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Ask HN: Stripe holding funds for 120 days for no reason

158 points interesting_att | 6 comments | 22 Oct 22 15:43 UTC | HN request time: 0.203s | source | bottom

Hi Guys--

I started a Stripe account (even incorporated through them) for a basic graphic design and web design service business.

I process a few charges and even though I didn't get a single chargeback or dispute, Stripe decided to deactivate my account and said they would refund all the charges that were processed.

Which would have been fine with me. They said they would refund on Oct 17, but that date came and past. So I kept emailing.

Now they're saying they're holding all the funds for 120 days because of "elevated risk".

Which is insane because they have already withdrawn all the funds, meaning their risk would be zero if they refunded everyone.

I am beyond hurt and confused as I did need this money for my daughter. These decisions have real impacts on real families.

What do you do in this scenario? I have tried contacting support at Stripe but seems to be of no help.

1. zxcvbn4038 ◴[22 Oct 22 19:42 UTC] No.33301450[source]▶
This is pretty standard, if a card processor thinks there is high probability of chargebacks then they will hold your funds for 3-4 months to make sure they can cover those chargebacks. After the deadline for cardholders to make disputes passes then they release the funds.

It might not be anything you did personally, it might be based on location or business type.

Talking to them is probably the best course of action though the front-line people won't be able to make a decision. I'd lookup their CEO's e-mail and send a short "I'm a small business and my funds are being held 120 days, please help" and that will usually get routed to someone who can make a decision.

replies(2): >>33301511 #>>33301517 #
2. aliqot ◴[22 Oct 22 19:49 UTC] No.33301511[source]▶
This person's giving solid advice. In traditional payment networks, like swipers in a retail location, 30-90 days is standard, this varies by risk profile and SIC code, like comparing a deli to an ATM in an adult club. There's a lot of settlement and reconciliation and things that happen in the background.
3. CaptJax ◴[22 Oct 22 19:49 UTC] No.33301517[source]▶
Square started doing that with my business. Without warning or cause, they began withholding 20-percent of all incoming transactions in case of chargebacks. Makes me wonder if a regulatory change has occurred.
replies(1): >>33301659 #
4. abnercoimbre ◴[22 Oct 22 20:04 UTC] No.33301659[source]▶
This pattern is so pervasive with all the payment processors:

* Your funds are suddenly frozen. No easy recourse (if any)

* The percentage they withhold is suddenly higher. Tough luck

* Your business is deemed high risk and they cut ties. Their reasoning is a black box

Why is there never advance warning? It's the lack of courtesy that gets to me.

replies(1): >>33301894 #
5. jasonlotito ◴[22 Oct 22 20:27 UTC] No.33301894{3}[source]▶
> Why is there never advance warning? It's the lack of courtesy that gets to me.

They give you advanced warning in the T&C. If they gave more warning, this could assist people who commit fraud. Fraud is not some imaginary issue. It's very real and very problematic.

I'll say it again, get your own merchant account if you don't like this.

replies(1): >>33302505 #
6. Turing_Machine ◴[22 Oct 22 21:45 UTC] No.33302505{4}[source]▶
> If they gave more warning, this could assist people who commit fraud.

Sorry, no. Their inability and/or incompetence at avoiding fraud without mysterious hidden "rules" (i.e., security through obscurity) is their problem.

Not the customer's.

"Double secret probation". Bah.