How long can Stripe legally hold my funds?

Stripe's terms allow holds 'as reasonably necessary,' but California's implied covenant of good faith limits this. Holds beyond 120 days without specific, documented risk justification are vulnerable to legal challenge. Most legitimate holds should be resolved within 90-120 days.

How do I get my money back from Stripe?

Send a formal demand letter citing California Business & Professions Code 17200 and breach of the implied covenant of good faith. Include an AAA arbitration notice giving Stripe 30 days to respond (required by their terms). About 85% of cases resolve after receiving a proper demand letter with arbitration notice.

Can Stripe close my account and keep my money?

Stripe can close your account at any time under Section 6.1(b) of their terms. However, account closure is separate from fund withholding. They cannot hold your funds indefinitely without documented justification. Indefinite retention may constitute conversion under California law.

What is the success rate of arbitration against Stripe?

Success rates vary by approach: support tickets only have about 30% success rate, formal demand letters about 65%, demand letters with arbitration notice about 85%, and filed AAA arbitration about 90%. Most cases settle before the actual arbitration hearing.

How much does it cost to file arbitration against Stripe?

AAA filing fees range from $925 for claims under $75,000 to $2,900+ for larger claims. However, most cases resolve after the demand letter stage before any arbitration fees are paid. Stripe's legal costs for arbitration exceed $10,000, which incentivizes settlement.

Can I sue Stripe in small claims court instead of arbitration?

Possibly. Many arbitration clauses include small claims exceptions. Check Section 13.2 of your Stripe Services Agreement. For most merchants with claims over the small claims limit, arbitration with proper documentation is more effective.

What is the 30-day notice requirement for Stripe arbitration?

Section 13.3(a) of Stripe's terms requires you to send written notice at least 30 days before filing arbitration. This notice must be sent to Stripe Legal at 354 Oyster Point Blvd, South San Francisco, CA 94080. Failure to provide proper notice can result in procedural dismissal of your arbitration.

Will Stripe blacklist me from other payment processors?

No evidence exists that Stripe shares information about merchants who pursue legal action. Payment processors make independent risk determinations. Merchants who have filed arbitration against Stripe report no difficulty obtaining services from other processors.

Should I attach all my evidence to the email I send to Stripe?

No. Send your signed demand letter via USPS Certified Mail (primary delivery method) and email a copy to support@stripe.com as a courtesy notification. Evidence is referenced in the letter but not attached — you present evidence during arbitration if needed. The certified mail provides legal proof of delivery.

What if Stripe doesn't respond to my demand letter within 30 days?

If you receive no response or an unsatisfactory response after the 30-day notice period, you can file your AAA arbitration demand at adr.org. About 90% of cases resolve after filing, usually before the actual hearing. Filing fee is $925 for claims under $75,000.

Stripe Froze Your Money? Here's How to Get It Back (2026 Legal Guide + Generator)

Action Taken	Resolution Time	Success Rate
Support ticket only	90-180+ days	~30%
Formal demand letter	30-60 days	~65%
Demand + Arbitration notice	14-45 days	~85%
Filed AAA arbitration	60-120 days	~90%

Stripe Fund Hold Patterns

🔴 Indefinite Holds

Account terminated with funds held "for up to 120 days" that extends indefinitely.

🟠 Shifting Timelines

Promised payout dates keep changing with vague explanations.

🟠 High Risk Label

Business retroactively labeled "high risk" after months of normal processing.

🔵 Communication Blackout

Support becomes unreachable. Canned responses, ignored emails.

Indefinite Fund Holds Following Account Termination ▼

The most frustrating pattern: Stripe terminates your account and states funds will be held for "up to 120 days," but that timeline keeps extending.

Initial notice says funds held for 90-120 days
At 120 days, generic email says "additional review needed"
No specific release date ever provided
Funds remain frozen for 180+ days in some cases

Why This Matters Legally: Indefinite retention without specific justification may exceed what's contractually permitted and could constitute conversion under California law.

Shifting Payout Timelines ▼

Day 0

"Funds will be held for 90 days for review"

Day 85

"Extended to 120 days due to elevated risk"

Day 115

"Additional 90 days required for ongoing review"

Day 200+

"We'll notify you when funds are available"

Retroactive "High Risk" Designations ▼

Stripe suddenly designates a business as "high risk" after processing payments normally for months, despite no disputes or chargebacks.

How to counter: Document your actual chargeback rate, customer satisfaction metrics, and compliance history. Most merchants who challenge this designation discover Stripe's "high risk" label lacks supporting evidence.

📚 Real Case Patterns We've Seen

These patterns come from actual client cases. Understanding them helps you recognize what you're dealing with and build stronger arguments.

🕑 Year-Long Holds Without Explanation ▼

Some merchants have funds held for 6-12+ months with Stripe refusing to specify which rule or policy was violated. When pressed, support simply says the account is "under review" indefinitely.

Why This Is Actionable: Indefinite holds without specific justification are egregious. Stripe's SSA authorizes "reserves" for risk management, not permanent confiscation. After a year, if Stripe still can't articulate what rule you violated, they likely have no legitimate basis.

Strategy: Demand specific policy citations: "Which EXACT rule did I violate and when?" Document every communication attempt and non-response. Calculate interest at California's 10% annual rate. This timeline makes conversion claims much stronger.

🏠 Property Management & Travel Industry Disputes ▼

Property managers using Stripe for Airbnb/VRBO bookings often face 5-15% dispute rates—not because of fraud, but because of guest complaints, cancellations, and property issues. Stripe sometimes treats this as "high risk" even though it's industry standard.

Key arguments:

Stripe approved your account knowing your business type
Your rate is normal for the sector—compare to industry benchmarks, not e-commerce averages
Disputes from guest dissatisfaction ≠ fraud
If other property managers on Stripe have similar rates, you're not an outlier

Resolution Example: One property management client with a 10% dispute rate got payouts resumed with a 25% rolling reserve for 60 days—a reasonable compromise that kept the business operational.

💸 Stripe Refunding Customers Without Authorization ▼

We've seen cases where Stripe refunded $50,000-$150,000+ to customers without the merchant's authorization. In one case, Stripe refunded $128,000 to vacation rental guests who had already completed their stays.

Recovery options:

Option A - Fight Active Disputes: If any are actually disputes (still in lifecycle), you can win them back via representment with evidence of completed service.
Option B - Guest Repayment: For completed stays/services where guests received a windfall refund:
- Send polite outreach: "Our payment processor issued a mistaken refund after your completed stay"
- Attach proof: reservation confirmation, check-in/out records
- Provide easy repayment method (PayPal invoice, Zelle, bank transfer)
- Prioritize by amount—start with largest refunds first
- Small claims court for unresponsive guests with large amounts

Note: Stripe's unauthorized mass refunding without merchant consent is potential evidence of bad faith for your main arbitration claim.

🔐 Account Hacking & Negative Balances ▼

When hackers steal funds via fraudulent instant payouts, Stripe often creates a negative balance—claiming the merchant owes money for "overpayments." In one case, a hacker stole $99,950 via 10 instant payouts, and Stripe's systems allowed payouts $40,000 beyond the available balance.

Strong argument: If Stripe's systems allowed payouts exceeding your total available funds (including pending balances), that's a STRIPE SYSTEM FAILURE, not your responsibility.

Payment processors must maintain proper balance controls
You can only be liable for funds that were actually yours
If Stripe "advanced" funds beyond your balance and those were stolen, that's Stripe's risk
This is a potential counterclaim against Stripe in arbitration

Documentation issue: Stripe often refuses to provide formal documentation for insurance claims. Send a formal demand for: all payout records (IDs, amounts, destinations), bank correspondence about recovery attempts, and formal statement of funds status. If they continue refusing, this becomes part of your arbitration claim.

✅ Rolling Reserve Resolutions ▼

Many cases resolve with a compromise rather than full immediate release. Common resolution: payouts resume with a 25% rolling reserve for 60-90 days, remaining 75% pays out on normal schedule.

When to accept:

Your dispute rate is genuinely elevated (even if industry-normal)
You need cash flow restored quickly
The reserve percentage and duration are reasonable
Prolonged litigation isn't worth it for your situation

Key Point: Get any resolution in WRITING before stopping legal pressure. Don't accept verbal promises. A rolling reserve that gets you back to operating is often the practical "win."

📰 Recent News & Developments (2025-2026)

🚨 Flipcause Collapse: $29M Owed to Nonprofits, Stripe Holding $1.45M ▼

In December 2025, donation platform Flipcause filed for Chapter 11 bankruptcy, revealing it owes $29 million to over 3,200 nonprofits for donations never transferred.

The Stripe connection: Stripe froze $1.45 million of Flipcause's funds until February 28, 2026, citing "elevated risk." When Flipcause asked the bankruptcy court to release approximately $790,000, Stripe filed a 13-page objection, arguing it faces up to $6 million in potential chargebacks and fines.

Key Takeaway: This case shows how Stripe's fund holds can cascade into larger disasters—and how aggressively Stripe will fight to keep frozen funds even in bankruptcy proceedings.

Sources: Oakland Voices | SFGate

🏢 Bank Charter Opposition: "History of Legal Trouble" ▼

In late 2025, four major organizations opposed Stripe's application for a national trust bank charter with the OCC:

National Community Reinvestment Coalition (NCRC): Said charter would give Stripe "legitimacy it does not deserve" and cited Stripe's "history of legal trouble"
Independent Community Bankers of America (ICBA): Called the application "dangerous regulatory arbitrage"
Bank Policy Institute (BPI): Warned approval could "significantly increase risks to the U.S. financial system"

Why This Matters: The opposition letters cite Stripe's track record with merchants. This public scrutiny may create additional pressure on Stripe to improve its fund-holding practices.

🇬🇧 UK Regulation: 90-Day Termination Notice (April 2026) ▼

Starting April 28, 2026, new UK regulations will require payment service providers to give merchants 90 days' notice before terminating accounts and provide sufficiently detailed explanations for termination decisions.

This follows findings that payment processor failures have historically left merchants with settlement fund shortfalls averaging 65%.

US Implications: While this is UK-specific, it sets a precedent. US merchants can argue that sudden terminations without explanation violate the implied covenant of good faith—especially when citing international standards.

📊 BBB Complaints Spike (2024-2025) ▼

The BBB complaint page for Stripe shows consistent patterns:

May 2025: Funds held 6+ months after October 2024 freeze, "without any clear communication or resolution"
June 2025: Account closed, $16,448 held. Originally promised release by October 2025, then extended to January 2026. After January passed, Stripe stopped responding.
Pattern: Promised release dates that keep extending indefinitely

💬 Community Discussions & External Resources

These experiences aren't isolated. Here are some notable public discussions from merchants facing similar issues:

🔥 Hacker News Threads

Stripe Ignoring Legal Letters and Holding $800k+ (July 2025) — Funds held since December 2024, 8+ months with zero resolution
Stripe holding over $400k with no explanation [resolved] — Only resolved after HN front page exposure
Stripe Shutdown Our Nonprofit's Account, Holding $12k in Donations Hostage
Stripe has decided to nuke my entire business
Stripe Is Holding 25% of Our Funds, Indefinitely

💬 Reddit Patterns (2024-2025)

$130,000 frozen — User reported Stripe froze funds for "rising dispute rate," but disputes only arose because Stripe held funds, preventing order fulfillment. Classic Catch-22.
"High risk" with zero disputes — Account suddenly closed, told to wait 120 days, then kept getting "new reasons to wait indefinitely"
Support blackout — After freezing, Stripe disabled phone/chat support, leaving only email (which went unanswered)
Analysis of Stripe feedback found "locked accounts" and "frozen funds" dominate public complaints

🌐 Other Resources

Stripe BBB Complaints — Official complaint records with Stripe responses
Stripe Reviews on Trustpilot — Search "frozen" or "hold" in reviews
Change.org Petition: Demand Justice for Unlawful Withholding
Stripe's Official Arbitration Terms (know what you're working with)
Stripe Payment Processing Litigation — Law firm specializing in Stripe disputes

Note from Sergei: I'm linking to these threads because they document real merchant experiences. Every case is different — some merchants may have violated Stripe's terms, others got caught in automated systems. The generator above helps you make your specific case as strong as possible.

Section	What It Says	Legal Limitation
6.1(b)	Allows termination "at any time"	Does NOT authorize indefinite fund withholding
6.2(i)	Permits suspension for "credit risk"	Risk assessment must be reasonable
5.4	Can change payout schedule	Limited by good faith obligation
13.2	Requires binding arbitration	Cannot file lawsuit in court
13.3(a) Critical	30-day notice before arbitration	MANDATORY - failure = dismissal

Step-by-Step Process

🗺 Action Plan ▼

Step 1: Document Everything

Gather account history, communications, dispute rates, and damage documentation.

Step 2: Generate Documents

Use the Generator tab to create your demand letter and arbitration demand.

Step 3: Send Via Certified Mail

Mail to: Stripe Legal, 354 Oyster Point Blvd, South San Francisco, CA 94080

Step 4: Wait 30 Days

SSA requires 30-day notice before filing arbitration.

Step 5: File Arbitration (If Needed)

If Stripe hasn't resolved, file with AAA. Most cases settle before hearing.

⚠ Critical: 30-Day Notice Requirement ▼

Section 13.3(a) requires notice at least 30 days before filing arbitration. Failing to provide this notice can result in procedural dismissal.

The generator automatically includes proper 30-day notice language in your demand letter.

✅ After You Send: What Happens Next ▼

You've generated and sent your demand letter. Here's exactly what to expect:

Day 0 — Send Your Letter

Mail the signed letter via USPS Certified Mail, Return Receipt Requested to Stripe Legal at 354 Oyster Point Blvd, South San Francisco, CA 94080. Also email a copy to support@stripe.com with subject "ATTN: Legal Department - Arbitration Notice". The certified mail is your legal proof; the email is a courtesy notification.

Days 1-30 — Mandatory Notice Period

Per Stripe's Service Agreement Section 13.3(a), you must wait 30 days before filing arbitration. Many cases resolve during this period (~65% with demand letter alone, ~85% when arbitration notice is included). Stripe's legal team reviews the demand and often reaches out to negotiate.

If Stripe Responds Positively

Negotiate the terms of fund release. Get any agreements in writing. If they offer partial release, consider whether to accept or proceed with arbitration for the full amount. Document all communications.

Day 31+ — No Response? File AAA Arbitration

If Stripe ignores your demand or refuses to release funds, file your AAA arbitration demand at adr.org. Filing fee: $925 for claims under $75K (expedited procedures). Resolution rate jumps to ~90% after filing. Most cases settle before the hearing.

Key Point: The demand letter with arbitration notice is your primary leverage. Stripe knows that defending an arbitration costs them $10,000+ in legal fees regardless of outcome. Most cases settle during the 30-day notice period or shortly after filing.

💬 Common Questions After Sending ▼

Should I attach all my evidence to the email? ▼

No. The certified mail package should include your signed demand letter only. Evidence is referenced in the letter but typically not attached — you present evidence during arbitration if needed. The email to Stripe is just a courtesy notification, not the official delivery method.

What if Stripe doesn't respond within 30 days? ▼

If you receive no response or an unsatisfactory response after 30 days, file your AAA arbitration demand at adr.org. The arbitration demand document (if you included it in the generator) is ready to submit. This significantly increases pressure — about 90% of cases resolve after filing.

How much does AAA arbitration cost if I need to file? ▼

Initial filing fee is $925 for claims under $75,000 (expedited procedures). For larger claims, fees range from $1,925-$2,900+ depending on amount. However, most cases settle after filing but before the hearing — so you often don't pay the full arbitration costs. You can also request fee reimbursement from Stripe if you prevail.

Can I handle this myself or do I need a lawyer? ▼

Many merchants successfully resolve Stripe disputes without an attorney using this demand letter and arbitration process. AAA arbitration is designed to be accessible to individuals (pro se). For complex cases or amounts over $50,000, consulting with an attorney familiar with payment processor disputes can be beneficial.

What's the success rate for getting funds released? ▼

Based on reported outcomes: Support tickets alone ~30%. Formal demand letters ~65%. Demand letter + arbitration notice ~85%. Filed AAA arbitration ~90%. The key is escalating through proper legal channels rather than relying on customer support.

Option	Your Cost	Stripe's Cost	Success
Demand letter only	$29.95	Legal review	~65%
Demand + Arb notice	$29.95	Legal + response prep	~85%
File with AAA	$925-2,900+	$10,000+ legal fees	~90%

Claim Amount	Initial Fee	Final Fee
Under $75,000	$925	$800
$75,000 - $150,000	$1,925	$1,375
$150,000 - $300,000	$2,900	$2,200

Stripe Froze Your Money? Get It Back.

Stripe Fund Hold Patterns

📚 Real Case Patterns We've Seen

📰 Recent News & Developments (2025-2026)

💬 Community Discussions & External Resources

Legal Framework

Step-by-Step Process

Costs & Fees

Frequently Asked Questions

After Sending Your Demand Letter

Need Legal Assistance?