Stripe Is Holding 25% of Our Funds, Indefinitely
Your title is a little misleading IMO.  They are not holding your money indefinitely they have added a rolling reserve which means yes you have to wait 28 days for the remaining 25% to get paid from each transaction.<p>While I agree they need to protect themselves in reality 25% can amount to more then the margin on many products and so can put a company out of business if the company is struggling already.  That said, this is a normal practice in the financial services industry regardless of provider.  I have worked with 100&#x27;s of ecommerce clients over the years and whenever their chargebacks&#x2F;refunds started going up (for any reason), their credit card processors would always place a reserve on the transactions.  It usually ranged from 10%-50%.  Many times they could get it removed over time once their chargebacks&#x2F;refunds dropped again, but you have to fight to do that every month.<p>What you are not explaining is why your chargebacks and refunds are up, Stripe&#x27;s letter to you specifically mentions this, so they are trying to protect themselves. They also will have contractual obligations with card issuers&#x2F;gateways etc that require them to do this if your chargeback rate exceeds some value.   This isn&#x27;t just you, this will happen to anyone.<p>Related by slightly different: I worked with a client who started getting dropped every 8 months or so from different major credit card processors. Their had a product &amp; on-going service for senior citizens and their clients would forget they purchased the service (or their kids&#x2F;grandkids would find it on a statement and get upset) and so then it would be reported as fraud or processed as a chargeback etc.  Even though the company had  voice recordings and proof the client themselves initiated the transactions the processors would drop them over time because their refund&#x2F;chargeback rate would exceed 30% over time.  This company is well known, not a scam and does a few million dollars every quarter in sales.  So the way we helped solve it for them was to break their transactions across many providers and also move them into doing more ACH&#x2F;bank transfers instead of credit cards.  This is a common method to solve these issues.