Merchants on the Shopify Forum have been reporting that Shopify has notified them that they will being forcibly keeping a 25% cut of merchants earnings for 120 days.
This means that if your store is deemed to be "high risk" by Shopify, they will hold 25% of your earnings as insurance against furture chargebacks on your store. At the end of 120 days, Shopify will give you your shop's earnings back, or "unfreeze" them.
This policy is an unfortunate one, it's really punishing you the merchant for a lack of fraud prevention on their platform.
Every merchant on Shopify is susceptible to chargebacks, your shop's goods affect your risk level but Shopify's own fraud tools aren't effective at detecting and beating fraud.
You are at risk of having your earnings frozen in the Shopify escrow account if:
Your chargeback rate is the total in revenue that your shop generates vs the total in chargebacks.
For example, if you store generated $1,000.00 in sales, and you also received ~$100 in chargebacks, then your chargeback rate would be 1%.
This is because 1% of your total sales resulted in a chargeback.
100 / 1000 = 1%
You can use our app Real ID to verify your customers identities on risky purchases. If you have an above average order amount or you see strange behavior or order details from a customer, then use this app to verify the customer's identity.
By verifying your customers identities, you can prove to the payment processor that the owner of the billing credit or debit card was one in the same as the customer's ID.
ID verification is easy with our app, you can have it automatically send ID checks to your customers with automatic rules like:
Unfortunately chargebacks are part of business, it's like loss prevention for ecommerce. Real ID will help you lower your chargeback drastically and cheaply.