Shopify
Improving the claim and dispute experience between merchants and their customers
Role
Product Design
Year
2021
As part of the Payments and Risk team, I was responsible for working with merchants to prevent, manage, and dispute chargebacks. A chargeback occurs when a customer disputes a transaction with their bank, resulting in a refund to the customer and an additional fee for the merchant. While chargebacks can happen for various reasons, this project focused solely on product-related disputes. Examples of product-related disputes include receiving damaged or defective items, incorrect orders, or products that do not meet customer expectations.
01
The research
One of Shopify's great strengths is the empowerment given to its employees through access to data. With basic SQL knowledge, any team member, regardless of role or seniority, could extract key metrics, allowing for data-driven decision-making at any point. Using Mode, I delved into data to better understand how chargebacks were impacting merchants on the platform. However, fully grasping the complexities of chargebacks required months of mapping out the entire process. The chargeback process are a highly opaque process, involving multiple parties and scenarios, which made it particularly challenging to navigate. However, this was essential to uncover the deeper issues merchants were facing.
In addition to the data analysis, I conducted five in-depth, semi-structured interviews with Shopify merchants. These interviews helped us gain direct insights into their frustrations with chargebacks, particularly how the lack of clear communication between merchants and customers exacerbated product-related disputes. With the support of Shopify’s user research team, I transcribed and analysed these interviews using Dovetail, ensuring both quantitative and qualitative insights drove our understanding of the problem space.
02
The findings
Based on our research, we identified the following as the main issues:
In 2020, the average number of monthly chargebacks per shop (for shops that have chargebacks) was 3.89
Shopify's chargeback win rate is just below 20%, way below industry-standard
Merchants are more likely to win a chargeback when they manually supplied supporting evidence rather than relying on Shopify’s automated responses
Product-related disputes made up for 41.8% of all chargebacks
The existing customer-merchant communication tools being overly generic further exacerbates the chargeback issue.
03
The hypothesis
04
Design approach
Customers use the Shopify Inbox chatbot to file in a complaint regarding an order. The process is designed to capture all the information a merchant might requires to take action.
The claim appears as a new conversation in Shopify Inbox
The dispute has effects throughout the merchant's dashboard.