Share on facebook
Share on linkedin

Ultimate Guide To Avoid Stripe & Paypal BANS With A Shopify Dropshipping Business

It’s really important, no matter what type of online business you’re running that all of your payment processing or merchant accounts are in good standing. If you’re not, and constantly throwing out red flags, funds withheld, getting a lot of chargebacks, and eventually getting your account shut down, how are you going to receive payments for your online business?

Using PayPal is a huge advantage when it comes to online transactions. Based on studies, up to 20% of customers only use Paypal for store transactions because they trust Paypal more than simply putting in their credit card details in some random online website (if you’re dropshipping).

This problem is pretty common for online businesses but more so for drop shippers, due to long shipping times, and lack-luster customer service.

How can we stop this from happening?

Why you should read this article:

  • Learn the standards of a Customer Service
  • Where to find and how to build a relationship with good suppliers
  • How to add tracking information in Paypal & Stripe once it’s shipped out
  • How leaving cash reserves in your payment processors will help

1. Learn what makes for a good Customer service

The customer is always the top priority. The customer has to be happy with the product and customer service as at the end of the day, they have the last say. If left unsatisfied, they have the power to file a dispute on Paypal, get a chargeback with their banks with just a click of a button.

The more this happens, the more your merchant account suffers, and more likely it is to get shut down.

Always treat your customers right! Some common issues that may cause a customer to be unsatisfied with the product or service include:

  • Delays in shipping or didn’t arrive at all
  • Product defects/ mismatch with expectations
  • Customer shipped the wrong product

The problems listed are part and parcel of running an online business, it’s how you react to them that makes or breaks your business.

The most straightforward solution send the product again for free. If they’re really upset or don’t want to do business with you again, just refund them and not deal with the constant back and forth and risk them filing a chargeback even after the product is shipped again.

For minor problems like delays in shipping, you can give them discounts or free shipping on their next order, some are happy to receive that and even though you’re getting them to buy from you again, It’s seen as good customer service

Another thing is to be upfront about your shipping times, this is really important especially when you’re dropshipping, and items can take up to 2-4 weeks to ship out to certain countries. The customer needs to know this in advance.

You may find that some people still are unhappy even when you state it clearly on the product description page or FAQ page. That’s not enough and you need to drill that information into your customers.

Here are some of the places you can add in your shipping times:

  • Underneath add to cart button
  • Footer
  • Edit email templates to say “items have been shipped, please allow 7-14 days in the US or 10-30 days to deliver overseas”
  • Shipping methods in the checkout page – For example “ Free Shipping (7-14 days)” They’ll have to manually select on the shipping method on the checkout page so they’ll never miss it.

Also, when a question comes in from Paypal, try to keep all the disputes away from Paypal, where it can be easily escalated into a claim. Have an email set up for any disputes and create a message template to re-direct them to your email team where they’ll be given priority treatment.

That will alleviate a lot of the Paypal messages that otherwise would be filed as a dispute if not handled this way. The following is a step by step guide to how you can set it up.

Go to your Paypal account and click on the settings tab —> my selling preferences —> customer service message section.

Set up the message for the customers. They’ll see this right before they make a dispute, so the trick is to redirect them to your priority email support instead of making a dispute.

2. Finding and building a relationship with good suppliers

Find a good supplier that provides you with a tracking number for every order within 48 hours. Find good suppliers that will ship fast for you, if there’s any problem with the shipment or product, they will take responsibility for that and either refund you or ship again to the customer.

For dropshipping, you’ll only need to find a supplier once you’re doing at least 20 orders a day, as most suppliers would not want to work with orders that are less.

How do you find good suppliers?

There are many fulfilment services out there like Enprolo, CJ dropshipping, Wiio, uDroppy, or HyperSKU, but most of these companies are huge, and would only give priority to drop shippers that are doing massive numbers. What you want is a supplier or agent who has a medium-sized team that is able to give you the support and service on a closer level that these companies cannot provide.
Basically, a supplier agent is a bridge between you and the manufacturer. You want to find a good agent that will choose the best pricing option for your product, and also have connections with different factories for the specific product that you’re selling.

The best way by far is to just message as many aliexpress suppliers for your product or niche and find the best one from there. DM these suppliers directly (you can also use Wechat as most of them are really active on it) and choose the one that is able to give you the best price, fastest shipping and also have a track record of good reviews on their aliexpress page.

For every supplier, you’ll need to test the products yourself, test how long it gets to your country, and also see if your supplier is responsive when there’s a problem. If your supplier is terrible at any of the 3 points, then find another one.
Finding a good supplier is a long process but it’s much needed when you want to scale your business. A lot of suppliers on aliexpress or fulfillment agents will say they have the products you need in stock, but sometimes you cannot believe them as they just want to make a sale. So be absolutely wary and cut out ties with any supplier if they do not fulfill those 3 points.

As you eventually find a good supplier, fulfillment wouldn’t be a headache anymore as he’ll be your long term “go-to guy” for sourcing any type of products you need.

How it works:

  1. Export orders from shopify
  2. Send CSV files to your supplier/ hide your own pricing
  3. Supplier will look at how many units are being shipped out per country and give you a quote
  4. Accept if it’s negotiable
  5. Pay through Paypal, Aliexpress (VIP Link) – do not pay via wire transfers unless you really trust them
  6. Supplier sends you CSV file with tracking numbers
  7. Upload CSV file to shopify with Massfulfil app or manually input the tracking numbers for all orders.

3. Adding of tracking information in Paypal & Stripe once it’s shipped out

With paypal, there’s an option to import a tracking number when a customer orders. This doesn’t happen automatically, and you’ll need to manually import the tracking numbers in. However, there’s an app that does this for you automatically: PayPal Tracking on Auto Pilot

Most of the time, if a customer files a dispute due to shipping times or delays, Paypal will close it in your favor if there’s a tracking number imported.

4. Leaving cash reserves in your payment processors

One other tip is to not go under Paypal’s investigation eye and leave at least 50 to 100 dollars on your Paypal account to cover any sudden expenses or refunds. As a business owner, there you may constantly transfer all of your funds to your bank account as you have cash flow problems where you need to use up your funds in Paypal to pay for your supplier or expenses.

However, your Paypal balance may go into the negative if there’s a sudden refund and If this happens too often, Paypal will limit your account. Just leaving enough money in your account so that you’ll never go negative is a must.

Go out there and make some money!

Founder Stories Weekly.

We interview successful entrepreneurs and share the stories behind their success. In each story, we ask how they got started, how they grew, how they overcame obstacles, and any tips they’ll like to share

Leave a Reply