If you've been selling online for any length of time, you've probably received an order that made you pause.

Maybe the customer wanted overnight shipping on a $2,000 purchase. Maybe the billing and shipping addresses didn't match. Or perhaps Shopify flagged the order as Medium Risk.

The challenge is that fraud isn't just one thing.

Fraudsters use a wide variety of techniques, and many of them have become increasingly sophisticated over the past few years.

Understanding the most common types of fraud will help you recognize suspicious behavior before it turns into an expensive chargeback.

1. Stolen Credit Card Fraud

This is still the most common type of fraud affecting Shopify merchants.

A criminal obtains stolen credit card information and uses it to purchase expensive products before the legitimate cardholder notices unauthorized activity.

Once the real cardholder disputes the transaction, the merchant is left with the chargeback—and usually without the product.

Common warning signs

• High-ticket purchases
• Expedited shipping
• Billing and shipping addresses don't match
• Multiple payment attempts before a successful payment
• Shopify flags the order as Medium or High Risk

How to reduce your risk

Always manually review expensive orders before fulfilling them. A simple phone call can often identify suspicious orders before they're shipped.

2. Friendly Fraud (Chargeback Fraud)

Despite the name, there's nothing friendly about it.

Friendly fraud occurs when a customer legitimately receives the product but later disputes the charge with their credit card company.

Sometimes it's intentional.

Sometimes a family member made the purchase without permission.

Sometimes the customer simply doesn't recognize the charge.

Regardless of the reason, the merchant must prove the purchase was legitimate.

How to reduce your risk

• Require signature confirmation on expensive shipments.
• Keep detailed order records.
• Save customer emails and support conversations.
• Maintain proof of delivery whenever possible.

3. Business Identity Fraud

This is one of the fastest-growing scams we've encountered.

Instead of pretending to be an individual, fraudsters impersonate legitimate businesses.

They often copy:

• Company names
• Employee names
• Email signatures
• Logos
• Phone numbers

At first glance, everything appears authentic.

The giveaway is usually something subtle.

For example:

The signature says:

John Smith
Marriott Hotel

But the email address is:

john@mariothotel.com

Most people won't notice the missing letter.

That's exactly what the scammer is counting on.

How to reduce your risk

• Carefully inspect email domains.
• Search for the person on LinkedIn.
• Verify the company website.
• Call the business using the phone number listed on its official website—not the one provided in the email.

4. Account Takeover (ATO)

Instead of stealing a credit card, criminals gain access to an existing customer account.

Because they're using a real customer profile, saved payment methods, and previous order history, these orders can appear completely legitimate.

Common warning signs

• Shipping address suddenly changes
• Large purchase after months of inactivity
• Unusual login locations
• Multiple failed login attempts

How to reduce your risk

Encourage customers to use strong passwords and enable two-factor authentication whenever available.

5. Address Change Fraud

This scam catches many merchants by surprise.

The original order appears perfectly legitimate.

Hours later, the customer contacts support.

"I accidentally entered the wrong shipping address."

If your team updates the shipping address without additional verification, you've potentially redirected stolen merchandise to the scammer.

How to reduce your risk

Never change the shipping address on a paid order without verifying the customer's identity again.

6. Reshipping and Freight Forwarding Fraud

Fraudsters sometimes ship products to a reshipping company or freight forwarding warehouse.

The package is then forwarded elsewhere, often internationally, making recovery nearly impossible.

It's important to note that not every freight forwarding address is fraudulent. Many legitimate international customers use forwarding services.

The concern arises when a freight forwarding address is combined with several other warning signs.

How to reduce your risk

Review the entire order—not just the shipping address.

Multiple red flags together deserve manual verification.

7. Refund Fraud

Refund fraud occurs when customers attempt to obtain both the product and their money back.

Common examples include:

• Claiming the package never arrived
• Reporting damage that didn't occur
• Requesting refunds after receiving the product
• Exploiting generous customer service policies

How to reduce your risk

• Keep detailed shipment records.
• Require photos when appropriate.
• Use signature confirmation for expensive deliveries.
• Document every customer interaction.

8. Return Fraud

Return fraud has become increasingly common, particularly for high-value products.

Examples include:

• Returning a different product
• Returning an older version
• Returning an empty box
• Claiming parts were missing
• Using the product before returning it

How to reduce your risk

Inspect every return carefully before issuing a refund.

For expensive products, document the item's condition before shipment and after it's returned.

Fraud Rarely Looks Like the Movies

Many merchants expect fraud to be obvious.

In reality, the most expensive fraud attempts often look completely normal.

A suspicious order usually isn't identified by one red flag.

It's identified by several small inconsistencies that, together, tell a story.

Learning to recognize those patterns is one of the most valuable skills a high-ticket Shopify merchant can develop.

The Best Defense Is a Consistent Process

The purpose of understanding these scams isn't to become suspicious of every customer.

It's to know when to slow down and verify an order before shipping.

That's exactly why our team follows a standardized fraud review process for high-risk orders.

Instead of relying on intuition, every suspicious order goes through the same verification steps before it's approved.

👉 Read next: The High-Ticket Shopify Fraud Prevention Guide where we share our complete fraud detection workflow, red flags to watch for, and the verification process we've developed after managing thousands of high-ticket Shopify orders.