How does a bankrupt online store continue to take orders?

Shopify Discussion

Topic summary

A customer purchased from an EU-based Shopify store in early September but never received tracking information or their order. They discovered the company filed for bankruptcy in early August, yet the store continued accepting payments.

Key concerns raised:

  • Why Shopify allows bankrupt companies to continue processing orders
  • Lack of transparency (no bankruptcy notice on the website)
  • What recourse exists for affected customers

Community responses explain:

  • Shopify provides software infrastructure but doesn’t monitor individual merchant financial status
  • German insolvency law doesn’t require immediate business cessation
  • Payment providers, not Shopify, would be responsible for blocking transactions
  • Shopify is compared to a tool manufacturer—not liable for how businesses use it

Disagreement emerged over platform responsibility. The original poster argues Shopify should enforce merchant accountability (banning stores that don’t fulfill orders/refunds within legal timeframes), while others maintain consumer protection is the buyer’s responsibility through chargebacks and legal channels.

Status: The customer has filed complaints with EU consumer protection, initiated a chargeback, and contacted legal counsel. The discussion remains unresolved regarding platform accountability.

Summarized with AI on October 30. AI used: claude-sonnet-4-5-20250929.
1

Hello,

I have made a purchase on an online store operating in the EU. The transaction was made early September, and I did not receive any order tracking number. I also checked the instagram of the store, and found many customer complaints about not receiving their order.

One of the comments mentioned that the company owning the store filed for bankruptcy early August which I double checked.

I already filed a complaint through customer protection. The question I am asking:

  • How does shopify allow a bankrupt company to still take orders?
  • Why is not there any transparency in the website of the company? A large banner in red clarifying the company is bankrupt?
  • What does this mean for me and other customers who already made the purchase?

Can you please comment on that, and clarify my concerns?

Thank you

1 Like
2

Shopify is only providing a service to this company and I think there is no reasonable way for Shopify to track the current state of a company or detect if they are bankrupt.
Even if there was a way, not even a bankruptcy means that the company immediately has to shut down. This also depends strongly on the relevant jurisdiction so that the decision would be way out of what you can expect from a software provider.
You could also argue that the payment provider should have stopped the transaction.

1 Like
3

Thank you for your prompt response. After contacting the customer protection within the EU it seems that German insolvency law does not require that all business operations be discontinued with immediate effect… However we would appreciate future customer protection from Shopify & Or Payment Providers.

4

Shopify is a tool used by businesses, it is NOT those businesses in and of itself.

This is like asking a car manufacturer such as Ford to give you money because a taxi cab driver you prepaid for a ride didn’t show up.

Or because the local restaurant made a bad burger , going to the cattle rancher asking for a refund.

Consumer protection starts with the consumer.

If you used a credit card issue a chargeback.

If you used another payment method seek recourse through the systems available for that method.

5

I could not disagree more.

It is in the best interest of the platform host to make sure their platform is trustworthy, and that the platform merchants are not fraudsters / tricksters.

They could enforce rules like: if a merchant do not fulfill X Orders without refunding (according to the law you need to make a full refund within 14 days) they ban their shop.

My problem is that it should be transparent that the merchant is not fulfilling their part, the shop should be banned: Because many customers did receive neither their order nor a refund. I already filed complaints at the customer protection, I filed for chargeback and contacted the lawyer. If there is no regulation for that now there might be in the future.

6

Where is Legal team at Shopify. Your merchant are doing fraud and even after customer reported issues with fraud merchant who are taking money and not sending the item. you are doing nothing. where is the escalation team.