Account suspension FAQ
The short of it:
We've added this section to make everything as clear and concise as possible, because there are a lot of scary stories floating around about account suspensions:
Before your first payout, your account is reviewed. If you have made clearly fraudulent sales in that review period, or your account is violating our ToS, or it's abundantly clear to us that you are a bad actor and attempting to launder money, spam our servers, or pen-test the site, we will suspend your account. We may have to refund your sales at this point. You can appeal the suspension at this point, or choose to delete your account.
If your account is reviewed by us and we verify it, you're good. You'll get your first payout within seven days of your review, and we won't bother you again. Like, probably ever.
The only reasons that you would be at threat of suspension as a reviewed creator is if:
A) You have an extremely high chargeback rate
B) You suddenly decide to refund every single one of your sales that you've ever made, and put us into debt
C) You suddenly decide to start violating our ToS and after being asked to stop, continue to do so
D) Stripe or PayPal (or our other banking partners) suddenly decide that you are in violation of their ToS and prohibit us from working with you
The long of it:
As a small company, Gumroad has to uphold the interests of our banking partners and the companies that process our payments. In other words, we have to play by their rules if we want to continue existing.
Sometimes, playing by their rules really sucks, and we have to kick people off of our platform.
For Gumroad creators, this means that in order to process payments on your behalf (and pay you for the sales you make on Gumroad), your account has to be in compliance with the policies that we are bound to. By creating a Gumroad account, you are therefore subject to our Terms of Service, where we all agree that Gumroad can suspend and refund your sales if and when necessary (Section 8).
We encourage you to read through these Terms before creating an account, because if your account is in violation of these policies, it will unfortunately have to be suspended. Your existing balance may be refunded, depending on the policy that we are enforcing or the chargeback threats that we see from your sales.
We understand that from a creator's standpoint, suspension may seem arbitrary, unfair, and cold. We do our best to bring humanity, empathy, and honesty to the relationships that we have with our creators, but sadly, in the world of online payments, there is no nice way to end a payment processing relationship.
This page offers explanations for why an account will be suspended, and will attempt to dispel any misinformation you may have encountered elsewhere online.
We unfortunately have to stay rather general on this page, because giving away specific policy details is, frankly, a terrible idea in an online world full of fairly clever scammers.
Reason 1: Terms of Service Violations
Gumroad's Terms of Service can be found here:
And our list of goods that cannot be sold through Gumroad is here:
If you are using Gumroad in a way that violates our TOS, or are selling a product that we are not authorized to sell (common offenders include PLR ebooks, pornography, services, credit repair products, tickets to events, health products, unlicensed software you didn't create, or unlicensed electronics), we have to suspend your account.
Because we also have issues with spammers on the site, we also will have to suspend your account if it appears that you are using Gumroad as a means of manipulating search engine results.
If your entire account and your sales are in violation of our Terms of Service, we can not allow you back on the platform. If only a single product is, however, you may be allowed back on. If you agree to sell different types of products, we can allow you back on. If you have previous purchases on the platform, we can resend them to you or allow you to download them again.
Depending on the situation and the policies you have violated, we may or may not be able to pay you out. We do our best in these cases to get you paid, but sometimes we truly aren't allowed to.
We will speak to you directly in these instances about what will happen with your existing sales.
Reason 2: High-Risk and Fraudulent Sales
Our banking partners and processors insist that we only process and support payments for "safe", legitimate accounts. Accordingly, every account on Gumroad is reviewed by our Risk team and processors before payouts can begin. We explain this process in further detail on the following pages:
Before your first payout, we review your sales. If your account is marked by high rates of suspicious payments, or evidence that your sales were made fraudulently and/or with compromised payment sources (i.e. stolen credit cards, hacked PayPal accounts), we have to suspend it, and we cannot pay you for these sales.
If there are legitimate sales in your balance, we will pay you out for those.
"Why me? I didn't do anything wrong. Why should I be punished for my customers' activities?"
This is a common and very understandable response to this kind of suspension. You might not be doing anything wrong - you may be selling an ebook about world peace, and donating all of your profits to blind orphans, but if your account is the source of high amounts of fraudulent payments, then the only thing we can do to enforce the policies of our partners is to cut off the fraud at its source, which in this case would be your products.
Think about it like this - it's not a great analogy, but this is how our banking partners view the situation:
Mrs. Gumroad manages a supermarket, and you are her new employee. You invite someone from outside the store to come in and buy from the section of the store that you've just recently organized. That person comes in, steals a bunch of stuff, smashes up the store, and runs away.
What can Mrs. Gumroad do in this situation besides fire you? Again, not a great analogy but it's how we have to operate.
Yes, it's not fair to you, but because we have to enforce the risk policies of our partners quickly and effectively, suspension is the only avenue we can take.
Depending on your situation, your account may be reviewed again. We invite you to ask us to re-review your account because we do make mistakes. If we find that our review was flawed we will allow your account back onto Gumroad. If not, we will refund your sales and ask you to find a different platform for your sales.
Reason 3: High Chargeback Amounts
To learn how Gumroad deals with chargebacks, you can read this rather lengthy article. It offers tips on how to avoid chargebacks and how to help us in the event that your customer issues one.
In short though, if your account racks up a high number of chargebacks, your account is categorized as high-risk, and we are not allowed to process your sales or payouts.
Let's say you have $1,000 in sales and you incur $100 in chargebacks. You now have a 10% chargeback-to-sales volume rate, meaning 10% of all of your sales have resulted in chargebacks. Moreover, as per our ToS, Gumroad swallows the resulting penalties that are attached to chargebacks. Theoretically, if we were to continue processing your sales, we would therefore continue to accrue fees and chargebacks on your behalf.
From the viewpoint of our partners, this is unsustainable and we are forced to suspend your sales.
"Why me? I didn't do anything wrong. Why should I be punished for my customers' activities?"
Again, a totally understandable and completely valid point. But, to restate - we have to enforce the risk policies of our partners quickly and effectively. The chargebacks are originating from your account, and suspension is the only way to solve the issue, from our partners' perspective.
If your account has been suspended for a high chargeback rate, we will be forced to hold onto your balance for 30-45 days to accommodate for further chargebacks. After this period of time, we will pay you out the remaining balance in your account, if given clearance by our banking partners.
Reason 4: Your account was rejected by our partners
If you have entered payout information into your Gumroad Payouts page, that means you have created an account with our partners, Stripe and/or PayPal. In addition to our reviews of your sales, they also review your account based on the information they have at their disposal.
If, for example, you have been suspended from PayPal in the past and created a new account with us, they may not allow us to pay you. Or if your bank account has been connected to fraud in the past that Stripe has had to deal with, they may not let us pay you.
If this is the case, we will forward your case on to the support staff of either PayPal or Stripe. We may also put you in an email thread with them to answer any questions that they have. Depending on their decision, you may or may not be paid out in future. It is out of our hands at this point. If Stripe does not allow us to pay you, then unfortunately we have no way to send you money. The easiest solution in this example would be to refund your sales and contact your customers to pay you via an alternate route.
Frequently Asked Questions
Q1. Why doesn't Gumroad inform users that their account is suspended?
A1: A vast majority of the accounts we suspend (around 50,000/month) are created by actual scammers or spammers. To inform them via e-mail that their attempts to defraud us were unsuccessful would effectively amount to us offering them a Mulligan.
We have found it is more effective for us to allow users to email us for more information after their accounts have been suspended. We understand that suspension often comes as a nasty surprise, and we apologize for the seeming rudeness.
Q2: I have read online that Gumroad keeps my customers' money after my account has been suspended.
A2: We're not entirely sure how this rumor got started, but rest assured, it's not true. If we were actually doing this, a few things would happen:
1. Customers would issue chargebacks at a rate that would quickly bankrupt us
2. Creators would sue us so much that we'd be bankrupted
3. Our payment processors would get wind of it, and boot us from their platforms
4. We'd get a visit from the FBI for extortion
Not a single one of these things has happened since we opened our doors in 2011, so hopefully it should be evident that this is not how we do business.
If your account has been suspended and sales have been refunded, we are more than happy to provide proof of those refunds to your customers.
Q3: Can I protest my suspension?
A3: Absolutely. To be clear, we don't enjoy suspending accounts, and sometimes our review process can be flawed. Just email firstname.lastname@example.org and we will inform you as to why your account was suspended. We will then ask for pertinent information that may help us get your account back and running.
Q4: Why doesn't Gumroad provide me with specific reasons why my account was suspended?
A4: The Internet is a pretty awful place when it comes to fraud and risk management, and unfortunately the more specific information we give out about our risk and fraud detection, the more information there is that's able to leak to fraudsters trying to make money off of us.