Blacklist, Block, and Ban Scammers & Fraudulent Customers on Shopify

Are scammers and fraudulent customers draining your store's revenue and disrupting operations? 

For Shopify merchants, combating fraud is a critical challenge, as every fraudulent transaction leads to financial loss. 

To protect your business, it’s essential to adopt effective strategies to identify, block, and blacklist fraudulents. 

Our guide provides actionable solutions to safeguard your store, streamline operations, and create a secure environment for genuine customers.

Impact of Fraudulent Orders on Stores

Fraudulent orders severely harm a store’s profitability and reputation. According to a recent report, e-commerce fraud losses globally amounted to $48 billion in 2023, with small and medium-sized businesses (SMBs) being the primary targets (Source: MasterCard). 

Fraud impacts stores in the following key ways:

1. Financial Losses

Chargebacks and refunds resulting from fraudulent transactions can quickly erode revenue. According to studies, merchants often lose not only the cost of goods but also shipping fees and chargeback penalties, which can average $190 per incident.

2. Increased Operational Costs

Time and resources spent investigating and resolving fraud cases divert attention from core business activities. Fraudulent orders also inflate transaction volumes, leading to higher payment processing fees.

3. Negative Customer Experience

Fraudulent transactions can disrupt inventory management, leading to stock shortages and delays. These issues ultimately affect genuine customers, harming trust and loyalty.

4. Chargeback Ratio Risks

A high chargeback ratio—exceeding the standard threshold of 1% of monthly transactions—can result in account freezes, higher processing fees, or termination by payment processors.

5. Damage to Brand Reputation

Persistent fraud issues can tarnish a brand’s image, making potential customers hesitant to shop with your store.

By understanding fraud's tangible and intangible impacts, Shopify merchants can prioritize proactive fraud prevention strategies.

When to Block a Customer on Shopify

Blocking a customer should be a well-considered action to prevent fraud without alienating genuine shoppers. Merchants should evaluate key indicators of fraudulent behavior before implementing a block. 

Situations that warrant blocking include:

1. Suspicious Transaction Patterns

Frequent high-ticket orders placed in rapid succession or from suspicious IP addresses indicate potential fraud. For instance, orders from high-risk locations or using mismatched billing and shipping details are red flags.

2. Chargeback History

Customers with a history of disputing legitimate transactions or filing multiple chargebacks can pose a risk. Monitoring such patterns and blocking repeat offenders is essential.

3. Stolen Payment Methods

Orders flagged by fraud detection tools as using stolen credit card information should result in immediate blocks. Reports indicate that up to 60% of fraud cases involve stolen cards.

4. Bot or Automated Transactions

Unusual order behaviors, such as abnormally fast checkout times or bulk purchases of out-of-stock items, suggest the involvement of bots. Blocking automated scripts protects inventory and prevents unnecessary disruptions.

5. Violation of Store Policies

Customers who abuse return policies, misuse discount codes, or engage in other policy violations are candidates for blocking to safeguard business integrity.

Merchants should leverage Shopify’s built-in fraud analysis tools and third-party apps to automate blocking decisions based on predefined rules. 

Balancing strict fraud prevention with customer service ensures that only malicious users are targeted, preserving legitimate sales.

Identifying Scammers and Fraudulent Customers

Identifying scammers and fraudulent customers is the cornerstone of protecting your Shopify store from chargebacks and revenue loss. With fraud accounting for up to 1.8% of global e-commerce revenue in 2023, proactive detection is vital. 

Here are key indicators to help merchants spot potential fraudsters:

1. Unusual Order Characteristics

• Discrepancies between billing and shipping addresses or phone numbers that don’t correspond to the shipping region are common fraud markers.
• Orders significantly larger than your store’s average, especially for high-ticket items, may indicate fraudulent intent.
• Fraudsters often opt for expedited shipping to minimize the time available for fraud detection.

2. Suspicious Payment Activity

• Scammers often use stolen credit cards and repeatedly attempt payments until one succeeds.
• The use of prepaid cards, anonymous payment methods, or multiple payment attempts on the same order should raise red flags.

3. Behavioral Red Flags

• Incomplete or fake contact information, such as generic email addresses (e.g., “test@test.com”), or accounts with no order history are often fraudulent.
• Scammers frequently place multiple orders from the same IP address in a short time or attempt to purchase out-of-stock items.

4. Geographic and Device Anomalies

• Orders originating from regions with a high incidence of fraud, such as certain countries flagged by the Fraud Risk Index, are worth additional scrutiny.
• Multiple orders placed using the same device fingerprint but under different accounts may indicate fraudulent activity.

5. Recurring Chargebacks

• Fraudsters often target stores repeatedly. Shopify analytics and third-party fraud detection apps can track patterns of chargeback-prone customers.

Tools to Aid Identification

Leverage Shopify’s Fraud Analysis tool and third-party app like ChargePay. These tools use machine learning to flag suspicious activity and provide actionable insights, helping merchants confidently separate scammers from legitimate customers.

By recognizing these warning signs, merchants can minimize exposure to fraudulent activity and safeguard their store’s revenue and reputation.

Ways to Block & Blacklist Customers on Shopify

Blocking and blacklisting fraudulent customers is essential for safeguarding your Shopify store from financial losses and operational disruptions. 

Shopify offers several built-in and third-party tools to efficiently identify and restrict access to scammers. 

Below are actionable ways to block and blacklist customers on Shopify:

1. Shopify Built-in Fraud Prevention Feature

Shopify’s platform provides merchants with fraud detection and prevention tools integrated into its ecosystem.

• Fraud Analysis Tool: Every Shopify plan includes a fraud analysis feature that flags potentially risky orders based on key indicators, such as mismatched billing and shipping addresses or orders placed from high-risk IP addresses.
• Order Tagging: Shopify allows merchants to tag orders flagged as suspicious for further review, ensuring quick decision-making before fulfilling high-risk orders.
• Canceling Fraudulent Orders: Merchants can use fraud analysis recommendations to cancel orders directly within the Shopify dashboard, preventing goods or services from being delivered to scammers.
• Payment Holds: For orders flagged as high-risk, merchants can delay fulfillment until payment is verified by the issuing bank.

While these tools are effective for early detection, combining them with third-party apps or custom scripts enhances overall fraud prevention.

2. ChargePay Fraud Dispute Alerts

ChargePay integrates seamlessly with Shopify to provide real-time alerts and dispute management for fraudulent transactions.

• AI-Powered Alerts: ChargePay identifies suspicious transactions by analyzing transaction data, customer history, and device information. Fraudulent transactions are flagged before they escalate into chargebacks.
• Automated Blocking: Based on pre-set rules, ChargePay can automatically block fraudulent customers, minimizing manual intervention.
• Proactive Chargeback Prevention: ChargePay reduces chargeback rates by up to 99% by addressing fraudulent activities early and providing detailed evidence for disputes.
• Customizable Risk Scoring: Transactions are assigned a risk score, allowing merchants to set their thresholds for blocking or reviewing transactions.

ChargePay is a powerful tool for merchants looking to combine fraud prevention with efficient chargeback management, ensuring both cost savings and customer protection.

Check the Shopify App Now!

3. IP Blocking Shopify Apps

IP blocking apps allow merchants to block access from specific IP addresses associated with fraudulent activity. Popular apps include FraudBlock, Shop Protector, and Blockify.

• Real-Time IP Blocking: These apps can detect and block multiple orders placed from the same suspicious IP address or those associated with known fraud networks.
• Customizable Blacklists: Merchants can manually add IP addresses or device fingerprints to a blacklist to prevent repeat offenders from accessing the store.
• Behavioral Monitoring: Some apps monitor suspicious activities, such as unusually fast browsing or checkout times, and block the source immediately.
• Scam Prevention: By blocking malicious IP addresses, merchants can prevent bot attacks, spam orders, and abuse of discount codes.

Integrating these apps with Shopify ensures seamless monitoring and automated blocking, saving time and effort.

4. Country Based Access Restrictions

For merchants frequently targeted by scammers from specific regions, restricting access by country is an effective strategy.

• Geo-Blocking Tools: Shopify apps like GeoIP Country Redirect and EasyLockdown allow merchants to block or restrict access based on the visitor’s geographic location.
• Country-Based Checkout Restrictions: Shopify’s settings allow merchants to restrict shipping or payment options for specific countries to minimize fraud risks.
• Real-Time Location Tracking: Using IP-based geolocation, these tools can monitor traffic and flag or block access from high-risk regions identified by global fraud indexes.

This method reduces fraudulent activity and helps optimize marketing and inventory strategies by focusing on safer, high-potential markets.

Conclusion

Effectively blacklisting, blocking, and banning scammers is not just about protecting your Shopify store from fraud. It’s about building a sustainable business that prioritizes trust, profitability, and operational efficiency. 

By leveraging Shopify's built-in tools and integrating advanced fraud prevention solutions like ChargePay, merchants will stay ahead of upcoming threats. 

The right strategy empowers you to focus on growth and customer experience, knowing that your store is equipped to mitigate fraudulent challenges.