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How To Keep Your Payment Processor From Holding Funds Or Terminating Your Account: What Small Businesses Need To Know

    Hsin-Wei Luang
  • 53 comments
  • Updated on:
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
Hsin-Wei Luang

Hsin-Wei Luang

Hsin-Wei is a freelance writer focused on small business and technology writing. Before becoming a writer, she worked as a techie lawyer for many years until she came to her senses. Now, in her spare time, she plays frisbee with her Mini Australian Shepherd dog.

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53 Comments

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    Coral Howe

    Problem: Go Daddy issued a refund to the debt card that they had on file that was associated with the transaction even though I had removed the card from my account
    1)the card had been hacked and closed by VISA
    2)The refund arrived and my bank did not connect it to my account
    3)The funds are being shown returned to Go Daddy through my banks processor First Data
    4)Go Daddy is saying they never got the funds they provided the ARN number which my bank acknowledges
    5) My bank in response has provided the documentation showing the refund back to Go Daddy
    6) Go Daddy is saying that since the ARN number is not on the statement from the processor it is not valid and it is my banks problem.
    7) Where can a go to get this resolved
    8) My bank says it doesn’t have the money and Go Daddy says it doesn’t have the money
    Is there anyway to connect the processor documentation the ARN

      Jessica Dinsmore

      Hi Coral,

      What a mess! It’s tough to determine who is really at fault here, but it sounds like GoDaddy made the initial mistake. It’s possible that Fiserv never issued a valid refund to GoDaddy, but it’s equally likely that GoDaddy has the funds, even though they say they don’t. We suggest reaching out to Fiserv for help, although they may or may not be able to help. If nothing else works, we’d recommend filing a BBB complaint against GoDaddy, and hopefully, that will encourage them to issue the refund. Good luck!

        Fadi

        Thank you for all the information you provided. I only wish I had read this before I began my journey.

        I am in a pickle with Stripe.

        They have terminated my account due to I don’t even know why to be honest.
        I am currently using Invoice2go for my business and decided to use Stripe thinking it will be an easier and faster process to pay the invoice for my customers and payments automatically forwarded to my account thru Stripe.
        Customers have a pay now button on the invoice I email to them.
        First payment from a customer went through Stripe with ease..
        Approximately 1-2 months later, two more invoices from the same customer were paid for using the Stripe pay now button. The two invoices were paid separately (not as one payment).
        I now have two payments in the Stripe account frozen or on hold and it can not be touched.
        I have tried to refund the money back to the customer but because I am no longer eligible for Stripe, it will not allow me to do so. The money is still in the Stripe account for almost 2 months and has not been refunded to the customer.
        I have contacted Stripe via email many times. The first few times they replied, explaining that the money will be refunded 5-7 days. I have contacted the customer and he has explained that he has not received any refund. The customer has provided proof such as bank statements to support his claim regarding no refund.
        I have constantly emailed Stripe since November 2020 as they do not have a contact number, but I have not received any reply. I have pleaded with them and have explained that I have the invoices and written documentation from the customer to prove the payment was authorised by him but no response from Stripe. I am located in Australia so if you could please provide any information based on a contact number or the next step for me to take to help me I would greatly appreciate it.

          Jessica Dinsmore

          Hi Fadi,

          It looks like Stripe has phone and chat support according to this announcement on their blog. I hope that helps!

            Ericka

            Hopefully someone can help me.
            I understand that the processor can hold/freeze funds, but can they refund money to customers if you have proof of a legal transaction?
            We are going thru this with our current provider, we don’t understand how it is possible if we have the proof and no charge backs. I understand if they want to terminate our contract but to give money back for merchandise our customers have received?

              Jessica Dinsmore

              Hi Ericka,

              On that proof of a completed transaction, did you submit the proof in the chargeback dispute process? If you have solid proof and you submitted it at the right time in the process, the bank is supposed to take it into consideration. At the end of the day, though, banks tend to be on the credit card holder’s side and typically find for them and make you disgorge the funds. Here, it sounds like you might be the victim of chargeback fraud. Here’s an article on the topic if you wish to find out a little more. We’re sorry that you have to deal with this type of fraud, and we know that knowing that this sort of fraud is typical for the retail industry won’t get you your money back, but hopefully the article arms you with the knowledge that you’re not alone in having to deal with this sort of consumer behavior.

                Gwen Anderson

                I haven’t been able to speak to a live representative at square up.com. Do you have a number on file that can assist me. My account was deactivated and they are holding my funds. I can’t believe that I have not been able to speak to a live person. This is extremely an unethical
                business procedure.

                  Jessica Dinsmore

                  Hi Gwen,

                  I don’t know if you’ve already tried this, but a quick google search populated this phone number 1 (855) 700-6000 along with the Square Support site. Good luck to you!

                    Pamela Donnelly

                    Great article! Thanks so much for putting all that detail in one place

                      This comment refers to an earlier version of this post and may be outdated.

                      Val

                      Ive had a hold on my account due to a credit card since 2015 withoutny any resolution. Ive even asked just take the money so I can start fresh yet they do not. Its been 5 years now…how long will they hold this money without taking it or releasing it?

                        This comment refers to an earlier version of this post and may be outdated.

                        Jessica Dinsmore

                        Hi Val,

                        We’d need a bit more info about your situation to try to decipher what might’ve happened here. If you’d like to email us at service@merchantmaverick.com with more specifics, we’ll do our best to help.

                          This comment refers to an earlier version of this post and may be outdated.

                          Amy

                          Hi Jessica
                          Are you still answering comments on here? I hope I get notified if you do.
                          My questions:
                          1- If using PayPal or really any processor, is it safer to send an invoice to customers if they’re purchasing a coaching session that is $200 or more rather than a buy now button on ones site?
                          2- or following up that buy now button with a short agreement once the sale goes through? That requires their signature with some wording about what they’ll receive and not receive (I.e. results are based on client implementing action)
                          3- I recently had a dispute go through with PayPal (I’m leaving them now as the experience was disappointing in how they handled this) that a person purchased a ticket to an event and didn’t show and then filled a chargeback with PayPal checking off service not received. I provided PayPal with a copy of my webpage that states no refunds as well as the customer receipt that states no refunds as well and they still sided with my customer. I then filed an appeal and forwarded emails from the client where she stated she was stuck in a meeting and was going to be late (didn’t think I would have to provide this) yet again they still stated insufficient evidence and refunded the client. Any idea what I could do loving forward to avoid this? I don’t know what other information I can provide when I was clear every step of the way that there are no refunds and obviously that would include if one is a no show.

                            This comment refers to an earlier version of this post and may be outdated.

                            Jessica Dinsmore

                            Hi Amy,

                            I would say for high value transactions ($200 or above) an invoice might be safer because you can attach a contract and send it directly to the customer who clicks a link and agrees to pay. With an online sale, all of that would need to be disclosed on the product listing page before the purchase.

                            Generally speaking it’s quite difficult for merchants to win chargebacks. This article on Preventing and Winning Chargebacks has lot’s of helpful advice for you, including chargeback prevention. Good luck to you!

                              This comment refers to an earlier version of this post and may be outdated.

                              John Haskin

                              Hello,

                              My MSP decided that the products my eCommerce site sells are against their Acceptable Use policy this week. Their policy is long, and cleanly broken down in to easily read categories, and I of course read it before listing anything, and have read it against since the freeze. Nothing I sell is on their list of prohibited item.

                              I have mentioned this, and their response is that they are able to add to it anytime, and my continue use of their services means I consent to their policy. That’s great, but this new “policy” is in their heads, and not written down for their clients to see for themselves.

                              I have even asked what item(s) caused the freeze, and they refuse to tell me, simply stating it is against their policy to disclose what it is that led to the freeze..as if it is a secret. Sure, it’s a secret because now they are going to earn interest off the $37,674 USD they have frozen of mine for the next 83 days.

                              I don’t know what options I have, if any. There is nothing in my store that other clients of theirs don’t also offer. Yes, my products aren’t sold by all (millions) of their clients, but I have searched enough to see that other clients sell the same thing.

                              They offered me advice, telling me to switch to a High Risk MSP, with higher credit card processing rates of course..but after about 5 minutes of research I discovered this other company is owned by them..and the Support Rep who recommended the other option had the nerve to go as far as sending me a URL with his Reseller ID in it, so he could make his affiliate commission.

                              I have chat logs, emailed by this MSP to prove everything I have said. Does anything I’ve said sound illegal on their part?

                                This comment refers to an earlier version of this post and may be outdated.

                                Jessica Dinsmore

                                Hi John,

                                That all sounds very frustrating, to say the least! I think your questions would be best answered by a lawyer because unfortunately our expertise about contract law is very limited and we don’t want to offer advice that we may not be qualified to give. That said, we’d recommend switching to one of our top rated providers. Best of luck to you!

                                  This comment refers to an earlier version of this post and may be outdated.

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