Before signing up for an ecommerce platform like Shopify, one important consideration is whether it can be trusted.
In this article, we'll talk about the legitimacy and safety of Shopify.
Let's begin!
Is Shopify legit?
Shopify is, without a doubt, a legitimate and reliable ecommerce platform.
Established in 2006, it has grown to be one of the largest ecommerce platforms worldwide, supporting over millions of sellers worldwide.
Its credibility is clear, with over 4.7 million online stores worldwide choosing Shopify:
Even well-known brands like Heinz, Kylie Cosmetics, Allbirds, and Gymshark rely on Shopify for online sales!
Tip: Have you already created your Shopify account? If not, sign up by clicking this link here to get a free 3-day trial + 1 month for $1!
Is Shopify safe?
We have spent plenty of time using Shopify and written many articles about it, and we can confidently say that Shopify is indeed a safe platform for both you and your customers.
For a brief overview, we have summarized a few key points related to the safety of Shopify:
- SSL certificate. Shopify provides a free 256-bit SSL certificate for all its stores. This ensures the encryption of data being transmitted between the user's browser and the merchant's server, which protects sensitive information such as credit card details and personal information. (More info here)
- PCI-DSS compliance. Shopify is compliant with Level 1 PCI-DSS (Payment Card Industry Data Security Standard). This means it meets rigorous security standards set by the industry to protect cardholder data throughout the transaction process.
- Fraud detection tools. Shopify provides merchants with powerful fraud detection tools, such as Fraud Protect. These tools check for suspicious activity and flag potentially fraudulent orders:
While Shopify's safety features are reliable, you should take the following precautions to protect yourself from scams:
- Avoid clicking on suspicious emails or messages that claim to be from Shopify. Always verify the sender's identity before acting on any instructions.
- Use a unique password for your Shopify store.
- Use trusted payment gateways like Shopify Payments or PayPal that offer buyer protection.
Good to know: Before clicking on any email link, use the free VirusTotal software to verify whether the URL contains phishing or malware.
Also, bad actors often use cloaking services to make their URLs 'less' detectable.
In that case, you can use Urlex to expand the URL and then scan it through VirusTotal.
7 Common Shopify scams to avoid
Shopify works hard to educate merchants and buyers about these common schemes through its Privacy & Security Center.
They also use fraud detection systems and provide support staff to assist merchants affected by scams.
That said, it is good practice to know what the most common scams are that you may have to face one day.
1. Phishing scam
Phishing scams are prevalent not only on Shopify but on many other online platforms.
In this case, scammers send fraudulent emails to Shopify store owners, pretending to be Shopify Support or another reputable source.
These emails often contain a link leading to a fake login page, aiming to steal credentials.
2. Chargeback scam
Chargeback scams occur when customers file a chargeback with their bank or credit card company, disputing their purchase in a Shopify store.
They claim the item was never delivered or request a refund for another false reason, which results in a financial loss for the store owner.
3. Triangulation scheme
In a triangulation scheme, scammers create a fake Shopify store and list products at low prices.
When customers place orders, the scammer buys the same product from the original store using a stolen credit card and ships that item to the original customer.
So, in essence, the scammer does not actually have the products. When a customer places an order, the scammer uses a stolen credit card to purchase the item from a real website and ships it to the customer.
The customer receives their order unaware that fraudulent activity occurred. This scheme deceives both the credit card holder and puts the legitimate business at risk of dealing with chargebacks when the fraud is discovered later on.
4. Switching scheme
Switching schemes involve shady merchants sending counterfeit or low-quality products that differ from the ones advertised on their Shopify store.
Some customers may not notice the difference, while others will be disappointed and possibly harmed by the lower quality of the products.
5. Direct client scams
Direct client scams are carried out by untrustworthy people posing as potential customers.
They may contact store owners via email, phone, or social media, asking for free samples or services in exchange for exposure or reviews.
Once they receive the products or services, they disappear without providing the promised benefits.
6. Fake return scam
A fake return scam occurs when someone buys an item, uses it, and then returns it with the original receipt for a full refund.
Unfortunately, this kind of scam is becoming popular in the ecommerce industry.
In fact, the scammer takes advantage of lenient return policies and relies on the staff's inability to inspect returns thoroughly.
They essentially get the merchandise for free by abusing the return process, resulting in financial losses for the retailer.
When, in reality, the scammer has already used the product and not kept it in its original condition.
7. Shopify store duplicator scheme
The Shopify store duplicator scheme is a scam where fraudsters create fake online stores that look exactly like your store!
These fraudsters then advertise their bogus stores on social media, tricking unsuspecting customers into thinking they're shopping from your store.
Victims often end up with counterfeit goods, wrong items, or receive nothing at all, while scammers steal payments and personal information!
These scams can ruin your business reputation and erode the trust you've built with your customers over time.
Also, what makes these operations so insidious is how quickly the scammers can change websites and cover their tracks.
They frequently switch to new domains and use clever tactics to avoid detection, like employing throwaway email addresses and using bulletproof hosting services that turn a blind eye to illicit activities.
How do you prevent scams on Shopify?
Here are some proactive steps you can take to protect your Shopify store from fraudulent activities:
1. Use two-factor authentication
A simple but effective method to enhance security is implementing two-factor authentication (2FA).
This adds an extra layer of protection, as users will have to confirm their identity using a device like a smartphone. With Shopify, we can enable 2FA from the admin settings.
There are three types of authenticator apps you can choose from:
- Google Authenticator (Android/iPhone)
- Amazon AWS MFA
- Authenticator (Windows/Android/iPhone)
That said, one of the most popular among users is the Google Authenticator, which is available for Android and iPhone.
2. Use Shopify's fraud analysis tools
Shopify provides various fraud analysis tools to help us detect suspicious or potentially fraudulent orders.
By closely monitoring these tools, we can identify orders that may need additional review and prevent scams before they happen.
If you are eligible for Shopify Payments, then your store will have some of these useful tools:
- Fraud analysis indicators
- Fraud recommendations
- Order risk level
3. Protect your store with the Chargeflow app
Chargebacks are a common scam where customers fraudulently claim they didn't authorize a purchase or receive an item after ordering from an online store.
Not only does this hurt the store financially, but too many chargebacks could even get their Shopify account suspended.
It's a tricky scam for store owners to fight.
Thankfully, there's a way to fight this: the Chargeflow Dispute Chargebacks app from the Shopify app store:
When a customer files a chargeback, the Chargeflow app automatically compiles all relevant order information directly from your Shopify store, such as details, communication, and shipping proof.
It then lets you effortlessly submit this evidence to payment networks like Visa and Mastercard through a streamlined interface.
This solution can help improve your chances of winning disputes and reduce the financial impact of fraudulent chargebacks.
4. Establish dynamic 3DS
Dynamic 3D Secure (3DS) is a security protocol designed to add an extra layer of security when processing credit card transactions.
For orders processed with 3D Secure, your customers will notice an extra verification step appear on their screen.
At this point, they will be asked to securely confirm their identity using a common authentication method linked to their payment details.
Examples include receiving a one-time code via text to their mobile device or using the fingerprint/facial recognition features built into many smartphones.
Since most people are already familiar with these types of identity checks on their personal devices, completing the extra verification should be a simple process for customers.
By using 3DS, we can prevent unauthorized card usage, provide cardholder authentication, and shift liability to the card issuer in case of fraud.
5. Regularly audit your store
It's essential to regularly audit your store, especially when certain red flags arise, like rapid inventory depletion, large transactions, or high-risk orders.
As part of your audits, you should carefully review order details, customer information, shipping addresses, and customer communication.
Be on the lookout for suspicious patterns, such as the same customer ordering large quantities of the same product to different addresses.
That said, if you want to streamline your workflow for running audits, Signifyd can help automate the process:
Signifyd is a chargeback protection and fraud prevention platform that uses machine learning and artificial intelligence to help ecommerce merchants combat fraud and reduce chargebacks.
It integrates with merchants' systems through APIs to analyze order data in real-time as it comes in.
Pretty cool, huh?
6. Create strict store policies
Effective store policies can help prevent scams and provide a clear outline for both customers and staff.
Some important guidelines to implement include:
- Return and refund policies. Clearly outline the conditions for accepting returns and processing refunds.
- Shipping policies. Detail shipping methods, delivery times, and insurance options. (Learn how to create your own shipping policy here)
- Payment policies. Specify the methods of payment that are allowed and potential extra fees.
You can use a tool like a policy generator to help you generate your store policy fast.
But be sure to edit it and, most importantly, customize it according to your store's features.
7. Train staff on fraud detection and prevention
Training staff to recognize the warning signs of fraud and prevent scams is also crucial.
By providing proper education and resources, you can equip your team members with the knowledge they need to safeguard your business against fraudulent activity.
Training should cover topics like:
- Recognizing phishing attempts
- Identifying common fraud patterns
- Verifying customer information
- Implementing secure processes for handling sensitive data
Generally speaking, whether you are a Shopify store owner or not, it is still worth learning more about fraud prevention.
How does Shopify protect customers' data?
Shopify prioritizes its customers' data protection and takes a proactive approach to security.
In this section, we'll detail how Shopify keeps your data safe.
Data minimization
One of the key ways Shopify protects customer data is by implementing data minimization practices.
This means Shopify only collects, processes, and stores the minimum necessary information required to provide their services:
- Collection. They collect only the data that are needed for their services, such as basic store and user information.
- Processing. They ensure that the processing techniques are streamlined, and unnecessary actions that might put customer data at risk are avoided.
- Storage. When storing data, they keep your information only as long as it's required for their services.
Proxy detection
Another measure Shopify employs to protect customer data is proxy detection.
Using advanced algorithms, Shopify can detect the use of proxies that are commonly used by bad actors to hide their true location or identity.
When Shopify identifies suspicious activities, it takes prompt action to investigate and, if necessary, blocks access.
Here's a brief overview of how the Shopify proxy detection process works:
- Monitoring. Shopify continuously monitors incoming traffic for signs of proxies.
- Detection. Shopify sophisticated algorithms detect the use of VPNs, Tor, or other anonymizing tools.
- Investigation. In cases where Shopify suspects malicious activity, Shopify analyzes the situation and takes appropriate action.
- Blocking. If a threat is confirmed, Shopify blocks access to customer data.
How do you report scams on Shopify?
To report scams on Shopify and maintain a safe shopping environment, follow these steps:
- Collect evidence. Before reporting, gather all relevant information, such as screenshots of suspicious activities, fake ads, and misleading product descriptions. This will help Shopify investigate the issue more effectively.
- Contact Shopify Support. Report the scam by reaching out to Shopify Support via their help center. Include all collected evidence and a detailed description of the issue.
- File a report with relevant authorities. In some cases, it might be necessary to report the scam to local authorities or organizations like the Better Business Bureau or the Federal Trade Commission (FTC).
Summary
Before we go, we've created a quick summary of this article for you, so you can easily remember it:
- Shopify is safe and reliable, as it's backed by Level 1 PCI DSS compliance and robust security features.
- Be cautious of third-party apps and services. Educate yourself on common phishing tactics and use only verified tools.
- Implement two-factor authentication and use Shopify’s fraud analysis tools to detect potentially fraudulent orders.
- Regularly audit your store for unusual activities and train staff in fraud detection and prevention.
Final thoughts
There you have it!
While Shopify provides a safe and legitimate platform for online selling, you should still exercise caution to avoid potential scams.
If you have any questions, then don't forget to write a comment down below!
Want to learn more about Shopify?
Ready to move your Shopify store to the next level? Check out the articles below:
- Shopify Academy: The 7 Best Free Online Ecommerce Courses
- The 15 Most Popular Shopify Apps in 2024 (Backed by Data)
- Fake Shopify Sales: How to Spot Them & Know if They Are Legit
Plus, don’t forget to check out our in-depth how to start a Shopify store guide here.
