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Banned from Stripe/Shopify's Payments Gateway - New customers beware

Bella_Vérité
Tourist
9 0 16

Hi All,

First, I would like to express my sympathy for anyone going through this very poorly handled situation on behalf of Shopify. I too have suffered from this unprofessional experience and can't express the frustration and how deeply this has affected our business. 

We received a letter from Shopify on Friday 4/21 that our payment gateway would be shut down and effective immediately. They stated the reasoning was that our products were classified as “Pseudo Pharmaceuticals” and contained "Hyaluronic Acid". You can read both Stripe's and Shopify's "Terms of Payment" till your are blue in the face but It does NOT state "Hyaluronic acid" or any of the following terms outlined in the email I received from Tony with Shopify Risk Analyst Team.

“We are unable to accept payments for pseudo pharmaceuticals (meaning any product that makes a health claim including things like supplements, vitamins, skin brighteners and whiteners, teeth whitening, skin peels and lightening products and products that contain hyaluronic acid, retinol, glycolic acid, kojic acid, vitamin C serums and hydroxy acids), as outlined here: (https://www.shopify.ca/legal/terms-payments-us)*

In fact, it is published on their websites with the following definition:  

Shopify: “Pseudo Pharmaceuticals - Pharmaceuticals and other products that make health claims"

Stripe's: "“Pseudo Pharmaceuticals - Pharmaceuticals and other products that make health claims that have not been approved or verified by the applicable local and/or national regulatory body"

We DO NOT sell pharmaceuticals or make ANY claims. In fact, our e-store is the opposite and sells COMPLETELY NATURAL AND ORGANIC BEAUTY PRODUCTS. I asked Shopify, if we were to remove the products that contain naturally derived Hyaluronic Acid that hydrate the skin, could we be reinstated and his reply, “Regrettably, this was a decision made by our banking partners and it is final.”

Stripe is the gateway for a ton of companies. As shown on their website they process payments for Glossier, Sacks and Target, all 3 of these companies have "banned ingredients" within their consumer goods products. 

See customer list here: https://stripe.com/us/customers

You will see Glossier’s video review front and center. Their products contain Hyaluronic Acid, Vitamin C Serum and they also make claims.

Hyaluronic Acid:

https://www.glossier.com/products/priming-moisturizer (14th ingredient listed). 

Vitamin C Serum:

https://www.glossier.com/products/super-glow. In the first sentence it states Vitamin C Serum.

This is bait and switch and these so called regulations and restrictions are not being enforced universally. I spoke with several of my vendors and they personally have not had this issue or have they heard of it.

We have curently made the switch to Authorize.net but are very unhappy with the additional fees associated. 

 

 

Replies 14 (14)
Heather_Janicki
New Member
1 0 2

Hi Jesicca,

Exactly the same thing just happened to my wife's shop last week. The product she was banned for also made no health claims (it's a skin moisturizer), but since it contains hyaluronic acid, it's apparently a "pseudo-pharmaceutical." As you noted, this wasn't stated in Shopify's Terms of Service. We switched our payment gateway, but lost sales during the unexpected downtime.

I've been trying to discuss this with Tyson, a Shopify Risk Analyst, but he will only repeat that "we are unable to support your business on Shopify Payments." This is very frustrating.

Zac

andreas_oee
Tourist
7 0 4

Very concerning that no Shopify representative has addressed this yet. 

Bella_Vérité
Tourist
9 0 16

Hi Zac,

I am so sorry to hear, I know it is the most frustrating thing and you can not get a direct anwer from Shopify. They just keep sending the Terms Of Payment but it does not outline these retrictions. I have reached out to Stripe directly and they have completely different reasoning on why we are banned. Both Shopify and Stripe are discriminating. If these are the terms, it should apply to ALL merchants, not just a select few. 

There are a ton of sites that carry "Pseudo Pharmaceutticals" and are hosted on Shopify, while using Stripe as their merchant. I can not get over the fact that the fist customer on Stripes websites, is  breaking these said regulations and literally has a video on their website. 

This is why I am hiring an attorney. May, I ask what merchant you ended up going with? 

Life_Star
Tourist
4 0 1

Hi Jessica,

We are new to Shopify so can't help with this topic,  but we LOVE organic beauty products that contain hydraluronic acid and squalane... so we are now following you on FB and IG.... good luck - hope you get this resolved. Your website is beautiful!

Gigi

Best wishes,  Liza., Customer Service http://www.RegaliaRags.com
Bella_Vérité
Tourist
9 0 16

Hi Gigi,

Thank you so much for your kind words and follow. We will be sure and do the same. It is nice knowing people understand how both those ingredients work and the benifits. 

Good luck with your business, we wish you great success. 🙂 

Jessica 

 

Roy7
Tourist
5 0 1

Same here, ridiculous! so disappointed!

If you don't build your dream someone will hire you to help build theirs.
smvee
Shopify Partner
4 0 3

I realize I'm replying to an older post but hoping to get some responses. I'm new to shopify and in the same boat as the few others for the same reasons. Shopify banned my store from using their payment gateway, even before the store is opened. I was notified just few days ago. So I'm one of those unlucky ones too. I understand these regulations are due to the TOS of stripe but what's frustrating is the additional monthly fee ($30) and the 2% transaction fee that you will have to pay when you choose an external payment gateway (that you have not considered when you signed up for Shopify with Shopify payments). In fact Shopify charges the 2% transaction fee not just on the purchase price but including shipping and taxes!!.

Shopify also told me even if I removed the few products that do not meet their TOS, they still would not reconsider/reverse their decision and it's final.

Anyway, I realize I may have the same problem even if I move to another ecommerce platform, because these terms are dictated by the payment processors, but at least we would save the 2% transaction fee, for example if you went with Bigcommerce. Every little bit adds up and eats into your profit, especially when you are dealing with low margin products and when you have to offer free shipping.

Hi Bella Vérité, you said you switched to Authorize.net. Did they have any issues with any of your products? I tried and could not find their TOS and when I called them I was told only way to find out if my products are acceptable to them is to submit an application and go through the process.

Any other suggestions for a payment processor besides Authorize.net that would be ok with so called pseudo pharmaceuticals? Anyone using Paypal payments pro for such products?

Thank you.

True_Talon
Explorer
53 1 15

I commented in a similar thread here -

https://ecommerce.shopify.com/c/ecommerce-discussion/t/items-prohibited-363595

It's about time Shopify dumped Stripe and started to work with a better Gateway provider. It makes me wonder if Shopify isn't in colusion with Stripe somehow.

If you are forced to go with a different Gateway provider you are effectively paying two credit card fees.

HOW ABOUT IT SHOPIFY EMPLOYEES AND EXECUTIVES - LETS HEAR SOME COMMENTS !!!!

 

True Talon - Knives and EDC Gear www.truetalon.com
Andrea15
Tourist
3 0 1

Target, Saks, and Glossier don't sell products " that have not been approved or verified by the applicable local and/or national regulatory body" - the clue as to how to get your products accepted by Stripe is in the sentence they gave you.

Bella_Vérité
Tourist
9 0 16

Andrea,

That is a very interesting comment being that we carry a lot of the same natural brands that the big box retailers carry (Target, Nordstroms, Saks & Free People). You can not get reinstated after Stripe has banned your account. So, with that being said, there is no "clue" in the emails they provide the merchants when they have notified us that are account would be shut down immediately and permantely banned. 

 

 

 

True_Talon
Explorer
53 1 15

And I bet if you found one of Stripe's forbidden products at Target, Nordstrom or Saks and complained to Stripe about it, your complaint would quietly vanish......

True Talon - Knives and EDC Gear www.truetalon.com
Pavel_Skoda
New Member
1 0 2

Hello, this sounds ridiculous. So people have to fear if they get banned or not when you start such a project. We have also 100% USDA certified organic products - serums, we avoided medical claims both on label and on e-commerce site www.iviorganicshop.com 

That is why we had to create a separate website for more information, from where you cannot buy our products directly. Interestingly stripe has its policies and other payment gateways + Shopify, someone has to hire a lawyer for this purpose...

smvee
Shopify Partner
4 0 3

Shopify's TOS does not elaborate on "Pseudo Pharmaceuticals" or other restricted categories such as weapons or hair care products. If you are a new customer you will find out if you have a restricted product, only after you expend several months worth of time and sweat and when you launch your store or set up Shopify payment. If you are banned then you will get a detailed email telling you everything that would be classified under Pseudo Pharmaceuticals, or kitchen/hunnting knives classified as weapons, and hair extensions real/fake not allowed. So you are never going to know until you go through the process, unless you are selling T-shirts or something like that. So if you are a new customer and if you think you may have a restricted product don't count on the heavily promoted Shopify payments and be prepared to use Authorize.net or Paypal Pro or some other external payment gateway, and account for the additional $25 or $30 monthly fees and the additional 2% transaction fee penalty to Shopify. So you would be looking at Shopify monthly plan fee + $25 (or $30)  payment gateway fee + 2.9%, 30 cents credit card processing fee + 2% Shopify transaction fee. On top of it all the add on apps you may have to subscribe to (to accomplish even some basic functionalities) + cover free or discounted shipping you may offer, and then try to make a profit. If you are selling very high margin products this may still be a viable proposition for you.

And when the shutter comes down on you from Shopify/Stripe no opening it back up even if you agree to remove the disallowed products. However, Paypal Payments Pro gives you a chance to remove the products from the store in order to reinstate the account. And their restricted products list is not so stringent as Shopify/Stripe. They let you email them your site before hand that they can review before you go through the application process and tell you if you have any restricted products on your site. They really work with and work for the customers. BUT you have to spend additional $30/month + 2% additional transaction penalty!!. No other go. Cost of doing business. Just don't count on the heavily promoted Shopify payments (they continue to promote to you even after they ban you Permanently!! :).

True_Talon
Explorer
53 1 15

The silence is deafening from Shopify management. Crickets chirping in the background.........

I had to go with MIGS - which is Mastercard's Gateway system and the only Gateway my bank accepted that was compatible with Shopify. They didn't have a problem with what I was selling. They just wanted to make sure the business was legitimate and there was an email address, phone number and address listed on the site and we were good to go.

I laughed at that as I get phone calls all hours of the day and night from customers. 

True Talon - Knives and EDC Gear www.truetalon.com