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The dark side of Shopify (twitter.com/mattzollerseitz)
782 points by danpalmer on July 9, 2022 | hide | past | favorite | 221 comments

This exact thing happened to us. We have a store located in Puerto Rico and Shopify would randomly stop payouts every 3-4 months or so because they needed to re-verify our owner address information. Apparently, most of Puerto Rico is not verifiable by their shitty address verification API, so it triggers the freeze every time it retries the verification. It was one of the most frustrating experiences I've ever had and cost us thousands of dollars.

Stripe also did the same exact thing for very similar reasons and at one point we had over $300,000 USD frozen with them, which was basically our entire monthly payroll expense. We had to explain to our bank why our accounts were suddenly drained. This one was worse than Shopify's since we actually never received any communications notifying that this was going to happen. At least we got an email from Shopify that we just hadn't noticed.

They're all broken. And Know Your Customer needs to eat shit and die.

Address validation is the biggest piece of automation that needs to stop.

You're not going to stop people from misentering addresses, and many countries have terrible validation or streets that don't exist yet take forever to show. Or the system that suddenly decides to start doing validation doesn't actually accept valid addresses.

Companies think automation can handle it, but it's an absolute nightmare.

> You're not going to stop people from misentering addresses, and many countries have terrible validation or streets that don't exist yet take forever to show.

I live in a place where the official address changed: as in we got a letter (in 2016 I think) from the town hall saying "your address is now ... and you have to ask everybody to mail you at that new address". Well... Most utility bills' systems have been programmed in a way that make it impossible to keep the same "installation ID" (as in the ID on our electrical install) while changing the address. Somehow "the street got a new name" is a case that had never been planned.

The implications are wild (for example the bank refusing to open an account because the official, legal, address doesn't match the address on the utility bill and then the contry's IRS thinking there are shenanigans going on).

That's in a civilized, western EU, country.

It's Brazil (the movie).

> That's in a civilized, western EU, country

This feels a lot like Germany (from experience).

Address validation is not 100% reliable, so systems should have an override "Yes, this is my address" option. Unfortunately many forms assume address validation is foolproof, so there is no mechanism for entering in your actual address. It just gets rejected.

As a customer, I wanted to buy something and the website wouldn't accept my address (since it wouldn't accept any "/" characters). Guess what? There are plenty of addresses in the US with "/", such as 50 1/2 Foobar Street. Address validation does not always work, so companies shouldn't act that way.

Try living in a newly built building. Every developer seems to be under the impression that if an address doesn't exist in the Google maps API, then it doesn't exist at all.

Or streets subdivided into clusters of houses with their own numbering systems for legacy reasons.

"4 Blah Terrace", "4 Foo View", and "4 Bar Lawn" are all within 100m of each other, have the first half of the postcode the same, etc.

Google Maps/etc can't handle this at all.

Or subdivided houses are common here in Australia, where it's suddenly 11B Some Street.

Yes. I’ve stumbled upon some organizations in small towns in the US that want all postal mail going to their PO Box, nothing going to their physical address.

The small-town post office will sometimes _delete_ the physical address in the mail system so the actualy physical address is completely in-valid (or worse gets autocorrected to an address a mile away).

Turns out FedEx and UPS base their address validation off USPS and also don’t ship to PO Boxes.

...many countries have terrible validation...

In "federal-style" countries like USA, it is possible for some jurisdictions to have adequate validation while other jurisdictions (e.g. the rural county where I live) do not.

The problem was really why keeps validating an address if there was no change since marked as verified?

Bitcoin literally fixes this. Bitcoin is the first public infrastructure for sending money online without intermediaries and trusted third parties. This is the problem it solves, yet any mention of this on HN gets downvoted.

You can use something like https://btcpayserver.org/ and be your own payment processor with very little work.

Kind of frustrating that HN hates bitcoin so much, that even under link/article about small merchant getting harassed by shopify/stripe, they would rather downvote any mention of real solution..

It may fix this particular problem, on one side of the transaction, but it creates new ones. What if I, as a purchaser, want to dispute my purchase? What if I was ripped off? What if the product was broken, not as advertised, etc. I like knowing there is recourse through chargebacks.

For example, I rented a vacation home last year, on VRBO, and the highly unusual contract (that was not shared until after the purchase) made me very uncomfortable. As an aside, I was also surprised that I was billed directly by the rental company via Stripe, rather than through VRBO. I requested a refund within an hour of booking.

For two weeks, I attempted to contact the rental company. I never received a single acknowledgement from them, and VRBO provided zero support. The only way I was able to get my money back was with a chargeback, showing my request for a refund within the cancellation window.

I am 100% confident that if this had been a bitcoin transaction I would have lost that money. I would also expect a rise in bad actors abusing that lack of recourse if bitcoin did increase in popularity for payment. In my mind, that is the challenge that crypto needs to solve before it can become widely adopted as a payment option.

Forget chargebacks: the wildly fluctuating price of BTC means that even a good-faith retailer can't offer refunds without risk to either the buyer or the seller. The price of BTC has risen almost 40% in the past month; how do you settle this without either side feeling like they've gotten ripped off?

I agree that this is still a challenge that needs to be solved in better ways. There are some solutions possible. For example OpenBazaar used 2-of-3 multisig escrow. Bisq is using security deposits, limits and reputation. For some large transactions there are legal escrow services. But for small regular transactions with most merchants, there is no good standardized solution so far. You just have to do your research about about the counterparty and trust the merchant as far as transaction goes.

Consider crypto payments as cash payments and the problem(your expectations from a payment provider) is "solved"

Or for services/goods that requires this kind of leeway, use an escrow.

Yes it does introduce a third party, but the point is that compared to the current system there is no other option for the many cases in which you don't need don't want to use an escrow, the payment processor invariably act as such and can shutdown your business at will.

A system that requires me to put transactions in escrow more often than extremely rarely is not a system I want to use.

It's a system you already use if you use credit cards. The payment processor play this role by assuming the counterparty risk and issuing chargebacks when they deem it appropriate.

I don’t know if BTC fully fixes this, but I agree that crypto in general is heading down the path that will likely fix this. And agreed, HN continues to hate crypto due to 99% of it being garbage, and ignoring the 1% that is actually revolutionary.

“'I never thought leopards would eat MY face,' sobs woman who voted for the Leopards Eating People's Faces Party.”

It doesn’t matter if 1% of cryptocurrency useful and not a scam: because 99% of it is, if you use crypto you’re going to get scammed.

If you use money you're going to get scammed

The key is that the vast supermajority of your interactions with fiat won't be at high risk of being a scam.

Because you are familiar with fiat/cash and its risks and you use crypto only for "crypto" stuff not to buy your groceries.

You won't send cash to someone you don't really trust, would you? How is crypto different? With paypal you get some "security" with the tradeoff that sometimes you won't get it(i.e you get scammed either as buyer or seller) and many times it just pissesoff both the sender and receiver using "fraud detection" and treating both as criminals.

That's why I say bitcoin and not crypto.

The main issue with crypto is the exchange rate and volatility. The local ATM gives you a shitty rate on bitcoin and by the time you spend it its value may be lower or higher by a big margin. The merchant may experience a similar issue.

There are some ways how you can solve this. You can convert to and from stablecoins. You can use hedging and use cfd or futures to keep your bitcoin on stable fiat value. Depending on what you need, this can be done on exchange, with some payment gateway or even trustlessly via smart contracts.

So, I use fiat to buy bitcoin, convert it to a stablecoin, go buy lunch, convert it back to bitcoin, then the merchant converts it back to fiat. Why jump through all those hoops to buy lunch? or anything for that matter. At this point i could just use gold.

I'm talking about the reality and in the real world the solution you propose does not exist. For some reasons stablecoins do not seem to be used outside few online exchangers.I can't find them available at the local atm.

All the solutions I mentioned do exists and are used daily by thousands. And no, atms are indeed not the place to exchange bitcoin for stablecoins.

You're ignoring something critical here.

The whole reason these address validation and KYC measures exist is to protect against fraud. They aren't done "just for fun".

Please explain how bitcoin solves for that problem. Hint: it doesn't.

Ohh so the old "paypal" issues are back. Fortunatrly there is a true peer to peer payment technology: "crypto". Unfortunately it's been hijacked by speculative "investors"

And requires centralized exchanges subject to Know Your Customer regulations to get your money out as fiat.

It the ecosystem of the "crypto" is self contained, and both the sender and receiver are living in the ecosystem, then they may not need an exchange.

(As long as the transaction throughput and transaction fee are reasonable)

Does Evertec (or other PR-based payment systems) have a solution for Puerto Rico businesses selling to customers outside Puerto Rico?

I don't know, but we've tried our hardest to migrate all of our software as far away from Evertec as possible. We're still stuck with their payroll software that still requires a Java Applet on Internet Explorer. It's horrible.

This problem seems endemic to big tech platforms, particularly when money is involved. I remember hearing similar stories about PayPal a decade ago (still do for what it’s worth).

While I can understand the desire to not interact with a user of the platform (shopify, google, PayPal, etc), because of the cost, and because many are likely to be bots or actually fraudulent. It’s precisely at these edge cases when computers and automated performs the worst.

These are the situations where the scenario is imperfectly modelled in the system. Maybe the engineers didn’t think of the edge case, or an ML model never had training data to cover it.

Point is, it doesn’t matter. People problems need people solutions. Remediating edge cases involving people’s livelihoods strikes me as most likely a people problem.

When you’re asking a person or company to trust them in a business relationship into the future, such as by being their shopfront, there’s only so many you can destroy before word gets around. I haven’t used or recommended businesses to use PayPal for a decade, because I saw them time and again inflict pain and financial stress with no recourse.

As another example, look at the general sentiment around Google Cloud. Would you build a business on top of it? Does that include an exit strategy to multi-cloud, because you’re unsure if they’ll support the service you use?

If you can’t scale to provide a human to help other humans caught in the edge cases of your own system, then you need to acknowledge you’re causing harm.

A dog food company that kills a puppy every week, is really a puppy killing company that sells dog food.

It’s a matter of perspective yes, but if you got into it to help feed dogs, surely the last thing you would want to do is harm them?

And if you became aware your killing puppies, would it not be the top priority to ensure it never happens again?

Paypal lies and tells you you can take money out of a US account without linking, instead taking funds out via mailed check. But in fact it does not allow for this. The UX has a dark pattern that will lead you to think this option exists, but it will fail. Any mailed check attempt will end as an error.

Customer service escalation confirms its not possible to take funds out without bank link.

Instead of refunding 5k to customers and asking them to inconvenience themselves by paying again via ACH, we had to open a new bank account.

I repeat.

I went as far as opening a new bank account with a new banking institution that would be solely used to link to PayPal.

Do not link paypal to any core business accounts. You really should segregate your core business accounts from any linking, stripe etc or yodlee-type service, if you can help it.

Let the payment relationship be between your bank and your customer bank only.

No middle man. No surprises

What alternative for PayPal?, and what for cloud?( I know things like linode, but I mean big cloud).

There are many alternatives for PayPal; stripe being one but there are many others as well that won’t totally screw you as merchant like PayPal does. I use a local one who actually defend me when there are chargebacks and I can visit and talk to a human in case of other issues.

+1 for using local providers for critical infrastructure, especially financial stuff. If something like this happens to me and I can't achieve anything through support channels (which is already unlikely), I can get on a train and go bang on the provider's door within 3 hours.

local Stripe? local "one" means what?

A local provider/company of processing payments online. Local meaning near me.

@tluyben2 thanks for the clarification, appreciated.

What's the "general sentiment" around Google Cloud?

Not just Google Cloud, any google service in general. If you have a problem or one of their "AI" systems locks you out, then you're out. No way to resolve the issue.

HN seems to think it’s impossible to get access to a human, but I’ve had Google engineers fix my Python code that inexplicably didn’t work in a cloud function.

What tier support was this, and how long did you have to wait?

You talk about automation, but a lot of these bad decisions are made by humans! Overworked and underpaid ones.

Shopify should be scrambling to do a public post-mortem right now. They "Fixed" the situation within a few hours of the tweetstorm, showing that they know they f'd up. Shit happens - but how does shopify assuage small businesses that this won't happen to them next? A public apology, post-mortem and steps to make sure this never happens again.

Unless this ends up being widely reported in the media, most of their customers and potential customers won't even hear about it, and it will only change the behavior of a small fraction thereof. Shopify doesn't have to do anything, and they know it.

Even if people read enough of these that Shopify stops seeing new merchant signups…I don’t think Shopify would understand WHY they’re not getting any new customers. They’d probably blame it on SEO or something.

I think their plan is to not acknowledge it so it doesn't blow up any further. Fix the problem and let this person tell their story until they run out of steam.

You're overestimating the impact. This is just one of thousands of similar stories, none of which has gotten a public apology or post-mortem.

It seems to me companies beyond a certain size become so dysfunctional that no one person can handle a situation like this coherently. It's all different factions internally each pursuing their own objectives, protecting their turf or fighting for survival. It's likely there's not so much the customer service team could have done.

It's not like a small business where the owner themselves can guarantee high quality services

It's not dysfunction, it's purposeful negligence, to save money.

Nobody at Google or Amazon will ever be fired for writing code that bans a few too many people, or labels legitimate users as fraudulent. It simply does not harm the company at all. A few people here on HN talk about how their small group went with an alternative, or they personally de-google'd, but for the rest of us, the option is cross your fingers and hope or just do what will happen when you get banned anyway.

it does not sound fixed to me. It sounds like they're still threatening this small business because the business' own bank flagged payments shopify took from their account, and were reversed, and shopify can't justify the charges, and is again threatening them. I don't see anywhere its resolved, just that they sent a reply.

"sorry because we got caught"

Sorry to hear about your situation. A lot of people have been pointing to the "roll your own" versions of e-commerce stacks.

We've been running e-commerce for the last six years, and have tried everything (woocommerce, open commerce, bigcommerce, magento, prestashop).

They are all light-years behind Shopify.

We've had bumps along the way with Shopify as well (similar problems to yours).

A few thoughts:

- Know who you are in bed with : Shopify Payments is actually Stripe Platform in most locations, and PayPal in Europe. We refuse to work with PayPal because of their predatory behaviour, so we choose not to use Shopify Payments in the EU.

- The Shopify Payments platform is for better or for worse a "start without friction, KYC later" experience. Be aware of what this entails.

- Get on RocketReach, find key people in Shopify relevant to your problem and send a succinct email asking for assistance. It's unblocked every problem we ever had

- Do the same with your merchant processors : Edwin from stripe actively reads HN, and can often provide assistance on Stripe related issues.

- Get lawyers. Not the Go-Sue-the-Pants-off-everyone lawyers, but business / commercial lawyers. Not only can they provide excellent advice for your business, they often spécialise in these types of situations to have conversations and results that you can't access individually.

At the end of the day, know your business partners and establish a relationship with them.

Using a combination of the above, we've survived competitors using fake C&Ds against our processors and platforms, amongst other things.

Do you have more details why Shopfiy is light years ahead of the other ecommerce platforms you mentioned?

When you say you're running ecommerce - you mean your own shop or building ecommerce solutions for others?

Shopify surely has the highest amount of retailers for ecommerce. There might be more websites selling with magento, but when it comes to actual retailers being active right now, it’s the best and most popular option. Retailers don’t have the tech knowledge to roll out their own tech so it won’t be an open source DIY platform so most will start with shopify.

Their App Store is the biggest, which as we know from apple, it is quite important for your ecosystem. You want an advanced inventory tool? A 3pL? A new packing slip app? A new discount app? Any of the best apps out there that are actively developed are integrating with… shopify.

Are you sure about the paypal in europe? AFAIK you can set it up Stripe only if your country supports Stripe which most of EU does.

We use Stripe as our primary, when Shopify Payments became available in our region (France) it routed through Paypal.

I couldn't see any backend option to select the preferred Shopify Payments backend processor, but would be interested if you have insight into how to achieve this.

In what gives weight to the GP, we enabled Shopify Payments, confirmed it went through PayPal and switched back to Stripe to avoid the "process with PP for a week and then have them freeze your funds for 6 months" grind.

What Shopify did wrong was that it wasn’t fast enough to respond with transparency. However, I do agree with them in requiring proof that 3rd party sellers have a legal right to sell “trademarked” or “branded” products especially for books. Amazon is so rife with fake products that it’s no better than eBay now. I can no longer impulse buy on Amazon. Depending on the product, I will check if there are 3rd party sellers using Amazon warehousing. If there’s any evidence of commingling, I just buy it elsewhere. We’ve been slowly using Target more and more since they have limits on inventory commingling.

I’m not entirely convinced that Shopify should be involved in IP enforcement. Amazon, despite all their claims to the contrary, acts as a retailer. When shopping at Amazon, Amazon is helping you find products and even makes it look like Amazon is selling them.

Shopify, in contrast, stays in the background. For the most part, unless I recognize the checkout flow or see the shoppay option, I, as a customer, don’t even know that Shopify is involved in a transaction. I’m not buying, in any material sense, from Shopify.

It's MC/Visa that's forcing Stripe and therefore Shopify to "police" for trademarked goods. MC/Visa are effectively determining what people can and cannot sell online. If the US accused you of selling trademarked goods, the burden of proof is on them. With MC/Visa, good luck getting a chance to even provide proof.

The unholy duopoly MC/Visa has absurd amounts of power. Just look at how bad anything in the adult sector has it with them - instead of the card networks requiring multi-factor authentication to combat PII theft and "post-nut regret" fraud, they rather raised fees on merchants or cut them off entirely. Or how they acted as police, jury and executioner in the Pornhub case - the allegations were indeed severe, but they should have been dealt with by the courts and not a payment processor.

That’s an even bigger antitrust issue, because processors shouldn’t be policing Shopify without doing it to Amazon.

It’s not antitrust because it’s not (as far as I know) against the law. That being said, I think that VISA and MasterCard should be required to act as common carriers and to serve any lawful business (where lawfulness is determined by courts, not by VISA and MC).

I agree here. Dealing with visa/Mastercard is the worst.

Exactly this. The Financial Times just had a good exposé on this recently about Visa and MC and the adult industry. The processors shut a huge amount of sites down because they refused to process their payments any more because some hedge fund bro who was anti-porn knew the MC CEO. They completely control commerce online.


I wanna bet Shopify’s legal department, and their budget for lawsuits, may disagree with your opinion. I have to imagine running a huge online store backend or payment processing system has huge fraud departments. If their platform allows fraudulent activity to run rampant (i.e. no checks on intellectual property, etc.) then many companies will go after them for diluting their brand and other types of legal matters. They can get money out of Shopify but they’re not going to get anything out of someone selling fraudulent product.

I agree with others in this thread - they should provide a layer of actual humans to help shop owners. And have a process for dealing with AI/ML gone rogue - like the address verification system in this example - where a set of humans can override and make sure a shop owner can continue to operate. Heck send someone to PR to help validate addresses every month.

An actual sensible legal regime could be a bit like the CDA safe harbor, or at least more like what CDA safe harbor should be. If an intermediary like Shopify provides services to its clients, does not help users choose which of its clients to work with, declines to exercise discretion as to which clients to work with, and cooperates with court orders, then it should be immune to claims that it chose the wrong clients.

I just was about to buy P100 filters on Amazon but all the listings say they are fake. Amazon combines the inventory of all the “same” product together and it lets fakes get through. For me, it’s not worth the risk of getting a faulty filter so I’m just going to Ace. As you said Amazon needs to crack down on these counterfeits.

>I do agree with them in requiring proof that 3rd party sellers have a legal right to sell “trademarked” or “branded” products especially for books.

lets say a bookstore goes out of business and I buy their stock and sell it in my own store. Do I need proof that I have legal right to sell those books? First sale doctrine is established law - your discomfort with 'fake' books has nothing to do with anything - no one said anything about counterfeit goods. They're asking them to get some 'proof' they can sell merchandise they bought to sell.

Shopify doesn’t want potential fakes, and many customers like myself are sick of them. My discomfort with shady 3rd party sellers has a lot to do with it because I will take my business elsewhere, or eat up customer support hours and ramp up costs related to returns and exchanges.

It’s a free market. There are plenty of other online platforms to choose from that don’t care whether or not they sell fake garbage. You can also create your own online store if needed.

Apt username

The first sale doctrine (both the copyright first sale doctrine and the trademark first sale doctrine) doesn't apply to counterfeits.

As a customer, yes I will require proof before buying anything from your hypothetical store.

If Shopify can provide that assurance to me - I will transact on Shopify-hosted stores more with confidence.

Even if there are no 3rd party sellers currently, it's possible they were active before and the current stock is still commingled. The only thing I use Amazon these days is for white-labeled Chinese goods. For everything else I prefer retailers with an end to end supply chain.

Buying from Amazon can be really frustrating to buy from. I was looking for wool the other day. 100% Australian wool. But it’s spun in China. 100% Canadian cotton yarn!!! Spun in China… it’s hard to find something not made in China even if you’re willing to pay for it.

I'm afraid the EU Digital Services Act (which states that platforms are not "liable for hosting content unless they know it is illegal") will lead to more problems like this.

Platforms will want to be safe, and will content block up-front, meaning it's the user who has to prove the legality of what they are selling. Good luck with that (as the Twitter thread demonstrates).

It's not just merchants (until reading this I actually had the impression that Shopify's intention was to protect merchants at all costs). I've heard many horror stories from other developers in the Shopify Partners Slack Community. For developers this is potentially even worse than it is for merchants, as many Shopify apps simply cannot be migrated to another platform (and your customers can't follow even if you are able to).

The stories I've seen appear to come under two scenarios.

1. A new developer builds their first app (significant up front time investment). Upon submitting their app, Shopify bans their account giving some vague reason such as 'developer's name matches that of a known terrorist' (are names globally unique now?) or 'we believe your business presents a level of risk that we will be unable to support'. Shopify doesn't explain beyond that, and further communication is impossible. All the developer's hard work and trust in the platform comes to nothing, and Shopify doesn't care.

2. Existing developers with successful apps are suddenly delisted from the app store or even shut down entirely. New installs are not possible. Shopify refuses to explain the reasoning. Months pass without any resolution as the developers lose users and revenue.

In the latter case, many partners suspected that these apps were being delisted due to competitors paying for services to flood their app with fake positive reviews, knowing that it would lead to the app being delisted. I don't what came of this situation; whether the matter was finally resolved or those affected just moved on; as I've seen nothing since (this was about 3 months ago). Shopify gave a few vague acknowledgements in Slack along the lines of 'we are taking this seriously, but can't offer details', but nothing more. The casual and/or secretive way Shopify dealt with these cases (where a developer's livelihood is at stake) makes me very worried that I could find myself in a similar situation at any time.

It's not even act first, ask questions later. It's simply act, case closed.

Shopify wasn't always like this. It's a recent trend.

“developer's name matches that of a known terrorist”

Happened to my wife, who has an extremely common name, when ordering something online and the shipping company blocked her package. infuriating…

Thanks, so much better than twitter.

Why doesn't Twitter look like this? Now that Jack departed and the Musk dilemma, perhaps they can start disassociating from their troubled pasts

I don't see the improvement? Nitter has smaller text and is in dark mode. It seems slightly harder to read.

Maybe it's what you're used to.

The main difference is the amount of JS bloat. Twitter takes many seconds to load and navigation is sluggish.

Try both twitter and nitter on a mobile without the twitter app.

run by comitte

I suspect this is more of a stripe problem than a Shopify one. Having dealt with them shutting down our customer accounts on several occasions with no information as to why and ambiguous documentation requests that seem to go on forever, it seems perfectly plausible to me that this was just as frustrating for Shopify as it was the customer. Doesn’t mean they couldn’t have handled it better, but I’ve definitely experienced the other side of this story and it’s awful.

Nope, it's de rigeur for every ecommerce company. Shopify legal gets some BS email from some big corp, and they slap some vague technological solution on it ("flag anything thay says Star Wars"). Then they get a bunch of overworked, underpaid people to try and enforce their nonsense policy based on the results of the tool. Ultimately they get what they want, because they frustrate these problematic small customers into leaving the platform. Meanwhile they continue to bend over backwards for Jeffree Star or whoever because he'll have a hissy fit on Youtube if his flash sale doesn't happen at the right time.

Almost like tech solutions don’t always scale to handle international growth. That can’t possibly be right though… Growth is the only thing I’ve ever known. What will I do now? Nobody’s going to let me play with hundreds of millions of dollars if I merely make something that “works correctly”.

(Dead inside and being sarcastic, btw)

No, they just can't scale to handle people because the founders are rubbing themselves just thinking about all the automated money. Anything that gets in the way of the money printer gets crushed.

The author mentioned they didn't like that transaction fees are not given back during refunds but unfortunately both Stripe and PayPal do the same thing. They started doing this a few years ago.

If someone buys your product for $100 and Stripe's fee is $3.20 and you issue a refund to someone you will refund the user $100 and Stripe keeps the $3.20 so that refund really cost you $3.20.

To the processor and other entities such as the credit card companies and banks that are involved with processing the transaction there isn't much difference between a refund and charge. Both use most of the same resources on the same infrastructure the same way in the same amount.

If you had a deal where you were directly exposed to all the fees involved, what I'd expect is that you net fee on a transaction would be composed of fees from three different categories.

1. Per transaction fees that apply to both charges and refunds.

2. Fees proportional to the charge amount that apply to both charges and refunds.

3. Fees proportional to the charge amount that only apply to charges.

On a charge you'd pay the fees from all three categories. On a refund you might get back the fees from category #3 you paid on the charge, but you'd again pay the fees from category #1 and #2.

For example if you sell an item for price P and the fees from the three categories are F1, F2, and F3, your net gain on that transaction is P - F1 - F2 - F3. A refund transaction has a net gain of -P - F1 - F2 + F3. That would bring your total net for the combined charge/refund to -2 F1 - 2 F2.

This we should expect some net fee for a charge followed by a refund. For small transactions that net fee could be up to almost twice what the fee was for the charge alone.

Most processors though don't directly expose you to all the fees. That's because there are a bazillion different possible fees with each different subsets applicable to any particular transaction. So most processors expose a simplified structure based on averages over a large number of transactions across similar merchants. Most merchants prefer that.

When doing such a simplified fee structure, they could set charge fees based on the average for F1 + F2 + F3 and refund fees based on the average F1 + F2 - F3. But refunds should be much less frequent than charges, so it seems find to me when doing a simplified fee structure to just average the refunds in too, and just deal with fees on the charge side of things.

Yeah, I wonder what provoked both Stripe and PayPal to start doing this after not doing it for like 10 years. They both did it pretty close to each other from what I remember.


I understand that it's common practice, but here Shopify froze their ability to withdraw but still took orders.

I don't know about Stripe, but PayPal refunds PayPal fees if you refund the customer. Net amount in and net amount out are the same.

>PayPal refunds PayPal fees if you refund the customer.

Your information is outdated. PayPal keeps the fees now. https://www.theverge.com/2019/9/20/20876570/paypal-refund-fe...

Maybe on new accounts? I looked in my paypal portal and they are still refunding fees for my refunds

Yep. It’s very sad for the owner. And I empathize. But a lot of things they blame shopify for is actually the exact same across the ecommerce spectrum.

Honestly, i strongly suspect there is more to this story.

If there wasn't, seems like it would be a slam dunk lawsuit.

I also dont understand why they continued to use shopify if shopify was keeping their money.

Yeah I feel the same way. I read his comment thread but it didn't really add up and seemed written in an over the top way. Too me that means there is more to the store than this one side. We will never know the full account for sure.


From the linked tweet thread:

> But all of our Deadwood items are critical, journalistic, or transformative & HBO legal told me they're fine with them existing.

If this is actually true - and that's a big if - then the problem is that HBO doesn't think the work in question is infringing, but Shopify does. This is a huge problem with any kind of intermediary liability, because intermediaries do not have the capability to fairly adjudicate copyright cases. If you're selling, say, a review of copyrighted material, that's fair use. However, the problem with fair use is that it makes even the most basic copyright inquiry that much more complicated. Publishers and copyright owners don't want to have to consider fair use for every strikingly-similar infringement out there. They want platform owners to have to fix the problems they created, and they know that they will do so in the most half-assed way possible. That means fair use goes out the window - why risk six-figures-per-infringement judgements at all when we can just ignore it and refuse to host fair use content?

That being said there's still problems with the original tweet's argument here. There is a huge gulf between "we don't think this is infringing" and an actual licensing agreement. At best, HBO might be estopped from suing over past infringements, but they have nothing else to mitigate the risk of their store's existence and no promise that HBO doesn't change their mind tomorrow. Copyright owners like this kind of strategic ambiguity - licensing agreements have rather high transaction costs, and every one you sign means another exclusive license[0] you can't sell anymore. They don't want to have to go after every infringement either. They want to be able to grant and revoke their largesse at will.

[0] i.e. the lucrative ones. There are entire categories of licensing where nonexclusive licenses are basically worthless and nobody will accept such terms.

> If this is actually true - and that's a big if - then the problem is that HBO doesn't think the work in question is infringing, but Shopify does.

Let us take this on face value and assume this is the case.

If so, they should have given him notice and suspended the site, yet according to this thread, they kept allowing orders and taking money from his customers to the tune of $7000, but not transferring it to him. That's pretty shady and definitely does not absolve them of any potential liability.

Matt apparently authored books on The Sopranos and Mad Men. And according to him in the twitter thread, HBO helped setup interviews and such for the book. If it has access to HBO like that to write the book, if they didn't like him selling soap they would probably raise it with him directly. Not go to shopify.

Not sure if the “histrionics” is that over the top or any indicator that they have something to hide. Might simply be the style this person tweets, which can be understandable given how frustrating this situation seems to be. (People easily lose all their calm in such situations and I find the tweets mild tbh.) If anything, the explanation he provided about Shopify being afraid of being sued by textbook copyright holders and even Star Wars copyright holders might make sense.

> I responded with an email restating that the First Sale Doctrine makes such a request both nonsensical and illegal, and asked a few more questions.

The rest of the thread notwithstanding, this is not what First Sale Doctrine does, at all!

Instead of above, if replying (for the benefit of this community) why not explain how or why you disagree?

I don't even see the above in the tweet thread, but i think its pretty obviously true that the first sale doctrine doesn't make it illegal for shopify to ask more about your business and where you are getting your products from. They don't need any excuse to ask that, they are allowed to ask their customers anything they want.

If you buy goods from an authorized place and sell them, you do not require any authorization or proof to sell those 'branded' goods, because first sale doctrine means that the original seller has exhausted their legal rights to control the sale and distribution of those items.

So it sort of is what first sale doctrine does. shopify is asking them to produce proof they have authorization to sell something they've already purchased and need no special rights to sell, regardless of whether they're branded or not.

> If you buy goods from an authorized place and sell them, you do not require any authorization or proof to sell those 'branded' goods, because first sale doctrine means that the original seller has exhausted their legal rights to control the sale and distribution of those items.

Right, but it doesn't make it illegal, as stated by the seller, for Shopify to have these requirements.

I'm giving the seller full benefit of the doubt that they were not selling anything that violates copyright / trademark law. The point is the doctrine still doesn't make Shopify's request or requirements illegal.

Shopify banning you for not producing documentation is not a violation of first sale doctrine.

Just like a web forum banning you for posting something annoying is not a violation of your constitutional freedom of speech.

The current law and constitution don't protect you from these actions.

Nobody said its a 'violation of first sale doctrine', merely that first sale doctrine precludes a requirement to be authorized to sell legally purchased 'branded' items.

Since shopify doesn't actually tell them what items are an issue, it is requiring them to compile a full accounting including 'proof' of their ability to sell all of their items within 48 hours, or else suffer financial consequences when their store is shut down.

So it doesn't involve the constitution, but rather its shopify's unreasonable and unexplained policies and vague threats that are causing financial damage to this small business owner, demanding something that might not exist at all, because no special rights are required to sell 'branded products' legally purchased, and shopify will not specify what the issue is, so demands such an accounting for the entire store within an unreasonable length of time.

>Nobody said its a 'violation of first sale doctrine'

These seem to be saying that:

> I’m gonna have an update for you later today on my continuing communications with @Shopify. They are now asking for purchase receipts to sell Star Wars books on their platform. This is both illegal and nonsensical.


>As detailed higher up in this thread, neither Shopify nor anyone has a legal right to demand documentation in order to sell, resell, give away, or otherwise dispose of published material, according to the First Sale Doctrine. Big thanks to Twitter mutuals for hipping me to this.


>I responded with an email restating that the First Sale Doctrine makes such a request both nonsensical and illegal, and asked a few more questions.


>"All of this was not only unnecessary but illegal as covered by the First Sale Doctrine."


I agree with you that what Shopify is doing is bad and doesn't make sense. Freezing or taking money might be illegal. But I would think it's not illegal for Shopify to ban an account due to some system flagging it as suspicious, because I assume the Shopify TOS say they can do that.

You're assuming his use of copyrighted and trademarked material is authorized.

They're selling books and even soaps with "deadwood" in the name, and they / the publisher (sounds like they're both run by him?) appear to have directly lifted the photo for the cover of one of the books:


...from here: https://deadwood.fandom.com/wiki/Deadwood_(episode)?file=Sea...

My guess is that Seitz got nailed by trademark and copyright infringement claims and is now spinning a story about how his poor poor book shop is getting screwed over by the Big Evil Corporation, as witnessed by the very histrionic language he uses in his tweets.

Trademark cannot stop someone from using that word on an unrelated product like soap. Nor can it stop someone from using a word in a book title.. Is Amazon killing the book industry? is a valid book title.

> Nominative fair use generally is permissible as long as:

> ...

> (3) use of the mark does not suggest sponsorship or endorsement by the trademark owner


I'm not a lawyer, but "Deadwood Soap with a Prize Inside: Dirt" sounds like it could suggest sponsorship or endorsement to me.

Of course, as teh_klev pointed out, this most likely isn't the cause of the store's Shopify problems since HBO says they're OK with what the store does.

Isn't this what lawyers are for? Seems like he's just spinning his wheels trying to get through at the customer support level.

Hiring lawyers is probably going to cost more than the 7000 dollars taken from him. Large companies probably spend that much on their legal teams per hour.

100% this is the problem with our current legal system. The little guy is going to have to pay, by the hour, for a lawyer. Where as shopify has, I'm sure, an entire team on the payroll. It costs shopify, in effect, nothing to battle this until the heat death of the universe (or the little guy runs out of money, which ever comes first)

IANAL, but shopify is a canadian company not american, so if the seller wins wouldn't they also get legal fees - which makes it harder to bury them under legal fees?


I don't get this logic - why shouldn't he express his anger, frustration and annoyances with shopify publicly? If I was in his position I would do the same too, whether it gets me some response from Shopify or not. Even if I hired lawyers, I would still prefer to tell the public about shitty customer service, especially if it costs me money and time.

I think we both agree that complaining in public is cathartic. However, it isn't always the most productive nor protective (of your own emotional state) option available. If that is realized at all, it typically is only with hindsight.

Just from personal experience, on more than one occasion, I've spent hours on hold with a company getting nowhere, fired off a couple of quick tweets, and the issue has been fixed in 10 minutes. I have about 300 followers.

Is it a guarantee? Absolutely not. But it can work, and if the amount of money involved is too small to make involving lawyers worthwhile, it's often your only remaining option.

How else would you suggest handling the situation of needing to recover $7000 that a company owes you but they refuse to acknowledge your existence?

From several cases we’ve seen here on HN so far, it seems to be a quite effective strategy for finally getting through to somebody at that tech behemoth and having your problem swiftly resolved (even if you may say that “theoretically” this shouldn’t be how it works in a society perfectly based on contracts and on the rule of law, depending on your viewpoint). Much better than directly starting a lawsuit, no?

oh.. I had assumed this referred to the _technical_ dark side ..

Was just toying around with porting a friends very successful shopify store to another platform .. noticed the main home page weighed in at 89MB .. wowza. [ To be fair a lot of that was large pngs which are much smaller as jpg or webp ]

Scrolling thru the endless html/css/js page sources injected plethora of 'liquid' inclusions, I can only describe as otherworldly.

It would take some very large images to add up to 89MB, even if they were png. I'm guessing they were not sized correctly for the web.

indeed ..

Top offenders were essentially 2048 pixel wide png photos which should have been 1024 wide jpgs at max - weighing 6MB instead of 250k for a difference the human eye probably cant detect : )

but.. more than that, just an endless stream of js html css inclusions .. I suspect 85% of which is dormant, 20% actually repeated, if I were to guess.


I'd hazard it's mostly images and/or the plugins the store has installed to track conversions and / or extend the Shopify store. I do admit plain Shopify stores/themes are quick and lightweight, and the plugins are to blame, but I also point at Shopify for blocking some easy features to be supplanted by plugins.

It's easy to shoot yourself in the foot with Shopify dev, especially since many merchants are non-technical and there are an unlimited number of very cheap Shopify "dev" shops that will paste anything you want into your theme with no regard for bloat.

Many people running brands, either professional digital marketers or small business owners, have absolutely no concept of page weight. I continually fight battles about this with the various ecomm brands my employer owns, and yet when a marketer updates the home page content somehow we still wind up with 20 MB above-the-fold autoplay movie files.

Fun fact: Shopify user accounts are a disaster. Customers cannot stay logged in to your site for more than 24 hrs.

Maybe the shops you’re using have done that on purpose? I worked on a shopify storefront for the past year and our users stay logged in for an indeterminate amount of time.

We actually have a problem figuring out the exact amount of time their access token stays valid as it seems random, from a week to a month to 3 days.

Also sad that Shopify isn't all that good. Their scale enables them to have a community with helpful guides and videos and stuff, but the actual product is arguably less sophisticated than what competitors offer. What they have is a zinger of a name and a big marketing budget. Anyone in this space should really check out alternatives. Unless there is a specific plug in or use case you want to use there is not much good reason to choose Shopify.

Sophisticated is not what is called for in a LOT of ecommerce setups. I have assisted employers and clients with Shopify, Bigcommerce, Miva Merchant, and selling on platforms like Amazon and eBay. For most "small business" style use cases, I find Shopify far better than the others, because it's a lot easier for the business owner (who isn't an ecommerce expert) to run, and they don't need or miss the flexibility that the others offer. Invariably it costs more to configure and run something like bigcommerce, and that's only justified if you actually need what they offer.

> Anyone in this space should really check out alternatives.

Please quickly name your top three. Then we can check the veracity by seeing how they get dissected by HN pundits.

It has been a while since I evaluated these, so this list is probably not all that good right now. That doesn't change the fact that Shopify is flat out not that good whether you are comparing features or price. And this is all the more reason to check out current alternatives available now instead of thinking you can get what you want from heated discussions with people on HN: volusion.com, ashopcommerce.com, bigcommerce.com are the first that come to mind. This is a big market so it might make more sense to make a list of the top dozen or so and then look more at the ones that offer features that have value for you.

What are your favorite alternatives, particularly if there is one that allows for use of a pin pad for in-person sales?

I make my living as the developer for a few large e-comm businesses that all use Shopify and it works really really well. I never get why people (devs especially) call out whatever feature they think Shopify should have without realizing that pretty much anything you could want to do is enabled by their API.

Custom pricing for certain customers is a nightmare on shopify. I have built several sites and even made custom apps. I have figured out work arounds, but they are less than ideal. Do you have some ideas that I missed?

It's definitely easier to discount pricing than it is to increase dynamically.

The wholesale store functionality has customer based price lists. I've also added products to cart with a discount amount as line item property, which is then picked up and discounted by line item script. Some concern there with people manipulating it but I think it's pretty theoretical and there are ways to combat that. Both those require Plus though.

They announced the new backend pricing API/web assembly script thing a couple weeks ago that seems like it will solve this issue for real.

Similarly to how the subscription stuff was pretty janky with apps until the selling plan stuff. That said, it got the job done even if it wasnt ideal, and now they have a good solution. I prefer that model to just rolling out a bunch of half baked features.

Responding more to the parent than you now, but in most cases if a business claims to critically need some specific feature, I wonder if they are not just married to the specific solution they have in mind and not the underlying problem. But if they really do need a specific thing, then certainly looking for the platform that offers it makes sense.


An e-commerce site on which I have 4weekly subscriptions of multiple products has an astoundingly bad UX ... and it's driven by Shopify. Either Shopify's recurring order system is fundamentally broken, or this particular site is misconfigured.

In either case, it's a deficiency of Shopify.

As stated, Shopify has no recurring subscription system (which is astounding since it seems basic enough for them to offer, but I guess they're getting profits either way). I've experimented with a few popular recurrence "apps" and I can say that one of the most popular ones was awful to setup and maintain. I chose a more indie option (Seal Subscriptions, if you're a Shopify store go check them out) and got much better results.

Shopify has no recurring system. They are using a plug-in.

That's on Shopify, not them.

Literally nobody uses Shopify because of its cms features. They use it because it quick cheap and easy to set up a really good looking ecom site that has tons of good integrations for shipping/business needs/etc.

What are some of the alternatives you’d recommend?


primarily volusion.com, but it is a big space and often one or two key features make an offering work for a particular enterprise

I just read the entire Twitter thread. What a Kafkaesque nightmare.

This seems pretty damning and I had considered Shopify to start my own online store selling products that I make in the future.

I am curious if anybody has suggestions for good alternatives to Shopify for building an online store?

I don’t understand how shopify is predatory. Shopify isn’t a merchant processor, they don’t hold merchant funds. Stripe is the merchant processor for shopify payments. They are the ones that froze the payments. Freezing money has no benefit for Shopify.

Hazard of white labelling. If shopify brands the product and sells the product, they own the outcome.

Yeah but some things pierce the white label veil.

Grocery stores have been out of all sorts of products this year and the normal response isn’t “this is an outrageous failing of Kroger” it’s “Kroger isn’t able to source Wheat Thins because of various supply chain issues.” Same story with everything in the tech sector.

If you went to McDonald’s and they couldn’t process your order because Visa banned you then that’s not really on them. Or in a more individual level you probably don’t get told “well you should have picked a better car supplier” when you call off work because your car breaks down. Customers are also pretty understanding when shows or channels get yanked due to contract disputes.

The bigger issue seems to be that it wouldn’t have mattered who they went with and any financial institution would have yanked them after getting a chargeback from their bank.

Kroger is clearly selling someone else's product in wheat thins. Visa is not McDonaldsPay.

These examples are different from white labelling.

On the other hand, this book store hired Shopify, via ShopPay, to handle payments. The good and the bad now belong to Shopify. (I'm not claiming to judge fault)

> Grocery stores have been out of all sorts of products this year and the normal response isn’t “this is an outrageous failing of Kroger” it’s “Kroger isn’t able to source Wheat Thins because of various supply chain issues.”

There's a level of trust that you have to have with a service provider over something like a grocery store.

If you're at a grocery store, and your card is declined due to Visa blocking you, you did not lose out on money. If you're selling things on Shopify, and have shipped orders that you're expecting Shopify to pay you for and they do not pay you, there is now a loss involved.

I don't know how Shop Pay is engineered, but Shop Pay is Shopifys payment processing platform. I don't know if they're using another provider such as Stripe on the backend though or if they've gone through the PCI compliants.

With that said, just because you're not the one processing payments doesn't mean you're not the one holding it.

Shopify has operated as their own payment processor for a few years.

Note: I work in the payments space.

Shopify is one of Stripe's largest customers and a very heavy influencer of their roadmap (example: Stripe Treasury, BillPay (coming soon!), and more!)

Not yet. Still stripe. I assume their eventually do it as they seek larger merchants that will require interchange plus billing and not blended.

ShopPay is 100% a thing.

Shop Pay by is powered by Stripe

Still uses stripe.

Shopify Payments is a Stripe wrapper.

Untrue. They use Stripe.

Companies need to spend more money on customer service. Period. End of story. But it's expensive so they would rather risk fucking over a percentage of their customers in hopes that they can contain any problems.

At some point, governments need to step in and regulate this once their customer support to customer ratio drops below a certain percentage. Otherwise it's a form of tax that creates extreme victims and its usually the small customers because big customers can always pick up the phone and call someone.

EBay, Paypal the same.

Admittedly, it's hard to be an intermediary, because the sheer amount of fraud you there. These companies become, due to liability etc. a kind of 'financial police' which isn't their role.

And then have to do that for every little jurisdiction.

I suggest that there needs to be way more transparency about their own terms, and paths to redress grievances.

But probably we need to change regulations a bit as well for e-commerce.


I got scammed buying a NAS from a smb electronics shop recently. No one will ever know. No one cares.

Logically I think it's far more likely that big companies are compliant because they operate so much in the open and are under constant scrutiny. Every disgruntled customer has the potential to go viral and do enormous damage.

With the most empathic sigh: Shit happens. At big corps most of it. Relatively, probably not.

An option for a crypto payment system could make a difference for this seller and shift some of the power away from Shopify. They would have no way to block access to funds or restrict a willing customer from paying the seller for an item.

There should be an option for a payment provider that is a credibly neutral protocol.

Unfortunately the "default" crypto payment acceptance providers people use are user hostile (Bitpay, Coinbase Commerce).

Other options (BTCPayServer) are available, but they need more work to integrate.

That entirely depends on if shopify is still an intermediary in that scenario or not.

aaand get downvoted by HN crowd in 3, 2, 1.. :)

WordPress / Magento / OpenCart + Stripe / Authorize.net / BrainTree / Paypal. Why use Shopify and depend on it? Host your own stuff for nearly free ($2-5) and pay very little for the payment gateways.

Shopify charges additional 1% per transaction for 3rd party payment integrations. Weird.

I work in payments. I'd guess the 1% on top of 3rd party integrations is to encourage folks to go through Shop Pay, which is owned by Shopify.

As for why people don't self host, it's likely just easier not to. You start off on an easy platform because who knows if your business is gonna work, then the business grows and you're already on there so why self host when it's working right now? And you continue down that path until it doesn't anymore.

For most Shopify sellers, that 1% is still less than it would cost to pay the person to setup what you're suggesting. Really not weird at all.

Shopify nickels and dimes you at every chance.

We are a very long established bricks and mortar Irish retailer that chose to go online with Shopify and use Shopify Payments for online transactions only at the beginning of the pandemic. Today, we were given essentially given a couple of days to provide invoices from all our suppliers and letters of authorisation from each of them.

We have a lot of suppliers all over Europe and this is the 14th July. To say that we are angry would be a gross understatement.

Still surprised to this day there isn't some installer that just handles everything once you give it a webhost and the payment processor you want.

You can bring your own merchant account to any saas e-commerce site and not have to worry about getting your money frozen. Most banks offer merchant accounts and you just pay for a gateway like authorized.net. It’s going to be $30/m gateway and $30/m merchant account + setup fees.

Yeah, that's how I used to do, and it was quite simple. I actually had much much more trouble with things like Recurly (whose API and packages are absolute garbage, IMO) and even Stripe than with the simpler gateways.

The only problems I had were solved with a few phone calls, as I had a bank manager very interested in doing business with the company I was working for.

But I was not in the USA/EU when I did this stuff, so I have no idea if Stripe and co. have improved things or not. For me (I later moved to Europe) it was a massive regression.

Does Shopify have a marketplace like Amazon ? Ie discovering the products and stores ? I’m struggling to understand the face of it.

Someone should invent a value transfer technology that routes around middlemen. Censorship resistant, so to speak.

Shameless plug: this is exactly why I built SimpleStore. An easy way to manage a small store without worrying about the platform changing the rules on you. https://chrisdiana.github.io/simplestore/

so, I get that shopify brings more to the table than just payment processing. but I'm surprised that nobody here has brought up regular SEPA payments and SEPA direct debits.

Of course they will only currently work in the EU, but fast, reliable, cheap direct transfer systems might be a model other countries could implement. The benefit is that banks (at least in Europe) are quite a bit more regulated than e.g. shopify and random lock-outs like this shouldn't be as common, or at the very least should have clearly defined escalation mechanisms.

In terms of customer protection as well, direct debits are super nice here in EU.

Holy crap… they made them take down a “Star Wars” section of their site? Why?!?

Bitcoin fixes this. Ditch the intermediaries and 3rd parties.


EDIT: aand get downvoted by HN crowd, how unexpected :)

"0% fees" (apart from the transaction costs, which are significant, and never mind how long it takes the transaction to go through)

First of all, nowadays you should be using Lightning Network, where fees are negligible and the payment is finalized and settled in order of seconds. BtcPay server has first class integration of Lightning Network.

And second, even if you want to accept onchain payments, current onchain fees are something $0.2 for confirmation within an hour. Which seems reasonable for having final settlement without any intermediary of your funds this fast. Compare this with traditional payment options like credit cards where you are waiting often times 30 days or even more for settlement and as the OP illustrates, you are at mercy of intermediaries.

BTC fees are basically fuck all these days, and you can just use LN.

Stop playing the victims on how the angry HN crowd has downvoted you.

You’re being downvoted because it’s a bookstore that sells to the general public. Less than 1% of their customers would know how to pay with bitcoin, and even for those who do, they would likely keep their bitcoin and hold them right now since it’s at a 1-year-low instead of using it as a currency.

It’s just not helpful to the situation. That’s why you’re being downvoted.

Those are valid concerns, the "hodl only" mentality, the volatility.. but you do you see discussion about this on HN? No, just downvotes. I kind of doubnt that what you say is the motivation for the downvotes. I think if you are being honest, for some reason the HN users just hate bitcoin.

It's time to legally compel platforms above a certain (modest) size to treat their customers and users "fairly", transparently, and without discrimination. Because giving a competitive advantage (from economies of scale) to actors willing to sell their independence to some giant corporation is rapidly leading us to where we are at the mercy of those corporations for even the smallest commercial activities, such as buying or selling a book.

Such a state is incompatible with a free society, unless you redefine restrictions on freedom as only what is done by the government. A definition that is little comfort to businesses bankrupted by unaccountable corporations.

It makes perfect sense that as a firm’s market power grows, it’s regulatory burden scales appropriately.

Until it turns into regulatory capture, whereby the regulatory burden prevents others from growing their business beyond a certain point.


"Transparently" has major issues for dealing with bad actors, which needs to be taken into account when crafting any regulation.

I would probably try to start with just making fairer appeals processes and such (some sort of third party arbitration system, in this case, is probably better than just companies getting to set their own individual and opaque and hard-to-comply-with policies).

> "Transparently" has major issues for dealing with bad actors

So I've been told. What I haven't been told is how telling a spammer that they were banned for spamming (instead of the opaque "breaking terms of service") helps them evade detection in the future. They already know they were spamming, and can be 99% sure that's what they were banned for. It's only the innocent that don't know what they did wrong.

To really do anything, you'd need to know which specific emails/interactions broke the rules, which would give people trying to find the very edge of acceptability useful information.

"You're being TOS'd because your email titled 'Foo' on the 3rd of July breaks our spamming rules" tells you that your email titled 'Bar' on the 2nd didn't, and you know what you did differently between them and now you know how far you can push before being caught.

It's a bad situation - ideally good actors could get useful feedback to help avoid accidentally crossing a line, but bad actors will absolutely abuse any kind of margin thy can find.

Because people want to know why they were considered to be spamming. Then next time they will make sure not to do it that way.

> Because people want to know why they were considered to be spamming.

You're arguing against a suggestion no-one has made. I'm proposing to tell them what they did wrong, not how they were caught.

I've dealt with moderation before. The immediate response is something like "I wasn't spamming." or "Prove it." Basically, just saying "you're banned for spamming" is the same as saying "you're banned" - both spammers and unfairly banned people will follow the same path from there.

Presumably the point is that the spammer operates many identities and can systematically determine details about the spam detection system by observing which of their identities get banned.

And yet transparency is a major element when dealing with bad actors in the physical world in democratic countries. If a suspected murderer is brought to the courts, they have the right to be informed what charges are brought against them, and the right to request all relevant documents from the accusing party to defend themselves.

Why are Internet platforms unable to do that, other than it's too much of a hassle and makes our business unsustainable? Which may be a legitimate reasons for the platforms, but are not legitimate at all for society as a whole.

> It's time to legally compel platforms above a certain (modest) size

I personally don't agree with "modest" but having two (or more) classes of corporations to divide laws and regulations between seems like an obvious step in the right direction. Right now there seems to be "monopolies" and everything else. Obviously Amazon or Shopify are not the same as a family owned business; treating them as such should be the exception not the norm.

This isn't facebook. Shopify is B2B. I assume there are contracts involved. If shopify is not holding up its end, there are already legal avenues to compel them.

> If shopify is not holding up its end, there are already legal avenues to compel them.

The issue is that you can't use the standard, low cost venue for small b2b disputes (this one was over $7,000): the local small claims court. Most contracts will stipulate a convenient venue to the author of the contract (which may cost more than $7k to litigate if you are out of town). Federal court requires a bigger injury and won't hear your case. In many jurisdictions, business cannot self-represent in small claims, so even if it is available, it's expensive. You end up hiring outside counsel, even if you have lawyers as employees which raises costs a lot, and opens up the possibility of a suit where the awarded legal fees dwarf the amount in dispute.

don't most of these sites, like Shopify, require arbitration for disputes?

or do you worry about actually enforcing an arbitration decision?

Enforcing arbitration is usually pretty easy - most of the time the company will honor the decision. It's when they don't that is the problem, or where the situation is not a contractual dispute that can be arbitrated.

> I assume there are contracts involved. If shopify is not holding up its end, there are already legal avenues to compel them.

The answer to consistent bad behavior can't be "well, just sue!" because the US court systems are already underfunded and jam packed as is. It just doesn't work to (only) have breach of contract lawsuits in David v. Goliath (202X) suits.

If a platform is big enough, it will write one-sided contracts permitting their abuse.

I wish everyone could wrap their mind around one thing.


Anytime someone suggests a good idea like this or says "we should" you need to go back to the root of the problem. The system is designed to give all the breaks and funnel all $ to the top. That is the way corporations want it and they own the politicians.

This isn't government incompetence or some idea that you came up with. This idea will not be implemented because it would benefit the 99.5% to the detriment of the 0.5%

Doesn't scale :P

Nortel syndrome takes over another would-be Canadian giant (what do I mean by that? read up on the crazy behavior of the bubble era Nortel; for Shopify there will be a pre bubble valuation crash era and a post valuation crash era).

Just because they’re Canadian doesn’t mean they’ll be Nortel. Nortel had one money making division and a bunch of money losing ones. Gross mismanagement ended them. Shopify looks very different than Nortel (or Blackberry) did.

Why the hell would you continue using Shopify if they are freezing your accs/etc?

Put a banner up on your site saying the shop is down temporarily, rebuild a barebones version of the site just for ecom, etc.

Shopify needs to do better, but I can’t help but question the business decisions made by op.

The thread talks about preorders already sold via Shopify. Switching away doesn’t help with those.

they did switch - the issue were sales already made within shopify, and two charges to their account from shopify that shopify did not identify why they were taken such that the small business' bank considered them to be suspicious.

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