Preheat your oven to 350 degrees F and line a 9x9 baking pan with parchment paper. Set aside.
Spread the shredded coconut onto a baking sheet and bake at 350 F for 10 minutes tossing halfway through (this can burn quickly so watch it closely).
In a large mixing bowl, combine softened butter, granulated sugar, vanilla extract, and flour. It’ll seem dry and crumbly at first but mix until a dough forms.
Press the dough into the bottom of your prepared baking pan and bake for 15-18 minutes. Let cool.
In a microwave safe bowl, combine caramels and heavy cream. Microwave for 2 minutes, stirring in intervals of 30 seconds until the caramel is melted and smooth.
Pour the toasted coconut into the caramel and mix to combine. Spread the coconut mixture on top of the shortbread, then let cool completely.
Slice into 12 bars, then transfer them to another baking sheet lined with parchment paper. Melt your chocolate in the microwave for 1 minute, stirring halfway through or just until smooth.
Dip the bottom of each bar into the chocolate and return to the baking sheet. Transfer the remaining chocolate to a Ziploc bag, cut off the end, and drizzle over the top of the bars.
Transfer to the fridge to let the chocolate set before enjoying.