A Shopify store selling yoga mats was doing just fine…steady sales, happy customers, clean processing history.

Then the owner added a monthly subscription box. Two weeks later? Account flagged as high-risk.

Most Shopify merchants think payment processing is a simple plug-and-play. You pick Shopify Payments, set up the products, and start selling. But your risk profile matters more than you think, and it can change overnight based on what you sell, how you sell it, or how fast you grow.

Let us see which categories and products might be problematic, what happens when Shopify decides you’re high-risk, and what you can do to avoid payment processing issues.

Industries and products Shopify finds “problematic”

You don’t need to sell anything shady to get flagged as a high-risk business. Plenty of everyday product categories will land you in hot water.

According to Shopify Payments’ Shop Merchant Guidelines, these categories are restricted or heavily scrutinized:

• CBD, cannabis products, and tobacco: Legal status varies by location. Even if you’re compliant, processors worry about chargebacks and regulatory headaches. Banks operate under federal rules, and cannabis is still federally illegal in the US.
• Adult content or services: Sky-high chargeback rates. Customers dispute charges to hide purchases or claim fraud. Plus, age verification requirements add compliance complexity.
• Supplements and nutraceuticals: This catches people off guard. Selling protein powder or vitamins? You’re in a category with high return rates and a history of aggressive marketing that’s triggered regulatory crackdowns. Processors see supplements and immediately think chargebacks.
• Firearms and weapons: Heavily regulated, massive liability concerns. Even accessories like holsters can get flagged by association.
• Gaming, gambling, and fantasy sports: Legal status changes by jurisdiction. High fraud rates (stolen cards funding accounts) and customers reporting unauthorized transactions after losing money.
• Subscription services: Monthly boxes, meal kits, memberships, auto-refills; all high-risk. Customers forget what they signed up for and dispute recurring charges. Even with clear cancellation policies, you’ll see “I didn’t authorize this” disputes.
• E-cigarettes and vaping: Regulatory uncertainty, health concerns, age verification risks. State laws vary wildly, making compliance complicated.
• Counterfeit or IP-infringing products: This one is a no-brainer. Customers dispute charges when they realize goods aren’t authentic. Brand owners pursue legal action.
• Travel, ticketing, and events: Long gaps between purchase and fulfillment. Events get canceled, plans change, and customers dispute months later. High ticket prices mean bigger chargeback hits.

You can launch a store and, without realizing it, become high-risk. Selling skincare? Add a subscription option, and you’re now high-risk. Selling fitness apparel? Start carrying supplements, and you’ve changed categories. Add international shipping? Higher risk profile. 

Even growing too fast triggers alarms. Jump from $10K/month to $50K/month, and fraud systems assume something’s wrong, even if you just went viral on TikTok.

The good and bad sides of Shopify Payments

Shopify Payments is the built-in payment processor that comes with every Shopify plan. It’s convenient; no third-party gateway needed, competitive rates, and everything runs through one system. For most merchants, it’s the obvious choice…until it’s not.

Shopify Payments uses automated risk algorithms to protect against fraud and chargebacks. The problem is, those algorithms can’t always tell the difference between actual fraud and a legitimate business that just happens to fit a risky profile.

Your store could be completely legit, but if Shopify’s system spots something it doesn’t like (sudden sales spikes, certain product keywords, a few customer disputes), it can freeze your funds, slap reserves on your account, or shut down payments entirely. Often without much warning.

Getting flagged as high-risk doesn’t kick you off Shopify. You can still run your store. But you can’t use Shopify Payments anymore. You’ll need a third-party gateway built for high-risk merchants to keep processing transactions.

What do you need as a high-risk merchant selling on Shopify?

Once you know Shopify Payments won’t work for your business, here’s what you need to get set up.

Step 1: A high-risk merchant account

This is your dedicated payment processing account for your business. It lets you accept payments even when your products, chargeback rates, or business model don’t fit Shopify’s rules.

Why you need one:

• No surprise shutdowns or frozen funds
• Built for your industry: processors understand subscriptions, supplements, and high-ticket items
• Keeps your business online and processing legally

Most high-risk processors handle applications online. The exact documents needed to apply can vary by industry and the products you are selling. In general, you will be asked to provide:

• Business license or incorporation documents
• Valid ID
• Recent bank statements (usually last 3 months)
• Previous processing history (if you have it)
• Bank account verification

Be honest about what you’re selling and how you’re selling it to make the underwriting process smoother.

Once approved, your processor gives you credentials to connect everything to Shopify.

Step 2: Connect your payment gateway

Your merchant account needs a gateway to process transactions. Ideally, you will get both the merchant account and the Shopify-compatible payment gateway from the same merchant service provider.

In that case, the setup process should be straightforward:

1. Get your gateway credentials from your processor
2. Log in to Shopify Admin → Settings → Payments → Third-Party Providers
3. Select your gateway and paste in credentials
4. Run test transactions to confirm it works

Heads up: Third-party gateways mean Shopify charges extra: 2% on Basic, 1% on Standard, 0.6% on Advanced. Factor that into your costs.

That’s it. You’re set up to process payments without Shopify Payments hanging over your head.

How to pick the right merchant services provider

If you’re genuinely low-risk (physical goods, no subscriptions, domestic sales, low ticket prices), Shopify Payments works fine. Just keep your chargebacks under 0.5%, and you’re good.

For everyone else? Don’t wait for Shopify Payments to shut you down. Start with a high-risk specialist before problems hit.

Here’s what matters when you’re choosing a high-risk merchant services provider:

• Payment gateway integration: Find a provider that offers both a merchant account and a gateway that plugs directly into Shopify. One vendor, one setup, less hassle.
• Industry experience: Have they worked with supplement brands? Subscription services? High-ticket stores? You want someone who’s seen your category before and knows the common pitfalls.
• Transparent pricing: All fees in writing — monthly, transaction rates, potential reserves. 
• Chargeback tools: Alerts through Verifi or Ethoca, dispute support, and fraud filters. Your processor should work with you to help prevent chargebacks.
• Flexibility: No long-term lock-in contracts. Your business will change, so you shouldn’t be stuck paying termination fees to switch providers.
• Customer support: Processing issues need to be resolved quickly. Look for a dedicated account manager who is available via phone and email. 

Questions to ask before you sign: 

1. Have you worked with stores in my category? 
2. What happens if my volume spikes during a promotion? 
3. What are your reserve requirements? 
4. How fast do I get access to my funds?

Get clear answers before committing. If they dodge questions or give vague responses, that’s your sign to keep looking. Once you’ve found the right processor, setting up Shopify high-risk payment processing is pretty straightforward.

Don’t wait for payment holds and freezes

Most Shopify merchants don’t think about payment processing until their funds are frozen, and Shopify Payments just shut them down. By then, you’re in damage control mode instead of running your business.

If you’re selling supplements, subscriptions, high-ticket items, or anything else on the restricted list, don’t wait for problems to start. Get a high-risk merchant account now, connect a gateway that works with your business model, and find a processor who understands your industry. The right setup means no surprise shutdowns, no frozen funds, and no panicking when your store finally takes off. 

So here’s the question: are you going to wait for that scary freeze email, or are you going to get ahead of it?

Author: Roland G. Szasz is the CEO and Founder of SecureGlobalPay — a company providing high-risk merchant services. With over 25 years in the payment processing space, he leads a team of industry experts who help hard-to-place merchants get approved, set up their gateways, and process payments without fear of freezes or shutdowns.

Frequently Asked Questions

Why would a legal business be labeled as high-risk by Shopify?

Payment processors look at more than just the legality of your products. They track industries with high chargeback rates, like supplements or subscriptions, where customers often dispute charges months later. Even a perfectly legal store can be flagged if its growth is too fast or if it operates in a category with strict financial regulations.

Can I keep using Shopify if my payments account is frozen?

Yes, being flagged for high-risk payments does not mean your entire store is shut down. You can still use the Shopify platform to manage your website and orders, but you must switch to a third-party payment gateway. This allows you to continue taking credit card orders while using a processor better suited for your business model.

Is it a myth that only “shady” businesses need high-risk merchant accounts?

That is a common misconception that costs many honest business owners their sales. In reality, harmless products like protein powder, meal kits, or even high-end jewelry often require high-risk processing due to their price or return rates. Understanding this early helps you avoid the shock of a sudden account freeze during a busy sales week.

What are the hidden costs of switching to a third-party payment gateway?

While a specialized gateway protects your cash flow, Shopify charges an extra transaction fee for not using their internal system. These fees range from 0.5 percent to 2 percent depending on your specific subscription plan. You should factor these costs into your product pricing to ensure your profit margins stay healthy.

How does adding a subscription model change my store risk level?

Subscriptions are considered risky because they involve recurring billing that customers sometimes forget about. When a customer sees an unexpected charge on their bank statement, they may file a dispute rather than asking for a refund. High dispute rates signal to banks that your business is a liability, even if your yoga mats or coffee beans are top quality.

What documents will a high-risk processor ask for during the application?

You should prepare your business license, a valid government ID, and your most recent three months of bank statements. They will also look at your processing history to see how you have handled refunds and disputes in the past. Being honest and organized during this step makes the approval process much faster.

Why does a sudden spike in sales trigger a fraud alert?

Automated systems often view a massive jump in revenue as a sign of stolen credit card use or a “scam” store that will not fulfill orders. If you expect a lot of traffic from a viral post or a big sale, it is smart to alert your processor ahead of time. This proactive step helps prevent them from freezing your funds right when you need the cash most.

How can I lower my store’s risk profile to avoid being flagged?

Keep your chargeback rate below 0.5 percent by providing excellent customer service and clear shipping updates. You should also make your refund and cancellation policies very easy to find on your website. When customers feel they can get a refund easily, they are much less likely to call their bank to dispute the charge.

What happens to my money if Shopify Payments freezes my account?

If your account is flagged, Shopify may hold your existing funds in a reserve for several months to cover potential customer disputes. This is why it is vital to have a backup payment plan or a financial cushion. Once the risk period passes and no new disputes appear, the remaining funds are usually released to your bank account.

What should I do immediately if I receive a payment hold email?

Your first step is to stop all advertising spend to prevent more orders that you cannot process. Next, reach out to a high-risk merchant service provider to start an application for a dedicated gateway. Taking fast action ensures that your store stays offline for the shortest time possible while you transition to a more stable setup.