20% Reserve on payouts because of dropshipping

[Olivia4]

Hello,

I ran a store for a few weeks with a single product and achieved around $15,000 in sales. However, I received a notification from Shopify's Merchant Trust team stating that my store was restricted with a 20% hold on every transaction for 120 days. Here is the original message I received:

“During a standard review of your account, we have identified an increase in chargeback risk, as you appear to be dropshipping. Dropshipping can cause extended fulfillment times which increases risk for chargebacks. For this reason, we have placed a partial reserve on your account.”

I want to highlight that I did not experience any chargebacks or customer complaints. I had a clear refund policy, guaranteeing refunds within 30 days. 

Does Shopify support dropshipping? 

What do you think is causing this issue? 

Thank you for your insights.

[Olivia4]

Hi Qasim,

Thank you for your detailed explanation and advice. I really appreciate your insight into Shopify's guidelines and the potential concerns related to dropshipping.

I’ve already reached out to Shopify's Merchant Support team several times via email, but unfortunately, I haven’t received any response yet. The 20% reserve is causing some operational challenges, and I’m eager to resolve this issue as soon as possible.

I want to highlight that our average shipping time from the moment an order is placed to when it reaches the customer is just 8 days. This is a relatively short fulfillment period, so I’m finding it difficult to understand the reasoning behind the reserve, especially since we haven’t experienced any chargebacks or customer complaints.

Could you please assist me in getting in touch with the right team or help escalate this matter? I’m more than happy to provide any additional information or documentation that could help clarify our fulfillment process and demonstrate that we’re committed to customer satisfaction and meeting Shopify's standards.

Thank you again for your support, and I look forward to hearing from you.

Best regards,

Olivia

[shahrozbabar5]

Hi @Olivia4 

Yes, Shopify supports dropshipping, but they're cautious due to risks like chargebacks.

**What’s causing this issue?**

Shopify likely flagged your account due to:
- **High sales volume** in a short time.
- **Dropshipping concerns** about fulfillment delays.
- **Lack of a track record** on the platform.

Even without chargebacks, these factors can trigger a partial reserve. To resolve this, provide evidence of reliable order fulfillment and customer satisfaction. I faced a similar issue but resolved it by proving my business’s stability.

if it clears your concept please mark this answer as a solution, if you need further assistance let me know.

[Olivia4]

@shahrozbabar5 I appreciate your attempt to provide clarity, but your response doesn't fully address my concerns. The issue of a "lack of track record" is frustrating because we've only been on the platform for a couple of weeks. How are we supposed to build a track record if Shopify immediately places a 20% hold on each transaction? This practice seems excessive, especially when applied across all new merchants—it's hard not to see it as a way to unfairly hold onto funds.

You mentioned proving your business’s stability, but how were you able to do that if Shopify doesn't respond to emails? I've reached out multiple times with no response, which only adds to the frustration and gives the impression that this reserve is more about holding funds than about actual risk management.

If you have any practical advice on how you managed to get through this, especially when communication from Shopify seems non-existent, I’d really appreciate it. As it stands, this feels like a questionable practice, and I'm struggling to see how it’s in the best interest of merchants.

Thanks for your understanding

[Olivia4]

UP!