Help! Shopify withholding payouts and threatening to deactivate our store

Shopify Discussion
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Hi there, we have been operating a Shopify store since late 2019. We purchase overstock and returned items from licensed liquidators, then resell them on our website. Recently we got an email from Shopify stating:

"Your payouts from Shopify Payments are temporarily on hold while we review your account.

You need to submit reseller documentation for one or more of your products to continue using Shopify Payments."

Ok, no problem as we are purchasing from legal, authorized liquidators. We sent them invoices, documents proving we are legally purchasing these items. For some reason that still isn’t enough, and now Shopify is asking we provide authorization for all brands present on our store. This is obviously something that isn’t possible, as we buy straight from liquidators who purchase overstock from big box retailers such as Costco, Amazon, Wayfair etc. We have many brands on our website and it is impossible to get authorization for every single one. We were under the assumption that authorization from the liquidators was enough, is there something we are missing?

This is really starting to negatively affect our business as we haven’t received a payout in almost a month, bills are coming due and we are risking our entire business that we have worked so hard on because of this issue.

We would love any help or suggestions, as we feel this is totally unfair and unjust.

One Stop Discount Shop

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HI @OSDS

Thank you for sharing your situation here in the community for help and feedback. I can definitely understand your concern and it is one that other merchants have discussed here in the community as well.

Reselling branded/licensed products is a tricky line to walk. Each brand has their own rules in place about what is okay, and what isn’t on top of local and jurisdictional laws that could impact your business.

I am not able to provide legal advice or review your specific situation for details, but I can share some general information and recommendations on next steps to get this resolved.

If you are selling products licensed under brands like Disney, Marvel, Nintendo, Sony, etc, then something to consider is how the products are showcased in your store. While generally you can resell a product you have legally purchased without issue, you cannot showcase the product in your store like you are licensed reseller or vendor for the brand (unless you have that license of course). The perception of this, legally, can change with just a few words here or there or even in just one spot in your TOS or about us page.

Big, big, brands hold onto their licensing with a tightly closed fist and have no problem go after the “little guy” if they feel it is in their best interest.

It sounds like you are purchasing these clearance goods from legitimate companies who most likely do have the appropriate licenses. One thing to ask them is to provide documentation that their license allows them to sell the products to a reseller, if their license does not then that could affect your legal right to sell the products as well.

In these situations, the best thing I can really suggest is to seek outside legal representation to assist you with this. Please know that it is the merchants responsibility to know and understand the legalities around the products they are selling, and it is not something our support can supply for you. Our team can make requests for documentation and it is your responsibility to know and understand what documentation you need and is required for your business to operate.

I understand that this doesn’t solve the problem for you, but I hope the additional information and insight into this process will help you and your business moving forward.

3

Any updates? This happen to my store on the 29th and no reply to numerous emails

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Any Updates with resolutions?