My Shopify Store Got Shut Down. What Happens Now?

You never thought it would happen to you, but it did. You got the dreaded Shopify account closure email stating that your store would be shut down. No prior warning. No explanation of what you did wrong.

Now what?

It’s hard to believe that Shopify would shut down seemingly legit and compliant businesses. But it happens all the time.

The problem is that Shopify Payments generally performs the complete underwriting and verification processes after your business is up and running. So you can make sales and build a customer base before Shopify verifies that you have a right to sell on their platform.

However, Shopify eventually does take a look at your business to see if it fits within their terms of service.

And if they don’t like what they find, you could face payment holds and account closure.

Shopify Payments is a payment aggregator, which means the platform allows other businesses to accept payments using Shopify’s merchant ID. This is why you’re able to set up shop and start selling almost instantly. You don’t have to go through the formal process of setting up a merchant account.

However, you are sharing one merchant account with millions of other merchants. If enough bad merchants open shop, they could jeopardise everyone else’s ability to sell on the platform. Because if Shopify as a whole runs into issues, so does every single merchant under them.

Shopify heavily scrutinises businesses once they’re on the platform. And if there’s anything they don’t like, they’ll close your account for good. Here are the most common reasons for account termination.

Like all other payment providers, Shopify must adhere to Visa and Mastercard thresholds for fraud and chargebacks.

However, the platform typically takes action before official thresholds are breached.

Merchants are forced to use — and pay for — chargeback prevention solutions like prevention alerts and RDR via “network dispute resolution programs” at Shopify’s discretion.

While Shopify maintains a detailed Help Center page with information on prices for these solutions, the reasons for their implementation are very subjective. No official thresholds or triggers are mentioned.

Therefore, it is difficult — or impossible — for businesses to know what level of risk is considered excessive and warrants termination.

If you sell something that violates Shopify’s Acceptable Use Policy — including prohibited products — then your shop could be shut down without prior warning.

However, you might sell a product that aligns with Shopify’s policy and still be shut down.

That’s because, according to Shopify’s policy, “most product eligibility or takedown disputes that entrepreneurs may encounter originate from outside Shopify, including from regulators and third-party IP rights holders.”

What does that mean? Let’s look at a couple examples.

• You want to sell rare trading cards, but the card manufacturing company claims you are an unauthorised seller.
• You want to sell branded products, refurbished electronics, collectibles, or other goods but a third party questions your authorisation, authenticity, or intellectual property rights.

Shopify claims they will give you notice if a third party requests your shop be taken down, but it is unlikely you will receive enough time to challenge the case before your account is closed.

When you sign up with Shopify, you agree to their terms and conditions — which essentially state that they can shut down your business for virtually any reason. Basically, they have the right to refuse to do business with a merchant — just like you can refuse to do business with any of your customers.

Typically, the reason for Shopify’s change of heart is a perceived increase in risk exposure. If Shopify suspects your business is engaging in unethical or inappropriate activities — indicated by customer complaints, bad online reviews, unexpected chargebacks, or fraud claims — your account could be closed.

When Shopify closes your account, a number of things happen instantly. Here’s what you can expect.

If your Shopify store has been closed, you have two options.

• Attempt to get your store reinstated.
• Start fresh with a different payment strategy.

Let’s take a look at both options.

Once Shopify makes a decision to close your account, it’s usually permanent. Technically, you can go through the Shopify account reinstatement process to try to regain access to your store but there are no guarantees it will work.

If you want to go that route, here’s a step-by-step process of what to do when your account gets suspended.

It is your responsibility to prove that your business followed all Shopify Terms of Service. Carefully review the closure statement you received and all the documentation you submitted when you signed up for an account. If you’re missing any documentation — such as an authorised reseller agreement — you will need to obtain those records.

Shopify typically sends you a link to submit an appeal when you receive an account closure email. This is your chance to share supporting evidence to prove your case and potentially regain access to your company information. It will likely take several weeks to hear from Shopify about their decision.

Even if you can show Shopify that you did nothing wrong and followed all the rules, there is a chance you won’t get your account reinstated. This is the sad reality of using ecommerce platforms for payment processing. So while you wait to hear back about your appeal, look into other payment processing solutions — such as a merchant account with AltoPay.

Even if Shopify does reinstate your store, do you really want to go down that path again? The platform has already disrupted your business once. Are you going to let them subject you to all that frustration, confusion, and revenue loss a second time?

Rather than waste your time and effort on attempting to reopen your store, it might be best to go in a completely different direction — your own merchant account with a dedicated merchant account provider.

You would have more control over your business, flexible payment options, more transparency with payment processing fees, ongoing compliance help, and helpful, on-demand support from experts in the field.

If you’re considering making a switch, check out what AltoPay has to offer.

When it comes to chargebacks, you have a lot of rights — and responsibilities. And those responsibilities can be confusing, frustrating, and time-consuming.

Fortunately, you don’t have to manage all those responsibilities by yourself. You have the right to get help from a chargeback expert.

Assistance can be as simple as reaching out to your processor or acquirer when you have questions — or as comprehensive as outsourcing tasks to a service provider.

If you’re not sure where to begin or how to ask for help, contact AltoPay. We’ll review your current situation and offer suggestions about the best strategy for your business.

Want to learn more about what AltoPay has to offer? Reach out to our team today to get started.