Acceptable business practices and risk evaluation for Shopify Payments

To use Shopify Payments, your business must meet certain standards that help maintain a trusted ecosystem for merchants and customers. Your business is evaluated when you first apply for Shopify Payments, and risk is continuously monitored throughout your use of the platform. If a review identifies practices that create elevated risk or undermine customer trust, then your account might be declined, deactivated, or subject to restrictions such as payout holds, reserves, or payout delays.

Shopify Payments risk standards and card network thresholds

Chargeback rate is one of many signals used to assess risk. Although payment networks such as Visa and Mastercard publish chargeback thresholds, your store is evaluated against a higher standard to maintain merchant and customer trust across the Shopify ecosystem. Your store is held to this higher standard for the following reasons:

Risk signals beyond chargebacks: Factors such as product listings that don't match what's delivered, deceptive subscription terms, inauthentic reviews, and unreliable fulfillment can indicate elevated risk to customers even when chargeback rates are low.
Early action before harm scales: Acting before network thresholds helps protect your store from the more severe consequences that follow when a business reaches network-level limits.
Platform-wide trust: When customers dispute a transaction with a merchant because a product was never shipped or didn't match what was promised, customer trust degrades across all independent businesses on the platform. A small number of merchants who harm customers make every other merchant on the platform look less trustworthy to banks and card networks.

If you demonstrate any of these practices, then your account might be acted on before you reach network-level limits.

Review criteria

Your Shopify Payments eligibility is assessed across several areas, including how your business interacts with customers, how it represents itself, how it manages transactions and disputes, and the history of any other businesses that you operate. Compliance with Shopify Payments Terms of Service for your country is also considered. Risk level is continually evaluated and subject to change.

Account and compliance information

Accounts identified with high-risk scenarios might be flagged, including but not limited to the following issues:

Invalid tax information.
Accounts held by individuals under 18, in violation of the Shopify Payments Terms of Service.
Discrepancies between a business's physical address and account operating location.
Inconsistencies in verifying account ownership or business details.

Business practices and customer experience

Your store's customer-facing practices are reviewed to ensure that products and services are represented honestly and that customers receive what they expect. The review evaluates the following practices:

Accuracy of product descriptions and claims.
Counterfeit or misrepresented products, including items that infringe on intellectual property or misrepresent product origins.
Shipping and fulfillment timelines compared to promises, including businesses with significant gaps between order placement and delivery such as event organizers and custom-order businesses.
Transparency of recurring billing terms and ease of cancellation, including businesses that operate with longer billing cycles such as annual subscriptions.
Pre-selections or designs that trick customers into enrolling in subscriptions without clear understanding.
Clear communication with customers when something changes, such as delays, stock issues, or updates to pricing or policies.
Responsiveness of customer support when customers have questions or something goes wrong with an order.

Business credibility

Your business credentials and public-facing claims are evaluated to confirm that they're accurate and verifiable. The review assesses the following credentials and claims:

Representation of business credentials and history.
Authenticity of testimonials, reviews, and endorsements.
Claims about certifications, awards, or media coverage.

Transaction and operational patterns

Your transaction history and operational track record are reviewed to assess risk and reliability. The review considers the following factors:

Chargeback rates and trends.
Refund and dispute resolution practices.
Ability to fulfill customer orders as promised.
Sales volume, frequency of sales days, and number of orders successfully fulfilled.
Historical patterns across any businesses that you operate.
Rapid increases in sales volume, which might indicate mismanagement or potentially fraudulent activity.

Risk evaluation considers hundreds of signals and evolves continuously to address new patterns of deception that harm customers and erode trust in the platform. This isn't an exhaustive list, and businesses are assessed based on an overall evaluation.

Account actions for elevated risk

When an elevated risk is identified for your business, several actions might be implemented to mitigate potential financial losses.

Ensure that you stay informed about your account status and promptly address any requests from Shopify to avoid interruptions in your Shopify Payments payout processing. Reserve terms and any holds are communicated through the store owner's registered email address and notifications in your Shopify admin.

Adjusting payout schedules

A custom payout schedule might be imposed for higher-risk businesses, resulting in longer waiting periods before you receive payments. Payouts might take from 5 to 20 business days.

Implementing reserves

A reserve is a temporary hold on a portion, in some cases the full amount, of transactions processed through Shopify Payments for a specified period. The reserve can be a fixed amount or a percentage of each transaction, and is designed to ensure that funds are available for potential disputes and refunds.

Reserves serve as a protective measure against potential losses that might arise from chargebacks and refund volumes. Learn more about reserves in Shopify Payments.

Placing holds on payouts or charges

A temporary hold might be placed on your payouts or charges during an account review. This can happen when there are issues verifying your account information. You're notified of payout holds in your Shopify admin Merchant Alerts or at the store owner's registered email address.

Requesting documentation

If specific compliance or verification issues arise, then you might be asked to provide additional documentation to address these concerns.

Reviewing and terminating your Shopify Payments account

Accounts that display high-risk behavior or violate Shopify Payments Terms of Service for your country might undergo further review, which might lead to the closure of your Shopify Payments account.

Suspending payouts or deactivating charges

In severe circumstances where risks aren't adequately resolved, your payouts might be suspended or your ability to process charges through Shopify Payments might be deactivated.

Declined or deactivated accounts

If your Shopify Payments account is declined or deactivated, then you receive an email notification with next steps. To appeal a decision that you believe was made in error, refer to appealing your store's termination for deactivations or to reapplying to Shopify Payments for declined applications. You can also activate a third-party payment provider to continue processing transactions in your store.

Best practices for maintaining good standing

To keep your Shopify Payments account in good standing, follow these recommended practices:

Provide accurate product descriptions and set realistic delivery expectations.
Fulfill orders within the timeframes that you promise to customers.
Make recurring subscription terms clear and make cancelling subscriptions easy.
Respond promptly to customer concerns and disputes.
Ensure that business credentials and claims are accurate and verifiable.
Maintain transparent and honest communication with your customers.