Fulfil low risk, hold the supplier order on medium risk until the customer is verified, and cancel high risk, unless you can explain the flags. Shopify’s fraud analysis gives each eligible online card order a low, medium or high risk level; its help says to “Consider canceling” high ones, and that Shopify does not cover charge reversals from banks. For a dropshipper the key point is timing: the damage happens when you pay the supplier before checking. The worked example below shows that cancelling is the better call once you think fraud is more than about 44 percent likely.
What the risk level covers
Per Shopify’s fraud analysis page:
- It applies to online credit card orders Shopify can verify, and recommendations need the Grow plan or higher, or Shopify Payments. Test, free, gift card, point of sale, B2B and subscription renewal orders are excluded.
- Three levels: low (“You can fulfill this order”), medium (“Confirm with the customer before fulfilling”), high (“Consider canceling this order”). Medium and high orders carry a warning symbol on the Orders page.
- Indicators checked: address verification (AVS), the card security code (CVV), whether the customer’s location matches the payment method, unusual device or network activity, and whether more than one card was tried.
- For high risk you can attempt to verify, cancel or refund the order.
The decision flow
Shopify’s own wording is only the risk level and its recommendation (fulfil, confirm with the customer, consider canceling). The supplier-order column and the cancel rules below are our decision rules, not Shopify’s.
| Order shows | Action | Supplier order |
|---|---|---|
| Low risk | Fulfil normally | Place |
| Medium risk, flags are explainable (billing and shipping differ because it is a gift) | Email the customer at the address on the order; wait for a reply | Hold until they answer |
| Medium risk, no reply, or answers do not fit | Cancel and refund | Do not place |
| High risk | Cancel and refund unless you can verify the buyer through the channel they used to order | Do not place |
| Several cards tried, then one works | Treat as high | Do not place |
Two settings help. Shopify Flow can hold or cancel automatically; Shopify’s page names capturing payment for lower-risk orders and holding high-risk ones as examples. And manual payment capture means orders sit as “Authorized” until you capture; for Shopify Payments credit cards the authorization window is 7 days, after which you may be unable to collect (capturing payments). That gives time to verify but not unlimited time.
The cost of a wrong call, worked
Assumptions (ours, change them): order value $60, supplier cost including shipping $25, card fee 2.9% + $0.30 (our assumption, as in the payments comparison), chargeback fee $15 (US, per our chargeback guide).
- Card fee: 0.029 x 60 + 0.30 = $2.04.
- If you cancel a genuine order, you lose the profit: 60 - 25 - 2.04 = $32.96.
- If you fulfil a fraudulent order, the sale reverses but the goods are gone: supplier $25, chargeback fee $15, card fee not returned $2.04, so $42.04 lost.
- Cancelling is better when p x 42.04 is greater than (1 - p) x 32.96, so p is greater than 32.96 / (32.96 + 42.04) = 0.4395.
Read that as: cancel when fraud looks more likely than about 44 percent. Hold, which costs only a delay, is the better move below that. Change the supplier cost and the line moves. At a $10 supplier cost: genuine profit is 60 - 10 - 2.04 = $47.96, fraud loss is 10 + 15 + 2.04 = $27.04, and the break-even is 47.96 / (47.96 + 27.04) = 0.64. Cheap goods make cancelling less attractive; expensive goods make it more so.
Before orders arrive
Shopify also describes Fraud Protect for eligible US merchants on Shopify Payments, which guarantees payment on orders it classes as protected; check eligibility in your admin. Review flagged orders before fulfilment: Shopify’s protecting-orders page says fulfilling high-risk orders without review can result in chargebacks, which may lead to payment processing issues or removal from Shopify Payments. If a payout is held, see payout holds and reserves; for evidence when a dispute arrives, the chargeback guide; and for genuine customers whose cards fail, card declined.
What we could not verify
Shopify’s help text read does not describe card testing or order-per-day limits as separate settings, and does not cover how to contact a customer about a suspicious order (that step is our suggestion), so we do not list further settings. The 2.9% + $0.30 card fee and the $25 supplier cost are assumptions, not Shopify figures. The 44 percent threshold depends wholly on the assumptions above.
Method: researched from Shopify’s help centre; checked 2 Oct 2026. Calculations are ours.