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Why is Shopify Holding My Funds?

If you’ve recently noticed Shopify holding your funds, it can be frustrating and alarming. This common issue happens for several reasons, mainly to protect both businesses and customers from potential risks. Whether you're a new merchant, dealing with chargebacks, or experiencing other payment-related issues, understanding the reasons behind these holds can help you resolve them quickly.

In this article, we'll break down the key reasons why Shopify might be holding your funds and explain how disputes and chargebacks often play a significant role.

Why Does Shopify Hold Funds?

There are several factors that could cause Shopify to put a hold on your funds, most of which are tied to risk management and compliance with financial regulations. Below are some of the most common reasons:

High-Risk Business Classification

If Shopify classifies your business as high-risk due to the type of products you sell—such as certain health products, adult items, or dropshipping—your funds may be held. 

Shopify Payments, powered by Stripe, follows strict guidelines for high-risk businesses, and this classification often leads to temporary holds on payouts.

New Merchant Status

If you're new to Shopify, your funds may be held as Shopify assesses the legitimacy of your business. This typically lasts for a few days, but can be up to 14 days. It's a way for Shopify to protect both customers and merchants by ensuring that everything is above board during your initial transactions.

Chargebacks and Fraud Concerns

Chargebacks are one of the most common reasons Shopify holds funds. Even if you haven’t had any chargebacks yet, a perceived risk of chargebacks or fraudulent transactions can trigger a hold. Shopify wants to make sure there are enough funds in your account to cover any potential disputes.

Unverified Payment Methods

If you've recently added a new payment method and it hasn't been verified yet, Shopify may hold your funds as they verify the legitimacy of the card or account. Once verification is complete, your funds should be released.

Compliance and Documentation

As part of Shopify's Know Your Customer (KYC) process, you may be asked to provide additional documentation. If there are discrepancies or missing information, Shopify may hold your funds until everything is sorted out.

Shopify & Shopify Payment Landscape

The rise of online shopping has been driven by platforms like Shopify, making it easier than ever for entrepreneurs to launch and grow their businesses. Shopify stands out as a powerful tool for anyone looking to build an ecommerce store from the ground up.

With its user-friendly design and a host of features, Shopify simplifies the process of setting up an online store, even for beginners. But behind the scenes, there's more at work than just sleek storefronts and smooth checkouts—there’s a whole payment system in play.

At the core of this system are three key components: Shopify, Shopify Payments, and Shop Pay. Shopify Payments is the platform’s built-in processor, powered by Stripe, which handles transactions seamlessly. 

Meanwhile, Shop Pay provides customers with a quick and easy checkout experience, ensuring that payments are processed efficiently and securely. Together, these systems move money from your customers' cards to your bank account smoothly, making Shopify more than just an online store—it’s a complete payment ecosystem.

How We Got Our Shopify Payment Hold Lifted

I was selling products on Shopify, starting with a small volume to test the market. After some time, I found a product that showed great performance—solid metrics, good customer feedback, and it was time to scale. Everything was going smoothly until, suddenly, the first chargeback hit.

The chargeback wasn't due to any fault of ours. A simple shipping delay from the fulfillment company was all it took for a customer to file a chargeback for a product they hadn't received yet. Even though the product had already been sent out, I found myself manually filling out Shopify's dispute form, hoping to resolve the issue.

I lost the chargeback. Worse, Shopify put an 80% hold on my funds. That was over $3,000 locked up in just one week. The payment hold completely crippled our ability to scale. It wasn’t just a frustrating setback—it made it impossible to run ads or restock inventory. 

I had to dig into my own pocket to keep things going, all while receiving small payouts that barely kept us afloat.

At that point, I realized I needed a better solution. Setting it up took less than two minutes, and it immediately started handling chargebacks automatically. Instead of manually submitting documents and hoping for the best, Disputifier handled everything from crafting optimized responses to submitting evidence for each case.

Since then, we’ve won every chargeback, and Shopify has never held our payments again. Disputifier not only helped lift our payment hold, but it also gave us peace of mind knowing that chargebacks were no longer a major threat to our business.

The best part? We didn’t have to spend hours managing disputes or hire extra help. Disputifier automated the entire process and saved us both time and money, allowing us to focus on scaling the business.

By using an automated chargeback solution like Disputifier, we could finally get back on track, win our chargebacks, and lift the payment hold that was holding us back.

How You Can Automate Chargeback Handling with Disputifier

Managing chargebacks manually, as seen in the example above, can be time-consuming and stressful. But there’s a better way to handle disputes and prevent your Shopify funds from being held—automating the process with Disputifier.

Customer 1
United States
45 minutes using the app

"This app has saved me countless hours in managing disputes. A must-have for any serious Shopify store."

Customer 2
Canada
1 hour using the app

"Disputifier has streamlined our chargeback process and increased our win rate significantly!"

Customer 3
Australia
30 minutes using the app

"Incredible service and fast response times! Disputifier makes handling disputes so easy and stress-free."

Chargeback Alerts

Disputifier uses chargeback alerts through Verifi™ and Ethoca™ to catch disputes before they escalate into full chargebacks. This helps prevent funds from being held in the first place by offering a chance to resolve the issue or issue a refund.

AI-Powered Responses

Disputifier's AI-driven system creates optimized responses to chargebacks, increasing your chances of winning disputes. This not only speeds up the process but ensures your case is presented in the best possible light with minimal manual input from you.

Pay Only When You Win

Disputifier charges you only when they successfully resolve a chargeback in your favor, making it a risk-free option. You can avoid costly holds, save time, and prevent future disputes with zero upfront costs.

Saves Time and Money

By automating chargeback handling, Disputifier eliminates the need for extra staff or dedicating hours to manually managing disputes. The system increases your win rate while reducing the impact of chargebacks on your business. Plus, with a guaranteed 5X ROI, it's a solution that pays for itself.

Conclusion

If Shopify is holding your funds, it’s essential to act quickly. While manual chargeback handling can help in some cases, automating your dispute process with Disputifier ensures a higher success rate, faster resolutions, and most importantly, no more holds on your hard-earned revenue.

Stop losing sleep over disputes and chargebacks—take control of your Shopify payments with Disputifier today!

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