What Do Merchants Typically Do If a Customer Has High Fraud Risk?

Best Practices for Managing Risk While Preserving Customer Trust
When ShipAid identifies a high fraud risk score on a claim, you remain in full control of how to respond. Merchants can choose to deny, approve, or manually review each claim based on the risk level and customer behavior.
Best practice for most high-AOV or high-risk categories is to deny high-risk claims immediately, while remaining flexible with medium-risk scenarios depending on claim history.

How Risk Levels Are Scored

ShipAid assigns every claim a fraud risk score based on behavioral patterns, order data, and intelligence from our global merchant network.

Risk Levels Typically Fall Into Three Categories:

High Risk: Repeat abuser patterns, suspicious claim details, or known fraud signals
Medium Risk: New customer or edge-case data without clear fraud evidence
Low Risk: No red flags, clean order history, and trustworthy behavior
This score appears automatically in your dashboard or Gorgias view, helping your team make faster, data-driven decisions.

Best Practices Based on Risk Level

High-Risk Claims
Recommendation: Deny the claim.
For high-AOV products or accounts flagged for abuse, denying the claim protects your margins and discourages future fraud attempts.
You can pair this with a follow-up message offering clarification, additional verification steps, or escalation paths for genuine customers.

Medium-Risk Claims

Recommendation: Consider approving the first claim.
If the customer is new or the order value is moderate, some merchants choose to give the benefit of the doubt for the first claim, while monitoring for patterns over time.
This approach balances customer goodwill with fraud prevention and can help protect long-term brand trust.

Low-Risk Claims

Recommendation: Approve automatically or quickly with confidence.
These are often honest mistakes or one-off issues and are a chance to build goodwill and drive loyalty.

How This Supports Business Goals

Reduce Fraud Losses
High-risk claims often involve repeat patterns or stolen identities. Denying these early helps prevent unnecessary refunds and revenue leakage.

Protect Average Order Value (AOV)

Luxury and high-ticket brands are more susceptible to fraud. Blocking bad actors preserves profitability.

Improve Customer Lifetime Value (LTV)

Being thoughtful about medium-risk claims shows new customers that your brand is fair and proactive, encouraging repeat business.

Maintain Operational Efficiency

ShipAid flags risk levels so your team spends less time investigating and more time supporting loyal customers.

Real-World Use Case

Electronics Retailer
A merchant selling premium accessories saw a spike in fraudulent claims tied to high-value orders. By setting ShipAid to auto-deny high-risk claims and auto-approve low-risk ones, they reduced fraud-related payouts by 42 percent and cut claim review time in half.

Final Thoughts

When a customer submits a high-risk claim, ShipAid gives you the data to respond confidently and quickly. Denying claims tied to suspicious behavior helps protect your brand, your bottom line, and your loyal customers.
Want help configuring your fraud thresholds and resolution policies?
We can walk you through setup and share recommendations based on your vertical and order profile.

Updated on: 27/05/2025