's chargeback prevention guidance recommends using your store name or domain as the billing statement text, so customers recognize the charge. It also recommends making contact details easy to find, sending receipts, and refunding promptly.
- Statement text: Use a name customers will recognize on their card bill
- Contact: Make it simple to reach you before they reach their bank
- Shipping: Use tracking and delivery confirmation when you can
- Policy: Keep a clear return policy that is easy to find
Evidence when you dispute it
When the order was real, respond with proof that links the cardholder to the purchase. Shopify lists these as recommended evidence for a fraudulent transaction dispute. The card issuer makes the decision, so the outcome is never certain. See how to respond to a chargeback.
- Matches: AVS and CVV results
- History: Earlier successful orders from the same customer, email or address
- Delivery: Confirmation of delivery to the verified address
- Messages: Anything from the customer acknowledging the order
Doing this at scale
RiskClarity reviews each paid order, explains the risk in plain English with the fraud signals behind it, and recommends allow, verify or hold. Every decision you make is logged in an audit log you can export for chargeback disputes. See RiskClarity.