Our Shopify Payments suspended due to 1 single chargeback in 3 years?

[qsdf]

Hi all, 

I am writing this post as support is less than helpful to help us resolve this. 

We've had our Shopify store for a little over 3 years, and have processed over 200K in sales since. 4 days ago, one of our customers disputed a payment because his order was 3 days late (Due to a finish revision he requested mid way through production). (The order value was close to 5K). 

2 days later, Shopify payments sent us an email saying that our account is suspended, because it is "Too risky". 

To clarify: This is one single payment in 3 years! How on earth is something like this possible? 

We replied to the chargeback, and provided official documentation to show that the chargeback is unlawful; but we apparently would only hear back within 3 months. 

We are now down 5K + 3K in production costs, but worst of all, we have no way to accept credit card payments. 

Does anybody have tips on how to resolve this? Shopify support's only answer is that they have no control over this since it is handled by their partner banks. 

[dylanpierce]

Hi @qsdf 

First off, so sorry to hear that you're going through this. This situation sounds beyond frustrating, especially with the track record of good payments.

Each payment processor has it's own criteria for what it considers risky, and they may review each merchant on a case by case basis.

In the numbers you gave, a single transaction is nearly 2% of your entire 3 year revenue. In Shopify's eyes, that might be considered risky. If you zoom in a bit to the last trailing twelve months, it might be a much higher percentage.

You didn't share this, but I'm just going to set an example. Let's say that in the past 12 months your business has earned 100k in revenue. Therefore this scenario, the disputed transaction is $100k/$5k which would mean that 5% of your total payments volume was lost to a single chargeback.

Shopify most likely saw that larger number (not accounting for the 2 years prior) and evaluated that as too risky. They might not even consider a full year, but only a few months, which would increase your accepted to chargeback transaction ratio even higher.

In the short term, I would recommend signing up for another payment gateway like Authorize.net so you can begin to accept credit card payments again.

It sounds like you have a business where there's a long lead time for production. Just curious, have you considered implementing a deposit solution and then using manual capture to only a portion of the full amount? That way you can minimize your chargeback risk and then capture the entire transaction after the product is fulfilled.