Is there a way to overcome this issue?

Last Thursday I received a call from a woman who told me that an order placed just minutes before was fraudulent. The order was listed to be picked up at my shop. The police officer did not believe this person was going to pick it up but asked me to keep the order open until the next day and said he would make himself available if this person came. When the person did not show I immediately cancelled the order and refunded the woman. Fast forward to Saturday morning. There are now flags all over her order saying chargeback and fraudulent order (also the refund I put in never went through and was cancelled by Shopify). This one fraudulent order can put me over 1% for 6 months. I sell to a niche market that does not buy much but are more than willing to pay good for the best quality. The Shop App brings in 65% of my customers.

During the same 2 hour chat conversation I was provided with so much BS, including that I should have done exactly what I did and cancel the order. It later went to this "special team" who then told me Shopify Protect only covers orders that are fulfilled and shipped. So if I had shipped this order he same day, the way I often do I would have supposedly been covered. Shopify had originally had this order flagged as low risk of fraud. Note: at this point my they have my response but I am concerned. I want to be proactive if I can. I don't want to wait for them to deny my response and kick me out of the Shop App.

My two questions are is there any way to challenge this with Shopify? Has anyone had something similar that has resulted in a win? Next, this 1% of sales, is that based just on 1% of sales through the Shop App or 1% of sales total for my store. I am kind of safe if it is the total of sales from my store including sales that I bring in just from repeat customers but if it is 1% of sales just from the Shop App I think I am done for.

In the almost 5 years I have been doing this I have had no chargebacks so this is na area where I have no experience. I have been searching for info through all the "help" stuff Shopify offers but haven't found anything useful. Any insight would be greatly appreciated. Thanks