3.7 - Monitoring Payment Status & Ensuring Fulfillment Safety in E-commerce (Difficulty: Beginner | Path: Launch)

Understanding Your Risk Matrix & Flags

What is it? Your payment processor (like Shopify Payments) automatically runs a fraud analysis on every order and gives you a simple 'risk level': Low, Medium, or High. This is based on 'flags' like AVS (billing address) mismatches, CVV (security code) failures, or if the shipping address is far from the billing address.

Why is it important? This is your automated warning system. Ignoring a 'High Risk' flag is the fastest way to lose money. You'll ship a product, and the real cardholder (whose card was stolen) will file a chargeback. You will lose the product, the shipping cost, *and* the original payment.

Understanding the Risk Levels

• Low Risk: All checks passed (AVS, CVV, etc.). You are generally safe to fulfill the order.
• Medium Risk: One or two things don't match (e.g., CVV passed but the AVS (zip code) failed). This requires a quick manual review (see 3.8.1). It's often a customer typo or a gift.
• High Risk: Multiple major flags failed (e.g., AVS, CVV, and IP address are all from different countries). You should not fulfill this order without further investigation, and you should probably cancel it.

Beginner's Best Practice

For your first 30 days, set your payment capture to 'manual'. This means you have to manually approve every order. This forces you to look at the fraud analysis for every single sale, which is the best way to train yourself to spot patterns *before* you automate fulfillment and risk losses.