If you sell digital products online, chances are you use Stripe as your payment processor. It’s simple, integrates with most platforms, and—when it works—it’s a seamless way to get paid.
But recently, more and more entrepreneurs are waking up to devastating emails:
❌ Your Stripe account has been shut down.
❌ Your funds have been frozen for 90+ days.
❌ You’ve been flagged as high risk.
These shutdowns often come without warning, leaving business owners unable to access their money.
So why is this happening? More importantly, how can you protect yourself? Let’s break it down.
Why Does Stripe Close Accounts?
Stripe, like most payment processors, uses automated risk assessment tools to flag accounts that appear suspicious. The problem? Many legitimate businesses—especially those selling digital products—are getting caught in the crossfire.
Here are the main reasons Stripe shuts down accounts and how you can avoid becoming their next target.
1. High Chargeback & Refund Rates
Digital products—especially courses, templates, and coaching programs—are considered high-risk for chargebacks because customers can’t physically return them.
🚨 Stripe’s Risk Threshold: If too many customers dispute payments, your account gets flagged, and Stripe may shut it down.
✅ How to Avoid It:
✔ Clearly state your refund policy to minimize disputes.
✔ Use a terms & conditions page so customers know exactly what they’re purchasing.
✔ Offer strong customer support to resolve issues before they escalate to chargebacks.
2. Sudden Spikes in Sales
If your sales increase dramatically in a short time, Stripe may flag your account as suspicious activity.
🚨 Example: If you make £500 in one month, then suddenly hit £10,000 the next, Stripe’s fraud detection may freeze your funds until they verify the legitimacy of your transactions.
✅ How to Avoid It:
✔ If you expect a big product launch, inform Stripe in advance to prevent fraud alerts.
✔ Keep consistent sales activity rather than relying on large, unpredictable spikes.
3. Violation of Stripe’s Terms & Conditions
Stripe has strict rules about what types of businesses they allow. Many digital product sellers unknowingly violate Stripe’s policies and get shut down.
🚨 Common Reasons for Bans:
✔ Making income claims (e.g., “Earn £10,000/month”)
✔ Selling high-risk services (e.g., coaching with no refund policy)
✔ Offering financial advice without proper disclaimers
✅ How to Avoid It:
✔ Read Stripe’s Prohibited Business List before selling.
✔ Avoid using guaranteed income claims in your marketing.
✔ Make sure your business is compliant with Stripe’s policies.
4. Using Stripe as a “Bank”
Some business owners let money sit in Stripe instead of transferring funds to their bank account. Stripe doesn’t like this. If they think you’re holding a high balance, they may freeze your funds or close your account.
✅ How to Avoid It:
✔ Withdraw your earnings regularly to avoid being flagged for unusual financial activity.
How to Protect Your Stripe Account from Shutdown
Now that you know why Stripe shuts down accounts, let’s talk about how to protect your business.
✅ 1. Keep Chargebacks & Refunds Low
✔ Set clear refund policies and display them prominently.
✔ Deliver exactly what you promise—no misleading sales tactics.
✔ Offer strong customer support to handle complaints before they escalate.
✅ 2. Avoid Risky Sales Patterns
✔ Notify Stripe before a big product launch to prevent fraud flags.
✔ Gradually increase sales volume instead of massive spikes.
✅ 3. Stay Within Stripe’s Terms & Conditions
✔ Avoid marketing claims that suggest “get rich quick” schemes.
✔ Read Stripe’s restricted business list to ensure your niche is compliant.
✔ If your business type is flagged as high-risk, consider using an alternative payment processor.
✅ 4. Set Up a Backup Payment Processor
Never rely on Stripe alone. If your account gets shut down, having a secondary payment method will keep your business running.
✔ PayPal – A widely used alternative but also known for sudden account holds.
✔ Systeme.io – A great option for digital product sellers.
✔ Authorize.net – Ideal for businesses processing large transactions.
✔ Square – Reliable for both digital and physical product sales.
✔ High-Risk Payment Processors – Platforms like PayKickstart or Digistore24 cater to businesses flagged as “high-risk.”
What to Do If Stripe Closes Your Account
Even if you follow all the rules, Stripe can still shut down your account without warning. Here’s what to do if that happens.
🚨 Step 1: Contact Stripe Support
✔ Sometimes, account closures are automated mistakes.
✔ Politely ask for clarification and appeal the decision.
🚨 Step 2: Request a Payout of Your Remaining Balance
✔ Stripe may hold your funds for 90+ days before releasing them.
✔ Ask if you can withdraw your balance sooner or if they need additional documentation.
🚨 Step 3: Set Up an Alternative Payment Processor ASAP
✔ Don’t wait—set up PayPal, Square, or Systeme.io so your sales aren’t interrupted.
✔ If your niche is considered high-risk, explore high-risk merchant accounts.
🚨 Step 4: Diversify Your Payment Options Moving Forward
✔ If Stripe shut you down once, they might do it again.
✔ Using multiple payment processors ensures you’re not dependent on one platform.
Final Thoughts: Protecting Your Business for the Long Term
Stripe is a powerful payment processor, but it shouldn’t be your only option. If you sell digital products, Stripe may classify you as high-risk—so be proactive in protecting your income.
🔹 Key Takeaways:
🚀 Don’t rely solely on Stripe—have a backup payment processor.
🚀 Keep your chargebacks & refunds low.
🚀 Make sure your business complies with Stripe’s policies.
🚀 Transfer funds regularly to avoid unexpected freezes.
The best time to prepare is before you have a problem. If you’re using Stripe, take preventative steps today so you don’t wake up one morning to a shut-down account and frozen earnings.
Your business deserves stability and security—don’t let one payment processor control your future.