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

Managing Risk While Preserving Trust

When SHIPAID flags a claim as high fraud risk, you stay in control of the decision. You can deny, approve, or manually review each claim based on the score and your policies.

For high value or high risk categories, most merchants deny high risk claims by default while using a more flexible approach for medium risk scenarios.

How Risk Levels Work

SHIPAID assigns a fraud risk score to each claim using behavioral signals, order data, and network intelligence.

Risk levels typically fall into three groups:

• High risk: clear abuse patterns, suspicious details, or known fraud signals
• Medium risk: incomplete data or edge cases with some uncertainty
• Low risk: clean history and no obvious red flags

You see this score in the SHIPAID dashboard and, if integrated, inside tools like Gorgias.

Best Practices By Risk Level

High risk claims

Recommended: deny the claim.

For high value products or accounts flagged for abuse, denying high risk claims protects your margins and discourages repeat attempts.

You can follow up with a clear explanation or request for additional verification if you want to give genuine customers a path forward.

Medium risk claims

Recommended: consider approving the first claim, especially at moderate order values.

Many merchants choose to give new customers the benefit of the doubt once, while watching for patterns over time. This balances protection and goodwill.

Low risk claims

Recommended: approve quickly and consistently.

These are often honest issues or one off problems and are a strong opportunity to build loyalty through fast, helpful resolutions.

How This Supports Your Business

Reduce fraud losses

High risk claims often involve repeat abusers or stolen credentials. Denying them early reduces unnecessary refunds and replacements.

Protect average order value

Brands selling high ticket or luxury items are prime fraud targets. Strong policies around high risk claims preserve profitability.

Improve customer lifetime value

Thoughtful handling of medium and low risk claims shows legitimate customers that your brand is fair and responsive. That encourages repeat purchases.

Maintain operational efficiency

Automated risk scoring lets your team prioritize. They spend less time on clearly fraudulent claims and more time helping good customers.

Real World Example

An electronics merchant selling premium accessories saw an increase in fraudulent claims on high value orders. By configuring SHIPAID to:

• Auto deny high risk claims
• Auto approve low risk claims

They reduced fraud related payouts and cut claim review time significantly.

Final Thoughts

When a high risk claim comes in, SHIPAID gives you the insight to act quickly and confidently. Denying clearly risky claims and handling medium and low risk cases thoughtfully helps protect your brand, your margins, and your loyal customers.

If you want help setting thresholds or building resolution policies, our team can share best practices based on your category and order profile.

Updated on: 03/12/2025