Looking for Guidance on Winding Down My E-commerce Business – Stripe/Klarna Disputes, PayPal Funds & Business Closure

[storesydney]

Hi everyone,

I'm looking for some advice or guidance on how to close down my UK-based e-commerce business in the most efficient and least painful way possible.

This company sold physical goods exclusively to non-UK customers via a Shopify store, with Klarna through Stripe as one of the main payment methods.

Unfortunately, Stripe has become incredibly difficult to deal with. We've had multiple customer disputes where Stripe automatically sided with the customer, refunded them from our account (sometimes even initiating direct debits from our business bank account), without giving us a fair chance to present evidence. In many cases, even when we provided tracking information and proof of delivery, the disputes were still marked as lost.

It feels like the system is completely anti-seller — customers are able to buy on credit, receive the product, then initiate a refund claim, keep the item, and still get their money back. This has happened enough times that Stripe now claims we owe them around €20,000 in chargebacks and fees. In reality, it feels like they should owe us money based on products not returned and evidence ignored.

At this point, I’m emotionally and financially exhausted. I’ve used the last of the company's working capital to repay a lender, and I have no remaining funds to repay Stripe. On top of that, we’re still waiting on funds currently held in PayPal, which are expected to be released soon — this could help slightly, but it’s not enough to cover Stripe’s claim.

Given this situation, I’m not sure how to proceed:

• Should I attempt to formally dispute this €20k liability with Stripe? (Seems like an uphill battle.)
• Should I look into liquidation or administration?
• Would it be possible to just apply for a company strike-off, given that the only significant liability is disputed and there are no funds?
• Would it make any sense to try to sell the business, even in this condition?

If anyone has gone through a similar situation — especially dealing with Stripe, Klarna, or PayPal — or has experience with company closures, I’d be extremely grateful for any insight.

Thanks in advance

 

[ChrisCallaghan]

Hi @storesydney , and welcome to UKBF.

Should I attempt to formally dispute this €20k liability with Stripe? (Seems like an uphill battle.)

Only you can decide this. I would agree that continuing to dispute with Stripe may be a lot of effort for questionable results. As you've experienced, their default position seems to be to back customers rather than vendors.

Should I look into liquidation or administration?

I think it is worth exploring so that you have a full understanding of this process. From you brief summary, I expect an Administration won't be needed, and that you would be looking to explore a Creditors Voluntary Liquidation. To explore this with a licensed insolvency practice is typically free of charge, confidential and without obligation - so in short it will cost you nothing to seek professional advice on this option. Myself (or any of the insolvency regulars here on UKBF) would be happy to advise you on this option. If liquidation was seen to be you're preferred route, then the funds that are due from Paypal could go towards the costs associated with a liquidation.

Would it be possible to just apply for a company strike-off, given that the only significant liability is disputed and there are no funds?

It certainly is possible, and no one could stop from applying to strike off. You're two duties should you attempt this are:

1. Being ceased to trade for a minimum of 3 months before making such an application (a DS01)
2. Notifying all creditors and members within 7 days of the application.

The issue with making a strike off application in your circumstances, is that creditors have a right to object and block the application. Financial institutions, e.g. Stripe, typically exercise this right.

Should you consider this option, the below links (a template letter and guidance) will be helpful:

• https://businessdebtline.org/sample-letters/considering-strike/
• https://www.gov.uk/strike-off-your-company-from-companies-register

As with the liquidation route, an insolvency practice can give further guidance on this whilst exploring all your options.

Would it make any sense to try to sell the business, even in this condition?

Tricky one to answer - simple question is would you buy a business that is facing the difficulties you've described? Is the business worth anything if you're no longer part of it?

Hope the above helps you consider your options. Happy to have a chat (phone call or Zoom) if you'd like to go through any of the above in more detail.

 

[UK Contractor Accountant]

This company sold physical goods exclusively to non-UK customers via a Shopify store, with Klarna through Stripe as one of the main payment methods.

Are still holding stock? if so strike off route is not really an option until the stock has been dealt with..

 

[Lisa Thomas]

Hi everyone,

I'm looking for some advice or guidance on how to close down my UK-based e-commerce business in the most efficient and least painful way possible.

This company sold physical goods exclusively to non-UK customers via a Shopify store, with Klarna through Stripe as one of the main payment methods.

Unfortunately, Stripe has become incredibly difficult to deal with. We've had multiple customer disputes where Stripe automatically sided with the customer, refunded them from our account (sometimes even initiating direct debits from our business bank account), without giving us a fair chance to present evidence. In many cases, even when we provided tracking information and proof of delivery, the disputes were still marked as lost.

It feels like the system is completely anti-seller — customers are able to buy on credit, receive the product, then initiate a refund claim, keep the item, and still get their money back. This has happened enough times that Stripe now claims we owe them around €20,000 in chargebacks and fees. In reality, it feels like they should owe us money based on products not returned and evidence ignored.

At this point, I’m emotionally and financially exhausted. I’ve used the last of the company's working capital to repay a lender, and I have no remaining funds to repay Stripe. On top of that, we’re still waiting on funds currently held in PayPal, which are expected to be released soon — this could help slightly, but it’s not enough to cover Stripe’s claim.

Given this situation, I’m not sure how to proceed:

• Should I attempt to formally dispute this €20k liability with Stripe? (Seems like an uphill battle.)
• Should I look into liquidation or administration?
• Would it be possible to just apply for a company strike-off, given that the only significant liability is disputed and there are no funds?
• Would it make any sense to try to sell the business, even in this condition?

If anyone has gone through a similar situation — especially dealing with Stripe, Klarna, or PayPal — or has experience with company closures, I’d be extremely grateful for any insight.

Thanks in advance

Sorry to hear about your issues.

I can't advise on whether an insolvency procedure is right for your company, (or which one) without much more information about the assets/employees/liabilities etc..

Here is my video as a starting point where you might be able to narrow down the options yourself:

- YouTube

Enjoy the videos and music that you love, upload original content and share it all with friends, family and the world on YouTube.

youtu.be

Happy to have a free, confidential, non obligational chat about it. Feel free to dm me.

 

[Gyumri]

I'm looking for some advice or guidance on how to close down my UK-based e-commerce business in the most efficient and least painful way possible.

Stripe now claims we owe them around €20,000 in chargebacks and fees.

How can Stripe be owed any money if they have taken back the chargebacks from your account?

If you have very little stock left then it is probably not worth much to worry about but obviously if it can be sold so much the better.

It sounds like it would be better to give up on this particular business and find something less stressful to do in life and which is more productive than dealing with Stripe.

So the company can just lie dormant for a while and if Stripe wants to wind it up then let them do so at their own and expense.

In the meantime you can get on and start another or similar business but use a different card processor.

 

[Elliot Green]

Liquidation *might* be an option. My details are below if you want to have a chat.