BOPIS Chargebacks

Brick-and-mortar stores and ecommerce sites each have their own special advantages. When you’re shopping in person, you get to take your purchase home right away, but nothing beats the convenience of browsing at your leisure online. Not surprisingly, retailers have figured out how to combine them both into an incredibly popular new shopping trend: Buy Online, Pick-up In Store, or BOPIS.

Shoppers love the convenience of BOPIS, and that means higher sales for merchants, but there’s a catch—BOPIS is a magnet for fraud. How can merchants use BOPIS to their best advantage while avoiding the increased threat of fraud and chargebacks?

Like many trends that have become the new normal in the past few years, BOPIS got a big boost due to the COVID-19 pandemic. With store closures and social distancing guidelines in effect, many consumers were looking for ways to carry out their usual shopping activities without going out and risking exposure to coronavirus. One solution that took off quickly was BOPIS, which allowed shoppers to make their purchases online, then pick them up with a quick trip to the store.

Many stores would even offer curbside pick-up, bringing purchased goods right to the customer’s car so they wouldn’t have to enter the store at all.

Even once the pandemic restrictions were rolled back, a lot of consumers—and merchants—were in no hurry to get rid of BOPIS. In fact, 64% of consumers who use BOPIS say they use it more often now than they did during the height of the pandemic. Smart merchants know that the key to continued success is to give their customers what they want, which means continuing to offer BOPIS despite the fact that fraudsters were quick to identify its vulnerabilities and hit it hard.

What Is BOPIS?

BOPIS is a shopping experience that merchants with both an online and a brick-and-mortar presence can offer to their customers. In a BOPIS purchase, the customer shops for their goods and pays for them online, but instead of shipping the order to the customer, the merchant holds it in-store for the customer to pick up.

It’s up to the store to determine exactly what the pick-up process is like. Goods can be picked up at a cashier or at a dedicated customer service counter, if the store has one. Some stores offer curbside pick-up and will bring the goods out to the customer when they arrive. Some large retailers, such as Amazon, even have self-service BOPIS lockers.

What Are the Benefits of BOPIS?

One of the biggest advantages of BOPIS is that it gets shoppers into your store, where some of them—as many as 85%, according to one survey—will end up making additional purchases. This means that BOPIS can have a direct and positive impact on your sales revenue, which is one of the greatest benefits any merchant could hope for.

Even when shoppers aren’t making impulse purchases, it’s important to address their needs and provide them with a satisfying shopping experience.

Consumers like BOPIS for a number of reasons—it allows them to avoid paying for shipping, skip long checkout lines, and receive their goods faster than waiting for home delivery. But the main reason, cited by 50% of BOPIS shoppers, is that they find it convenient. Giving consumers the options they want keeps them happy and builds loyalty, increasing the chance that they’ll become repeat customers.

How Can BOPIS Lead to Chargebacks?

The downside of BOPIS is that it is vulnerable to fraud on multiple levels. BOPIS transactions have a 7% attempted fraud rate, compared to 4.6% for other purchasing methods.

One of the biggest risks is that somebody other than the purchaser will walk into the store and pick up their order. A fraudster doesn’t necessarily even need to know who ordered what in order to pull this off—they just walk in and use social engineering to convince a store employee to hand over the goods. When this happens, the real customer will usually end up filing a chargeback on the grounds that they never received their purchased goods.

Fraudsters also like to use BOPIS in combination with account takeover attacks or credit card fraud. One of the big challenges for fraudsters is finding a way to pick up the goods they’ve ordered with their victim’s money.

They can provide their own shipping address, but this can send up red flags to the merchant. With BOPIS, they can walk in, pick up their order, and go. In this case, the victimized cardholder will file a true fraud chargeback when they notice the unauthorized transaction.

Friendly fraudsters also take advantage of BOPIS. It’s easy for them to claim that they never received the goods they picked up, and it can be difficult for the merchant to prove that they handed the goods over to the right person.

How Can Merchants Prevent BOPIS Chargebacks?

One thing that all of the chargeback scenarios we just described have in common is that they’re much harder to pull off when the merchant checks the ID of the person picking up the BOPIS order. Since it is possible for fraudsters to use fake IDs, merchants can increase security even further by requiring customers to show proof of purchase when they come to pick up their order, such as a confirmation screen on their mobile device. Safeguards like these can stop a large percentage of fraud attempts.

It’s also important to deploy strong anti-fraud protections for your online checkout process. AI tools and fraud filters can catch and block fraud at the point of sale, saving you the time and trouble of fulfilling a fraudulent order.


For merchants, BOPIS can be a practice that carries risks as well as rewards. It leads to higher sales and increased customer loyalty, but at the cost of additional fraud and chargebacks.

Merchants should look for ways to increase the security of their BOPIS procedures, especially the final pick-up, which will be both cost-effective and acceptable to their customers.

If you’e an independent sandwich shop, you probably aren’t going to install smart lockers, but it might make sense to ask for ID instead of leaving orders out on the counter for anyone to grab. By striking the right balance between security and convenience, you can develop a BOPIS strategy that doesn’t drive up your chargeback rate.

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