Thread by @pyroas

How to avoid a $215,000 Stripe processing hold

A short thread…

1// 3 weeks ago I got an email from Stripe informing me of a 100% hold, requesting proof of fulfillment, inventory, etc for verification

I thought nothing of it, since they’ve done this 3 times in the past and it was usually resolved next-day after submitting evidence

2// So I processed $215k over 7 the next days, until they informed my business is too high risk (and 100% went on hold)….

Here’s how to make sure this doesn’t happen to you:

3// Keep a backup payment processor at all times. Plenty of alternatives, ask some friends for referrals

The moment Stripe emails you asking for documents to verify proof of inventory, fulfillment etc, swap out to your backup (until verification is complete)

4// Do NOT tell Stripe you dropship. Invoices from overseas suppliers are fine, but tell them you have a 3PL in your country

Most of my products are held in the US (and 20% is dropshipped), but during the review I forwarded invoices from my dropshipping agent out of laziness

4// If your LIFETIME chargeback rate ever goes over 1%, switch processors immediately unless you’re certain it will reduce in the coming weeks

My chargeback rate over the last 3 months was 0.43%, but my lifetime chargeback rate was 1.1% due to some Q4 delays last year

5// If you’re processing over $50k/month+ on Stripe, contact support to negotiate & reduce your processing fee

You’ll get a link to schedule a zoom meeting, and on that meeting also request a rep to be assigned to your Stripe account (rep will inform you of any future risks)

6// I personally still process on another Stripe account I’ve had for a while, but plan to switch soon

Scaling back to $30k days doesn’t feel safe with PayPal-like processors

There’s plenty of great alternatives to Stripe with 1/2 of the fees, do your research and you’ll find something much better

Hope this thread could save someone from a large hold in the future 🙏