Shopify Payments suspended - $12K frozen, chargeback rate at 1.2%

Im freaking out right now. Woke up this morning to an email saying my Shopify Payments account is suspended and theyre holding $12,847 in my balance. No warning, nothing.

Background: I run a dropshipping store selling phone accessories. Been on Shopify for 8 months, averaging $15-20K/month in sales. I know my chargeback rate got a bit high last month (1.2%) because of some shipping delays from my supplier during the holidays.

The email says my funds are "under review" and could be held for up to 120 days. They mentioned "elevated risk" and pointed to their acceptable use policy.

What are my options here? This is money I need for inventory and I have bills to pay. Can they really just hold my money for 4 months? Has anyone gotten their account reinstated after something like this?

I handle e-commerce payment disputes regularly. Let me explain what's happening and what your options are.

First, important context: Shopify Payments is actually powered by Stripe on the backend. When you signed up for Shopify Payments, you agreed to both Shopify's terms AND Stripe's terms. This matters because Stripe's risk policies are what's driving this decision.

Why this happened:

• 1.2% chargeback rate exceeds Visa/Mastercard thresholds (typically 0.9-1%)
• Dropshipping is considered "high risk" by payment processors
• Holiday shipping delays + chargebacks = automatic risk flags

Can they hold your funds for 120 days? Yes, unfortunately. Under their terms of service, they can hold funds in a "reserve" to cover potential chargebacks and refunds. The 120-day period aligns with the chargeback window for card networks.

Your options:

1. Appeal immediately - provide documentation showing you've addressed the chargeback issue
2. If Shopify won't budge, you may need to deal with Stripe directly since they're the actual payment facilitator
3. For significant amounts, a formal demand letter can sometimes accelerate the review process

Check out the Stripe funds demand letter template - since Shopify uses Stripe's infrastructure, the same legal principles apply. There's also a full list of platform dispute templates that might be helpful.

Been thru this exact situation last year. Got my account reinstated after about 3 weeks. Heres what worked for me:

Documentation I provided:

• Spreadsheet showing every chargeback with reason codes and how I resolved them
• Proof that I switched suppliers to one with faster shipping (new contract)
• Updated refund policy showing I now offer hassle-free refunds instead of letting things go to chargeback
• Screenshots of improved customer service response times
• Letter explaining the shipping delays were a one-time holiday issue

The key is showing them you understand WHY the chargebacks happened and have taken concrete steps to fix it. They dont want to lose merchants - they want to reduce risk.

I also added chargeback alerts through Ethoca and Verifi - costs like $40/month but lets you refund disputes before they become chargebacks. Mentioned this in my appeal and I think it helped.

They released about 70% of my funds after 3 weeks, then the rest after another month when my chargeback rate dropped below 0.5%.

Just want to add a warning here that a lot of people dont realize - Shopify Payments IS Stripe. Same backend, same risk algorithms, same holds.

So if you get banned from Shopify Payments, you're essentially banned from Stripe too. Dont try to open a regular Stripe account after - they'll flag you immediately since its the same system.

I learned this the hard way. Got suspended from Shopify Payments, tried to set up standalone Stripe, got approved for like 2 days then shut down with a message saying I was "associated with a previously terminated account."

Also worth noting: if you had a Stripe account before and it got terminated, you probably wont be able to use Shopify Payments either. They share data.

@DropshipDan - dont do anything that could get you permabanned from the Stripe ecosystem. Appeal properly, be patient. Having access to Stripe/Shopify Payments is valuable long-term.

I went a diffrent route - kept my Shopify store but switched to a third party payment processor while waiting for Shopify Payments to release my funds.

What I did:

• Signed up with PaymentCloud - they specialize in "high risk" merchants including dropshipping
• Higher fees (around 3.5% + $0.25 vs Shopify's 2.9%) but at least I could keep processing orders
• They integrated fine with Shopify using their gateway
• Also set up a PayPal Business account as backup

Took about a week to get approved since they do manual underwriting. Had to provide 3 months of processing statements, business license, and some other docs.

Not ideal long term becuase of the fees but it kept my business running while the Shopify Payments stuff got sorted out. Eventually got my funds released after 90 days (they wouldnt reinstate the account tho).

Other processors that work with Shopify and accept higher-risk merchants: Durango Merchant Services, Host Merchant Services, and eMerchantBroker. Just do your research on fees.

Update: I followed the advice here and put together a detailed appeal package. Also looked into the demand letter stuff that @MarcusLegal_Ecom mentioned.

Sent everything to Shopify support with:

• Full breakdown of each chargeback and resolution
• New supplier agreement with guaranteed 5-7 day shipping
• Changed return policy to 30 day no questions asked
• Signed up for chargeback alerts

Also cc'd their legal team and mentioned I was prepared to send a formal demand letter if we couldn't resolve this reasonably. Not sure if that helped or hurt lol

They responded saying my case is "under expedited review." Fingers crossed. Will update when I hear more.

In the meantime I set up PayPal checkout as a backup so at least new orders are processing. The fees suck but its something.

Just want to share my success story since I know how stressful this is. Similar situation - $18K frozen, 1.4% chargeback rate from a bad batch of products that had quality issues.

My timeline:

• Day 1: Account suspended, funds frozen
• Day 3: Submitted initial appeal with documentation
• Day 7: Got generic "under review" response
• Day 14: Sent follow-up with additional evidence + mentioned consulting with attorney
• Day 18: Received call from Shopify risk team asking for clarification
• Day 21: Account reinstated with 20% rolling reserve for 90 days
• Day 25: Initial frozen funds released (minus the reserve)
• Day 112: Rolling reserve ended, full access restored

What I think made the difference:

1. Proactively refunded ALL pending disputes before they became chargebacks - cost me about $800 but worth it
2. Provided tracking numbers and delivery confirmation for disputed orders
3. Showed them my new quality control process with the manufacturer
4. Was professional and non-confrontational in all communications
5. Followed up consistently but not aggressively (once per week)

The rolling reserve sucked but at least I could operate. And after 90 days of clean processing it went away completely.

@DropshipDan - stay positive, document everything, and be patient. Most merchants who put in the effort do get reinstated eventually. The ones who dont are usually the ones who actually were doing sketchy stuff.

FINAL UPDATE - Got my money back!

Took about 2.5 weeks total. Heres exactly what happened:

• They reinstated my account with a 25% rolling reserve
• Released $9,635 immediately (the rest is in the reserve)
• Reserve will be released gradually over the next 90 days assuming my chargeback rate stays under 0.65%

What I think worked: The combination of thorough documentation + showing I fixed the underlying issues + mentioning I was prepared to escalate legally if needed. I dont think it would have gone as fast if I just waited passively.

My advice for anyone else dealing with Shopify Payments frozen funds:

1. Act fast - dont wait and hope it resolves itself
2. Document EVERYTHING about why chargebacks happened and what you've changed
3. Be professional but firm - they can hold your money but you have rights too
4. Set up alternative payment processing immediately so your business doesnt die
5. Consider the demand letter route if they're being unresponsive

Thanks everyone for the help. This thread probably saved my business.

Lurking here for a while but finally decided to post. @DropshipDan congrats on getting your funds back! Quick question tho - how long did it take for the rolling reserve to actually end? Did they release it all at once or gradually?

Im in a similar boat right now. Only $4K frozen but its still stressful. Just submitted my appeal yesterday.

Replying to @NewbieSeller2025

They release it gradually. Basically they hold 25% of each new transaction and release the oldest held amount after 90 days. So its a rolling thing - you always have about 90 days worth of 25% held until the reserve period ends completely.

After the 90 day "probation" period they evaluated my account again and since my chargeback rate was at 0.3% they removed the reserve entirely. Now I get paid normally again.

Good luck with your appeal! The $4K amount is actually probably in your favor - smaller amounts seem to get resolved faster from what Ive seen.

I have to push back a little on some of the advice here. Not every suspension is recoverable and sometimes fighting it is a waste of time and money.

My experience: I spent 6 weeks going back and forth with Shopify, hired a lawyer ($2,500), sent demand letters, the works. They never budged. Eventually released my funds after the full 120 days but permanently banned my account.

Looking back, I should have just cut my losses early, set up with a high-risk processor, and moved on. The time I spent fighting could have been spent growing my business.

Not saying dont try to appeal - definitely do that first. But if you're not getting anywhere after 2-3 weeks, sometimes the better business decision is to focus on alternatives rather than fighting a losing battle.

Just my 2 cents from someone whos been through it.

Replying to @ChristineSells

This is actually fair advice and worth addressing. You're right that not every case is winnable, and I always tell clients to do a cost-benefit analysis.

Factors that make reinstatement more likely:

• First offense with the platform
• Clear, documentable reason for the chargebacks (shipping issues, one bad product batch)
• Chargeback rate that was only slightly over threshold (1.0-1.5%)
• Willingness to accept rolling reserve

Factors that make reinstatement unlikely:

• Prior warnings or suspensions
• Chargeback rate significantly over threshold (2%+)
• Pattern of fraud-related chargebacks vs. merchant error
• Products in prohibited categories

If youre in the second category, @ChristineSells is right - focus on getting your funds released (which they legally must do eventually) and finding alternative processing.

The demand letter templates are more useful for expediting fund release than for getting reinstated, to be honest.

Found this thread while researching my own situation. Different product type (POD apparel) but same story - $8,200 frozen, 1.1% chargeback rate.

One thing I havent seen mentioned: if you use Printful, Printify, or similar POD services, get them to provide a letter confirming your account standing and fulfillment metrics. I got Printful to send me a report showing my fulfillment rate, average shipping time, and return rate.

Included this in my appeal to show that my supply chain is legitimate and reliable. Not sure if it helped but it certainly didnt hurt.

Will report back on how my appeal goes.

10 years in ecommerce here. Let me share some preventative wisdom for anyone reading this who hasnt been hit yet:

Chargeback prevention 101:

1. Clear product descriptions - most "item not as described" chargebacks come from crappy product pages
2. Realistic shipping estimates - under promise, over deliver
3. Easy returns - make it easier to get a refund than to file a chargeback
4. Proactive communication - email customers about delays BEFORE they get angry
5. Recognizable billing descriptor - make sure your business name shows up on their credit card statement, not something random

The billing descriptor thing is huge. I had a client whose chargebacks dropped 40% just by changing their descriptor from "ECOM LLC" to their actual store name.

Prevention is way cheaper than dealing with frozen funds.

Not to be that person but... 1.2% chargeback rate on a dropshipping store selling phone accessories? That's pretty high. What was your return policy like before all this?

I run a similar store and my chargeback rate has never gone above 0.4%. The secret? I refund ANYTHING that even looks like its headed toward a dispute. Lost maybe $200 last year in "unnecessary" refunds but saved thousands in chargebacks and fees.

Just saying, the suspension might be a wake up call to tighten up operations rather than a villain origin story about Shopify being evil.

Replying to @SkepticalKate

Fair point honestly. My return policy was pretty strict before (restocking fee, customer pays return shipping). I've since changed it to no-questions-asked 30 day returns and you're right - my chargeback rate has dropped dramatically.

The wake up call interpretation is probably accurate. I was being penny wise and pound foolish. Better to eat a few return shipping costs than deal with this mess.

That said, I still think Shopify could communicate better about this stuff instead of just nuking accounts with no warning. A "hey your chargeback rate is getting high" email would have been nice.

PSA: Shopify actually DOES send warnings before suspension in most cases. Check your spam folder and also look in the Shopify admin under Settings > Notifications.

I got two warnings before my account was suspended. First one was just informational, second was a "you have 14 days to get under threshold" warning. I just didnt see them because they went to an old email.

Lesson learned: make sure your Shopify account email is one you actually check.

UPDATE: Got my appeal approved! Took about 3 weeks. They put me on a 15% rolling reserve for 60 days which is better than I expected.

Things that I think helped:

• The Printful fulfillment report I mentioned earlier
• Signed up for Chargeflow (similar to Ethoca/Verifi but with automation)
• Changed my return window from 14 to 30 days
• Added live chat to my store for faster customer service

Thanks everyone for the advice in this thread. Really helped me put together a strong appeal.

Adding some legal context that @MarcusLegal_Ecom touched on but I want to expand.

Re: The 120-day hold

This timeframe isn't arbitrary - it comes from card network rules. Under Visa Core Rules (Section 1.8) and Mastercard's network regulations, cardholders have 120 days from the transaction date (or expected delivery date for goods) to file a chargeback. This is why payment processors reserve the right to hold funds for this period.

However, there's an important distinction: they can RESERVE the right to hold funds, but they must still act in good faith and release funds when the risk has demonstrably passed.

State law considerations:

Some states (California notably) have laws about timely payment to merchants. If you're in CA and they're holding funds beyond what's reasonably necessary, you may have additional leverage under the California Commercial Code.

For those considering formal legal action, the Stripe demand letter template includes language about unlawful fund retention that applies to Shopify Payments situations.

Random tip that saved me: screenshot EVERYTHING from your Shopify admin before they lock you out. Transaction history, customer data, product listings, everything.

When they suspended my account, I couldnt access half the data I needed for my appeal. Had to go back through PayPal and my email to reconstruct order histories.

If youre reading this and not suspended yet, go export your data NOW. Shopify has a data export function - use it regularly.

This thread has been so helpful. Question for anyone who's been through this: did the suspension affect your ability to use Shopify's other features like email marketing, or Shop Pay on other sites?

I'm nervous because I use Shopify for everything and dont want one payment issue to tank my whole operation.

Replying to @JennyT_Handmade

From my experience: Shopify Payments suspension is separate from your store account. I could still use my store, apps, email, etc. Just couldn't process payments through Shopify Payments.

Shop Pay as a checkout option was disabled since its tied to Shopify Payments, but everything else worked fine.

The only risk is if they decide to terminate your entire merchant account, which is different from just payment suspension. That usually only happens for serious violations like selling prohibited items.

Adding my horror story that eventually had a happy ending:

The nightmare: $47,000 frozen. Yes, forty-seven thousand. I run a higher volume electronics accessories store. Got flagged during Black Friday/Cyber Monday when my volume spiked 300%.

Turns out rapid volume increase is another trigger for suspension, even if your chargeback rate is fine (mine was 0.6%).

What happened:

• Suspended November 30th
• Appealed December 2nd with sales history showing growth pattern
• Escalated to Shopify legal December 15th when I got nowhere
• Hired attorney January 5th
• Attorney sent demand letter January 12th
• Received call from Shopify January 18th
• Funds released January 25th, no reserve required

Total time: 56 days. Attorney fees: $1,800. Worth every penny for $47K.

Key learning: volume spikes need to be communicated to Shopify BEFORE they happen. I now email their merchant success team before any big sale.

Former Shopify employee here (left 2 years ago so policies may have changed). Few insights:

How the risk system works:

1. Automated system flags accounts based on multiple factors
2. Initial review is usually automated
3. Appeals go to human reviewers BUT they're evaluated against strict criteria
4. Escalations (legal threats, attorney letters) go to a different team

What actually moves the needle:

• Concrete evidence of process changes (contracts, screenshots, etc.)
• Third-party tools like chargeback alerts (shows commitment)
• Clean processing history before the issue
• Professional, non-hostile communication

What hurts your case:

• Threatening lawsuits in initial appeal (save that for escalation)
• Blaming customers for chargebacks
• Making promises without evidence
• Multiple appeals with same info (looks desperate)

Hope this helps someone.

Just want to say THANK YOU to this thread. Used the advice here and got my $6,300 released in just 11 days.

The chargeback spreadsheet idea from @ReinstatedKevin was clutch. Shopify support actually mentioned in their response that my "thorough documentation made the review process faster."

This worked for me! Highly recommend.

Been selling online since 2008, seen every payment processor drama imaginable. Some perspective:

Shopify is actually one of the better ones for working with merchants. PayPal in the early days would freeze your account for breathing wrong. Square has even stricter rules than Shopify.

The real problem isnt Shopify - its the card networks (Visa, Mastercard). They set the chargeback thresholds and they penalize processors who dont enforce them. Shopify is just following rules set by bigger players.

If you really want to avoid these issues long-term, diversify your payment options. I use:

• Shopify Payments (primary)
• PayPal (backup)
• Amazon Pay (growing)
• Crypto (small but loyal customer base)

Never have more than 60% of volume through any single processor. Learned that lesson the hard way in 2015.

Quick question - does anyone know if Shopify Payments suspension affects your credit score or gets reported anywhere? My husband is worried about this.

Replying to @WorriedCarol

No, payment processor suspensions are not reported to credit bureaus and don't affect your personal credit score.

However, there is a database called MATCH (Member Alert to Control High-risk) that Mastercard maintains. If you're terminated by a processor for certain reasons (fraud, excessive chargebacks, etc.), you may be added to MATCH, which makes it harder to get approved by other processors.

Being placed in a reserve or having temporary holds typically does NOT result in MATCH listing. Permanent terminations sometimes do.

If you're concerned, you can ask the processor directly whether they've reported you to MATCH.

Pro tip for anyone dealing with this: use Loom or screen recording to document your appeal.

I recorded myself walking through my chargeback spreadsheet, showing my new supplier contract, demonstrating my updated return process, etc. Then sent the link along with my written appeal.

Makes it way easier for the reviewer to understand your situation than just reading text. Plus it shows you're a real person running a real business, not some scammer.

Got reinstated in 9 days. Cant prove the video helped but I feel like it did.

Following this thread closely. My chargeback rate is at 0.8% right now and im terrified of crossing the threshold. Any preventative measures beyond whats been mentioned?

Already have:

• 30 day return policy
• Tracking on all orders
• Responsive customer service

What else can I do?

Replying to @NervousNancy_Shop

At 0.8% you're in the danger zone. Here's what I'd add immediately:

1. Chargeback alerts (Ethoca + Verifi) - catch disputes before they become chargebacks
2. 3DS authentication - shifts liability to card issuer for fraud chargebacks
3. Delivery confirmation - get signature on orders over $100
4. Post-purchase emails - "Having issues? Contact us before disputing!"
5. Review your product descriptions - are they accurate? Under-promise, over-deliver

Also look at WHERE your chargebacks are coming from. Specific products? Certain customer segments? International orders? Find the pattern and fix it.

Software developer here who built a chargeback monitoring dashboard for my own store. Happy to share the concept:

I connected Shopify's API to a simple dashboard that tracks:

• Rolling 30/60/90 day chargeback rates
• Alerts when rate exceeds 0.7%
• Breakdown by product, customer location, and payment method
• Comparison to previous periods

Nothing fancy - just a Google Sheet with Apps Script. But having real-time visibility means I can react before things get bad.

If anyone wants the template, DM me. Not selling anything, just trying to help fellow merchants.

I want to add something important that often gets overlooked in these discussions: you have more rights than Shopify might lead you to believe.

Payment processors cannot hold funds indefinitely. While their ToS says 120 days, this is a maximum, not an entitlement. If your risk has demonstrably decreased and you can prove it, they should release funds proportionally.

Also, if you're in certain states (CA, NY, MA among others), there are additional merchant protection laws that may apply. The platform dispute templates on this site reference some of these.

Don't just accept whatever Shopify tells you. Ask questions, request specifics, and if necessary, escalate.

Ugh, just got the dreaded email. $22,400 frozen. Reading through this entire thread now.

My situation is a bit different - I sell vintage clothing and my chargebacks are mostly "item not as described" even though I include like 15 photos per listing. Apparently some customers dont understand what "vintage" means.

Going to start my appeal tonight. Will keep this thread updated.

Replying to @SarahJ_Boutique

For vintage/secondhand items, I'd recommend adding these to your appeal:

• Screenshots of your detailed product descriptions
• Your condition rating system explanation
• Examples of customer communications where you tried to resolve before chargeback
• Any authentication documentation you provide

Also consider adding a "What is Vintage?" explainer page to your site and linking to it on every product. Shows you're educating customers proactively.

Good luck! Keep us posted.

Tool recommendation: I've been using Chargeflow for about 6 months now and it's been a game changer. Not affiliated, just a happy user.

What it does:

• Automatically fights chargebacks with evidence from your store
• Integrates with Shopify so it pulls order data automatically
• Only charges if they win the dispute (25% of recovered amount)

My win rate went from about 20% (fighting manually) to around 65% with Chargeflow. And the time savings are huge - I was spending hours per week on chargeback responses.

There are other options too - Disputifier, ChargePay, etc. But Chargeflow worked best for my Shopify setup.

Unpopular opinion: maybe stop dropshipping garbage from Alibaba and you wont have chargeback problems.

I sell products I actually manufacture and my chargeback rate is 0.1%. No frozen funds, no suspensions, no drama.

Not trying to be mean but half these problems are self-inflicted from running businesses with no quality control.

Replying to @GrumpyHenry

Cool story Henry. Some of us are building businesses with limited capital and dropshipping is a legitimate starting point. Not everyone can manufacture their own products.

Also, chargebacks happen to every business model. My $47K freeze was on a store selling branded electronics accessories from authorized distributors - nothing from Alibaba.

This thread is for helping people, not gatekeeping what kind of business deserves to exist.

UPDATE: Good news! Got a response from Shopify after 2 weeks. They're releasing 60% of my funds immediately and putting me on a 20% rolling reserve.

What I did that I think helped:

• Created a detailed "Vintage Condition Guide" page on my site
• Added explicit condition grades to every listing (A, B, C with photos)
• Included comparison to chargeback reason codes showing most were from confused customers, not fraud
• Set up a pre-purchase quiz that customers must complete for items over $100

The pre-purchase quiz was a suggestion from a friend who sells collectibles. Makes customers confirm they understand what they're buying before checkout. Added friction but worth it for high-ticket vintage items.

Thanks @ReinstatedKevin for the tips!

Bookmarking this thread. Running a print on demand store and want to be prepared if this ever happens to me.

Quick question for the group: is there any way to check your chargeback rate in the Shopify dashboard? I cant find it anywhere and dont want to be blindsided.

Replying to @JustDave_Merch

Go to Settings > Payments > Shopify Payments > View payouts. Then click on a payout and you should see dispute info.

For the actual rate calculation, you need to do it manually: (Number of chargebacks / Number of transactions) x 100

Alternatively, there are apps like "Chargeback Protection" and "Dispute Manager" that calculate this for you and send alerts.

As a fellow POD seller, keep an eye on sizing-related chargebacks. Size charts that dont match actual product sizing are a common issue with print on demand.

Great thread. Want to add some clarification on the legal side that might help people:

On arbitration clauses:

Shopify's merchant agreement includes an arbitration clause. However, this doesn't prevent you from sending a demand letter or negotiating. Arbitration only comes into play if you actually file a legal action.

For most fund holds under $25K, the cost of arbitration exceeds what you'd recover, so both sides are incentivized to settle.

On "bad faith" holds:

If Shopify is holding funds without legitimate reason (no chargebacks, no policy violations, clean history), you may have a breach of contract claim. Document everything and consider consulting an attorney.

On class actions:

I've seen people mention joining class actions against Shopify/Stripe. These exist but typically result in tiny payouts for individual merchants. Direct negotiation usually yields better results.

The demand letter approach is still your best first step in most cases.

Been through this three times now (yes, three - different stores, different niches). Some patterns I've noticed:

First time (2022): $8K frozen, fought it for 3 months, eventually got funds but account terminated. Wasted so much energy.

Second time (2024): $15K frozen, applied everything I learned, reinstated in 2 weeks with reserve. Much better.

Third time (2024): $11K frozen, knew exactly what to do, reinstated in 8 days, minimal reserve.

The learning curve is real. First time is always the worst because you don't know what you're doing. But if you follow the advice in this thread, you can significantly accelerate the process.

My biggest takeaway: proactive communication beats reactive explanations. Contact Shopify before you hit their thresholds if you see chargebacks trending up.

International seller perspective here (based in UK, selling to US):

Got suspended with $31K frozen. The complication? Different legal jurisdictions. Shopify US vs UK consumer protection laws.

What worked for me was emphasizing GDPR compliance and UK/EU consumer rights in my appeal. Showed them I was following stricter regulations than required, which I think helped my credibility.

Also, for fellow international sellers: Shopify Payments availability varies by country. If you're suspended from Shopify Payments US but operate from a different country, you might be able to switch to your local Shopify Payments (if available).

Not a workaround exactly - more of a fresh start option if reinstatement fails.

This thread helped me SO MUCH. Wanted to share my timeline for anyone whos panicking like I was:

Day 1 (Dec 5): Suspended, $7,800 frozen, 1.1% chargeback rate

Day 2: Read this entire thread, started gathering documentation

Day 3: Submitted appeal with chargeback spreadsheet, new return policy, Ethoca signup confirmation

Day 5: Generic "under review" response

Day 9: Follow-up email with additional info (signed up for Chargeflow, added video to appeal)

Day 12: Response from risk team with questions

Day 14: Answered questions same day

Day 15: REINSTATED! 15% rolling reserve for 60 days

15 days total! Would have taken way longer if I hadn't found this thread. Thank you all!

Love seeing all the success stories in this thread. A few year-end thoughts:

2024 trends I've observed:

• Shopify seems to be getting slightly more lenient on first-time offenders
• Rolling reserves are becoming the standard outcome vs. account termination
• Appeal response times have improved (2-3 weeks vs. 4-6 weeks in 2024)
• Documentation quality matters more than ever - the bar has risen

For 2024:

I expect card networks to continue tightening chargeback thresholds. Visa's new dispute program starting in April 2024 will make this even more important.

If you haven't already, NOW is the time to get your chargeback rate under control. Don't wait until you're suspended.

Happy holidays everyone, and good luck to anyone currently dealing with frozen funds.

Starting fresh in 2024 and found this thread while researching payment processors. Thank you all for the detailed advice.

Question: for someone just starting out, what's the #1 thing I should do from day one to avoid ever ending up in this situation?

Replying to @NewYearNewStore

#1 thing? Make refunds easier than chargebacks.

Seriously. Put your return/refund process front and center. Make it dead simple. Respond to customer complaints within hours, not days. Offer refunds proactively if someone seems unhappy.

A $50 refund costs you $50. A $50 chargeback costs you $50 + $15 fee + increased risk of suspension + time spent fighting it. The math is simple.

Everything else (chargeback alerts, good product descriptions, reliable shipping) is important too. But the mindset shift of "refunds are cheaper than chargebacks" is the foundation.

Never posted before but wanted to say this thread is gold. Been running a Shopify store for 3 years and just implemented a bunch of the preventative measures mentioned here.

Also wanted to add: if youre reading this after getting suspended, DONT PANIC. Take a day to calm down, then methodically work through the advice here. Panicked decisions (like trying to open a new Stripe account) can make things worse.

You'll get through this.

Update on my situation (posted anonymously before): Finally got my $19K released after 87 days. Not reinstated, but funds returned.

The demand letter approach worked for me. After 60 days of getting nowhere with normal appeals, I used the template from this site and sent it certified mail to both Shopify and Stripe legal departments.

Got a response within 10 days. They scheduled a call, reviewed my documentation one more time, and released the funds. Account stayed closed but honestly at that point I just wanted my money back.

Now running on PaymentCloud. Higher fees but at least I control my own risk destiny.

Adding a resource I found helpful: Shopify actually has a "Chargeback and inquiry" help center article that explains their process. Most merchants don't read it until after they're suspended, but it's worth reading now.

Also, their "Risk analysis" page in the admin (if you can still access it) shows you which orders are flagged as potentially fraudulent. Canceling high-risk orders before fulfillment prevents chargebacks.

Prevention > cure.

Data nerd here. I analyzed 30+ stories from this thread and other forums. Patterns that correlate with faster reinstatement:

Strong positive factors:

• Chargeback rate was 1.0-1.3% (slightly over threshold)
• First offense
• Detailed appeal submitted within 72 hours
• Third-party chargeback prevention tools mentioned
• Clear root cause identified (shipping delays, bad product batch, etc.)

Negative factors:

• Chargeback rate above 1.5%
• Previous warnings ignored
• Fraud-related reason codes (not merchant error)
• Combative tone in communications
• Prohibited product categories

Average reinstatement time for "positive factor" cases: 14 days. Average for "negative factor" cases: 67 days (or permanent termination).

Not scientific but hopefully helpful for setting expectations.

Coming back to update this thread almost 6 months later. For context, I was one of the early posters who warned about the Shopify/Stripe connection.

Long-term update:

• Never got Shopify Payments reinstated
• Moved to a high-risk processor (Durango)
• Business is actually doing BETTER now
• Higher processing fees but more freedom
• No more fear of random suspensions

Point being: getting banned from Shopify Payments isn't the end of the world. It sucks initially but you can build a thriving business without them.

Just make sure you get your frozen funds back first. Thats the important part.

Also coming back for a long-term update! I posted my success story way back in July.

6 months later:

• Rolling reserve ended on schedule
• Chargeback rate has stayed below 0.4%
• No further issues with Shopify Payments
• Revenue up 40% year over year

The experience actually made me a better merchant. Forced me to improve my quality control, customer service, and communication. Sometimes a crisis is a catalyst for growth.

To anyone currently going through this: it gets better. Follow the advice in this thread, stay professional, and you'll come out stronger on the other side.

Wow, can't believe this thread is still going! Started it 6+ months ago and its become a real resource.

My final long-term update:

• Rolling reserve ended in early November
• Chargeback rate now at 0.2% (down from 1.2%)
• Processing normally through Shopify Payments ever since
• Scaled to $35K/month without issues

What I learned:

1. Chargebacks are a symptom, not the disease - fix the root cause
2. Documentation and professionalism win appeals
3. This community is incredibly helpful
4. Every crisis is an opportunity to improve

Thank you to everyone who contributed to this thread. You all helped save my business, and based on the replies, many other businesses too.

If you're just finding this thread because you got suspended - don't panic. Read everything here, follow the advice, and you'll get through it. Good luck!

Pinning this thread as a resource for the community. Great discussion with actionable advice.

Quick links mentioned in this thread:

• Stripe/Shopify Payments Demand Letter Template
• All Platform Dispute Templates

Remember: this thread contains general information, not legal advice. Consult with an attorney for your specific situation.