Hello. A customer we have known for years placed two orders on our site today while she was in her home in Mexico. She is having the products shipped to her home in the US. We spoke with her on the phone to verify the orders and began to take steps to fulfill the orders. We then received an email from Shopify stating that they were going to hold our funds for 120 days unless we cancelled the "high risk" order and refunded the client. While we understand and appreciate the fraud analysis and warnings, it seems impossible that a credible e-commerce platform would not have a way for vendors to verify their customers and transactions when the algorithm gets it wrong.
The risk operations support staff refuses to take calls or resolve the issue and we cannot find a way to escalate this issue or speak with someone on the phone who can resolve it, not just for this transaction but for future transactions. We work with high net-worth clients who travel often and own multiple homes so they are at times going to be placing orders in which the billing address and/or IP address are in different countries from the shipping address. How can we scale our business online if Shopify is going to make a habit of holding our payments for 120 days, or worse? From what we have heard from other vendors, we could be at risk of having our payment system shut down without warning and through no fault of our own.
This seems to be extremely unprofessional and potentially discriminatory on the part of Shopify and we would appreciate any suggestions or support from the Shopify community.
It's unfortunate that Shopify is withholding your funds for 120 days even though you know that you have a trusted long-time customer. You can perhaps try to ask the customer to pay through another way other than Shopify Payments through Paypal or another third-party payment that will not withhold the funds and cancel the original order.
Is your shop classified as high risk? Is your chargeback percentage over 2% recently? I can't remember where I've read it, but I think Shopify recently changed its policy to withhold funds if your store is classified as high risk. If they are doing this often, then you might want to add an alternative payment gateway.
Thank you for getting back to us. We have never had a charge back ever in our history. If our shop is classified as high risk, it is for reasons unknown to us and Shopify has not communicated with us about this classification. Unfortunately no one who works for Shopify has responded to us to clarify their policy or how to ensure we can avoid this in the future even if we do go through a third-party app. (We have read in the forum that other vendors had their third-party payment systems shut down and/or their store suspended because transactions were flagged as high risk, even though they were valid.)
I would recommend contacting them until you get an answer from their risk assessment team so that this does not happen in the future. You did not mention what your shop is selling, but it's always worth a 2nd read of Shopify's terms of service for Shopify Pay if you are located in the U.S on what is classified as high risk. https://www.shopify.com/legal/terms-payments-us
We have some clients that are rated as high risk so, they have stopped using Shopify Payments and are using a third-party gateway that is more accepting of their business models.
Did you ever get this issue resolved? I am having the exact same issue however I had someone purchase goods while having their VPN active. So it appeared as though they were in South America and sending to an address in the US. I contacted the customer and authorized the payment after doing so. I have been emailing risk management non stop and attempting to get ahold of someone on the phone but to no avail. I have “chatted” with several Shopify customer support agents but all they can do is “leave a note with risk management”. This is upsetting for me and detrimental to my business.