Stripe Withholding Balance of $100000 | Hacker News Reader

Stripe Withholding Balance of $100000

11 pointszenkoakishaga17 comments

Hello

Just for context. We are in fashion industry. Selling handcrafted pieces online. We have been in business for 2 years, using Stripe as our primary method for Apply pay, as it is a comfortable payment method for clients.

Recently, last week we have become viral and our sales sky-rocketed, piling up hundreds of orders and about 100k in account. 4 days later, our account payout is frozen by Stripe. All payout blocked. No notice. Nothing.

Bear in mind our businesss is legitimate and all clients are legitimate.

We reach out to Stripe through chat and we are responded by the template responses. That it is under review and that they can take 24-48 hours.

We then ask to speak to a Manager, and after a hassle and going forth and and back a nanager calls after 2 hours, who doesnt even want to state his full name, only his First name, which we dont even know if its true, and then wheh we insisted he said he cant say their full name.

He then says that he will review the account and then come back with follow up on email, and nothing happens in the 48 hours elapsed, so ..

We contact stripe again through chat and aftwr a round of another hour we ask to speak to the Manager,

3 hours later, another lady calls, which also just states only her first Name, and gives us the same useless pretext that the account is under review and that someone is looking into it and that she escalated our case, but now she says that the timeline is 2-3 business days is the general period, but it can take more than that in extensive cases.

Here i get frustrated, and ask her, you are withholding our money, our clients money, on what terms? What us under review? We are legitimate. Clients are legitimate. She respons that she can not tell me that right now, it is not in her power, and that she can not tell me a maximum deadline.

If it takes longer it will affect our brand identity since it financially blocks us.

Now, I would like to know and am open to suggestions on what to do next.

Lawsuit? Go to the news and make them public for this scrutiny? Is it legal what they are doing? Is there a contact on HN that can solve this over Stripe please?

I read some old reviews and some comments stated that there are quite some contacts from Stripe here, so i thought to give it a chance.

This Stripe behavior has become an epidemic these years...they have fully automated their infrastructure, especially now with AI and they false positively flag the wrong companies and then they complain that people label them as the "baddies".

I have wrote a public post on LinkedIn addressing this issue of yours and hopefully someone will get notified and help you out.

Now we wait...

Update: I'm in discussion with their Stripe Support department right now.

Update2: ..and now, we wait!

Final Update: They told me, if you have a LinkedIn account, go there and contact "Stripe" account and tell them your issue; "Stripe Support" account will contact you within 5 to 10 minutes and verify your business data so they can help you.

Good luck!

Update 2: stripe has reached out to us on email after receiving business registration, invoices, products photos, bank statements, and they stated that the review can take 15 days or maybe more if it is the case.

Is there anything we can or suggest that we do?

Thanks dear

Thank you very much for the indepth research and implication! Highly appreciate it! Thank you!

Will create a linkein account and contact them

You are doing it right. Publicly shaming them on HN is the only way to get a real customer service.

These things would be much easier if stripe were willing to actually explain what the issue is.

We can come up with all sorts of reasons - anti money laundering, concerns around charge back etc…

Why can’t stripe just say the reason?

Update 1: stripe has reached out asking about Business registration license: which they already had, invoices, inventory of products, bank statements. Already submited. Let see what happens. If I am not mistaken, this prelonges the period to another 2-3 business days if verification?

Only giving out a first name is entirely normal to protect staff from malicious activity, eg doxxing and harassment, and if you have recorded the times of your calls should be entirely enough to legally identify those staff members in court if required. (You are noting the times of your calls to them and their approximate content?)

At this stage with an unusual flow of money of that order into your account Stripe is likely obliged to consider Anti Money Laundering and similar investigations for a start, and delay to handing on the cash is likely its main risk reduction tool at this moment.

Yes, we have made evidence of the duration of each, location of call, name of Manager.

Alright. While I understand that, a quick or even complex review would show that our business is legitimate, clients legitimate in 1-2 hours tops if we are being honest, but its already breaking our cashflow and we are 3 days in with our account blocked.

Is there anything we can do to urgent this matter and unblock our account?, we really need to honour our hundreds of orders at a timely manner. This affects our image.

I would advise: reach out to your clients directly. Be happy that they chose to purchase from you, explain that delays are happening due to the rapid increase in popularity, thank them for this opportunity to learn about international business at scale.

Inform them that you will be expediting the shipment of these orders in the sequence which they were received as this is the only fair way to prioritize orders, instead of the 'larger' orders or 'more profitable' orders having priority.

Offer to cancel and refund any orders where the customer is not satisfied with this response to the delay which is out of your control. These customers will in the end be more difficulty than they are worth, and trimming them out of the production line ASAP will expedite those who are understanding and patient.

Be sure not to 'blame' your processing handler, this delay is simply standard due diligence against international money laundering and other nefarious situations. No amount of assurance from you that it is legal and lean absolves them of the requirement to confirm these facts independently. Stripe's compliance and legal department is doing exactly what they must do, it will take whatever time it takes to resolve, and if you truly are verifiable and above board this delay will quickly resolve.

The communication with customers will strengthen your relationship with the fraction of them who are good, steady, and likely to become both repeat customers and good referrals.

Even the ones who choose not to wait a bit for your best quality goods, will be able to tell people that you communicated clearly and gave them the opportunity to walk back their purchase with no hassle.

And in a few days time, you can get to work filling the sudden orders. I advise not withdrawing those funds all at once, or spooling up the scale of production as this will lead to quality control issues.

Take your time, work down the orders with the very process that made you become a viral success, and deliver your best quality with updates and clear communication. Turn this from a one time rush of massive orders into a steady, reliable, continual slope of growth building into a trusted provider of fine handmade products.

Withdraw those funds in small stages, only as much as is necessary to purchase materials and pay workers for productive time; no sudden raises or advances against work not finished. Take any 'earnings' only after all non-cancelled orders are shipped and delivered.

/large_market_advice

If payout is stuck for "2-3 business days," you still have account access, and you're still capable of accepting funds, you should probably just relax. Odds are that everything will be fine by Tues or Weds. If the transactions are legitimate and you can prove it, then the odds that they'll confiscate your money or hold onto it for an extended period of time are very, very low.

Not a bad idea to set up a secondary payment processor for growth, though!

Hopefully dear. The matter of confiscation is out of the subject, main issue would be delaying the review and holding our account for a longer period since we need cashflow for prime material, labour, supply, honouring our orders, etc.

Our main clientele has shifted to USA, so cant think of any good processors for Apple Pay, accepting America express. Paypal requires an account from the clients so it would make the process harder for potential clients, thereafter the rate of abandoning carts would ger higher.

Everyone has a paypal account in America fewer have Apple pay.

What to do next wait for the review to finish (or some longer timeframe has passed) if you are unhappy with the results then you can bring this to a lawyer.

Is it legal, yes it's in your terms? They are verifying its not a scam and not money laundering.

"If it takes longer it will affect our brand identity since it financially blocks us."

Look into additional payment providers you should at least have paypal checkout already on your site.

If your revenue pattern grows quickly, money will be held for longer in expectation of chargebacks. If none happen during this period, and all checks pass it will be released. This happens because if they release the funds they will be on the hook for the 100k + charback fees, which depending on the size/number of your transactions, could be higher than your entire 100k.

Their docs explain this.

> account payout is frozen

Frozen payouts are different than money being held for longer.

You are correct, stripe will do one or the other depending on how loud their alarms were. Being frozen though might just mean they took action rather then letting the usual timer run. Not defending stripe here, but it seemed like a 3 day freeze on a sudden revenue jump was to be expected.

If/when they get through this, they should start pushing for an account manager.

If that’s the reason, why don’t stripe say so when they block the account?

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