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Anybody else get this email from Stripe?
I just got the following email from Stripe. Did anybody else get a similar email? And if so, how did you reply to it?
"Thanks for signing up with Stripe!
We've noticed that your website seems to sell some fairly popular brands. Before we can transfer funds to your bank account, we do need to request confirmation that your store is authorized to resell these brands.
I'm really sorry about the trouble—unfortunately, a few bad actors can make for a few extra hoops for legitimate businesses to climb through. If you could send us documentation confirming your authorized reseller status, I'd be happy to start transfers back up!
I've also enabled a prompt in your Stripe dashboard[1] that will show you this message—once we're all set with this verification, I’ll go ahead and take this notice down."
"Thanks for signing up with Stripe!
We've noticed that your website seems to sell some fairly popular brands. Before we can transfer funds to your bank account, we do need to request confirmation that your store is authorized to resell these brands.
I'm really sorry about the trouble—unfortunately, a few bad actors can make for a few extra hoops for legitimate businesses to climb through. If you could send us documentation confirming your authorized reseller status, I'd be happy to start transfers back up!
I've also enabled a prompt in your Stripe dashboard[1] that will show you this message—once we're all set with this verification, I’ll go ahead and take this notice down."
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*Tesco in the UK were prevented by the ECJ from selling Levi jeans they'd bought through non-official channels in the US. After the ruling was made, the UK promised to seek agreement from EU members to change EU law so that similar sales were not restricted, but France signalled their intent to veto any such agreement. Not sure what happened there.
"Thanks for signing up to Stripe."
Have you signed up recently?
"We've noticed that your website seems to sell some fairly popular brands."
No mention of which brands. Do you have your own website?
"I'm really sorry about the trouble—unfortunately, a few bad actors can make for a few extra hoops for legitimate businesses to climb through. If you could send us documentation confirming your authorized reseller status, I'd be happy to start transfers back up!"
Totally unprofessional wording.
I am very suspicious.
"No mention of which brands. Do you have your own website?" - No. When signing up with Stripe they asked for an url for my shop. I entered the link to my Brickowl store.
"Thank you for following up and we really appreciate all of your efforts so far.
While I completely acknowledge that you're legally allowed to sell these products, I'm afraid our financial partners are unwilling to process payments for anyone selling name brand merchandise unless they're an authorized reseller. What this means is that although your business is sound, our financial partners have taken away Stripe's flexibility to work with you.
I want to be clear here, we aren't accusing you of any wrong doing, nor are we speculating at the legitimacy of your products. This requirement is meant to safeguard the manufacturer, as well as Stripe, from any unnecessary financial risk or potential copyright infringement that comes with the sale of easily recognizable (and frequently faked) brands. This is a stipulation handed down by the credit card companies as well as our financial partners, and something we aren't able to work around.
For a bit of background, our financial partners typically require that the seller of any branded product have written permission from the manufacturer itself to resell their merchandise. Would you be able to send over a copy of your documentation confirming your status as an authorized reseller of your products, along with a brief description of where you get your inventory and how you confirm the authenticity of your products?
I hope this helps in clearing things up and if you ever have any questions, I'm here to help."
I am wondering now if I should remove Stripe as a payment method, I don't want them to withhold funds and have to pursue them for payment.
> "Have you signed up recently?" - I signed up a few weeks ago
May just be some muppet Stripe intern that needs better training / supervision.
https://www.axios.com/stripe-reportedly-lands-deal-with-amazon-2467975292.html
In general, this does not bode well. "our financial partners" can only either be equity funding or Visa/MasterCard. It's likely Visa/MasterCard or maybe Amazon based on their recent deal - which means that either LEGO is trying to pull out the big guns or some clueless folks at Stripe have over-extended their interpretation of their policies OR Amazon is being Amazon (which means it's bad for every retailer other than Amazon).
However, the email is really odd. I'm NOT a legal expert, so don't take anything I say as legal advice, but I do have a lot of experience with copyrights & trademarks. Copyright protects someone's real intellectual property from being sold, but does not limit the resale of physical published copies of the work. For example, if you purchased 100 Stephen King paperback books and resold them then that is not copyright infringement. If, however, you tricked a publisher into paying you for Stephen King as if you were the writer or owner of the copyright then that is infringement. If you made digital copies of the book and sold that (or gave it away), that too is infringement. This can't possibly be a context of copyright concern unless you are making digital copies of something for resale OR using images owned by LEGO to sell something. Technically, images of box covers used in promotion could be considered infringement unless you took your own photo of the box. Plus, if you pointed to this site as your site of commerce there is clearly indicated messaging on every page that this is not an official LEGO site: "LEGO, the LEGO logo are trademarks of The LEGO Group of companies which is not associated with Brick Owl".
"For a bit of background, our financial partners typically require..." Typically require? This sounds like Amazon is strong-arming them. It smells like Amazon. If it were me I would challenge them to specify which policy, in writing, enforces this requirement. I would also contact the European Commission regarding resale rights on legally purchased branded products. Chances are Stripe may be enforcing something illegal with pressure from an outside partner like Amazon, which would be a competitive trade infringement if done in the US but they are testing the waters with the EU. I would guess most people would roll over. I wouldn't.
I've considered using Stripe in the past for various transaction solutions but now I may not.
Everything in Stripe’s correspondence would be appropriate if he was selling SETS.
Cutting through all the corporate BS, basically all they want is:
“confirming your status as an authorized reseller of your products, along with a brief description of where you get your inventory and how you confirm the authenticity of your products”
A legitimate reseller (of SETS) will be able to produce their LEGO account info or provide some invoices from some other authorised channel distributor or major retailer.
The Stripe guy probably just glanced at Paul's store, saw LEGO, recognised the brand as one of those on ‘the list’ and fired off the standard email. Responses thereafter are still based on the initial flawed assumption that Paul is selling SETS.
Clearly, there are some new procedures in place since the tie up with Amazon – hence the interest in where newly registered LEGO (set) retailers are getting their inventory?
If Paul makes it clear that he’s selling PARTS, that might well be enough to clear up the initial misunderstanding.
Obviously in this case the word Lego set them off and @paulvdb will now have to convince them he doesn't need authentication from Lego themselves. It's a tricky situation...
As for the legality: They're a private company. They can do whatever they want as long as you agreed to their terms beforehand. And this will have been in the terms somewhere when creating an account. There's nothing to be done legally. The most a judge could do is force Stripe to release any funds you might still have in your account. A judge can't force anyone to take someone as a customer (as long as it's not based on race, religion, etc. of course).
It seems that Stripe is essentially trying to ensure that the goods being sold are legit. Perhaps a Lego shop receipt might be enough, perhaps not. The one thing I wouldn't do is tell them that you're selling parts, because this involves 'repackaging' of a product, which carries with it a lot of onerous obligations, the main one being CE certification. In simple terms, EU law states that if you repackage a product, with or without the original manufacturer's permission, you - in law - are at that point considered to be the manufacturer. This means you become the one legally responsible for ensuring that the goods comply with all EU standards, and for certifying that they do so by ensuring their packaging is clearly marked with the CE logo. How many sellers actually do this? As far as I can tell there are only two ways of legitimately ensuring the goods comply:- (1) ask Lego to provide you with, and allow you to share, the compliance documents resulting from all the necessary product testing, or (2) do that testing again. It isn't, sadly, as simple as sticking a CE sticker on something and away you go.
Parting out Lego sets in order to sell the parts individually isn't doing anyone a great deal of harm, but most if not all sellers, including me, are skirting on very thin ice when it comes to complying with necessary laws.
Telling Stripe that you repackage Lego sets in order to sell parts might just give them another reason to say "sorry, you can't do that."
"While we hate to give you anything less than a great experience, it does seem that your business is in violation of our Terms of Service, section A.7.b ("Prohibited Businesses and Activities"). Specifically, we are unable to accept payments for brand name goods resold without permission as mentioned here: https://stripe.com/prohibited-businesses.
These regulations come from our banking partners, so we sadly have no flexibility with them. That said, we understand that there may be some work involved with moving your business away from Stripe, and we’re happy to help out with this process by giving you 5 days to switch to a new provider. After that, you won’t be able to accept additional charges on your account, but we will continue making transfers to your bank account until you receive all of your funds"
I don't need those 5 days because I already accept Paypal and only recently added Stripe as an additional payment method. And I had not asked for that. The one thing I had asked about was my remaining balance and the important thing for me is that they are going to pay that to my bank account.
I know some posters here questioned the legality of Stripe's policy. It's not worth the effort to look into that for a payment method that was only used by a small number of buyers.
I too accept Stripe payments and was never contacted by them about violating the terms of service.
It's weird that it has only happened to a few sellers. Surely they're able to pinpoint every single one. Is it a matter of volume, and you got singled out because you crossed some kind of threshold?
Well at least they didn't hold any of your funds, and it's simply a matter of switching Stripe integration off, and sticking to PayPal, but it doesn't bode well that stuff like this can happen :/
I found a specific text which relates to that:
“the right of a producer to control distribution of its trademarked products does not extend beyond the first sale of the product”, and “resale by the first purchaser of the original article under the producer’s trademark is neither infringement nor unfair competition”.
These limits are set in the interest of free movement of goods and are based on the assumption that trademark rights cannot serve to fraction the market by allowing control beyond the first “sale” of the marked products.
Bottomline: Once second sale (BO/BL seller buys from an official distributor in a legit way) has been done, there is no longer any restriction or 'control' by the manufacturor possible for reselling the goods (so why would STRIPE make a problem out of it).
Conditional: the 'third party' is not allowed to use the manufacturors logo or brandname to resell the goods, which we don't: neither the site uses the LEGO logo (and explicitly states: LEGO, the LEGO logo are trademarks of The LEGO Group of companies which is not associated with Brick Owl) and neither should any seller (the site should not allow any seller to use the LEGO logo (or something that looks like it) neither the word lego in a shopname). Technicly you can't even pack a set in those yellow bags LEGO offers, neither should a reseller use a shippingbox which mention the LEGO logo if the seller has no distribution contract with LEGO.
Hoddie has a point about the 'repacking' of items, allthough guidelines about that are pretty vague and are too 'general' to compare it to parting out LEGO sets and selling it's individual bricks/pieces, which is a pretty unique 'format' and uncomparable to any other product.
> Brands trademark protection only applies to 'first sale'.
That is entirely consistent with what Lawrence suggested upthread:
"I believe the important thing is to evidence the source of your stock, so for example if you have purchased sets from a well known retailer, a receipt evidencing that should be beneficial"
Providing supplier invoices from LEGO, or any another well known retailer, demonstrates that it's not a 'first sale' product.
CE labeling: Complex thing, the main guideline on this is that it's the manufacturer (or it's appointed distributor/representative) or the importer who imports the goods in the EU who needs to guarantee the quality and safety of the toys in compliance with EU regulations (probably similar kind of guidelines in other regions like NA). The CE label needs to be on either the goods or depending on content on the outer box and/or on inside documentation, either printed or seperatly labeled.
The guideline is also specific when it comes down to toys containing small parts: It can be on a small label because obviously one won't be able to put the CE logo on each small part.
Based on the 'manufacturer' or 'importer' wording, whatever already has been bought in the EU and distributed trough regular channels, the CE quality is guaranteed, and when we 'export' it is no longer an issue, as it is the 'importer' of the country of destination who needs to certify quality and safety in regulation with the guidelines of his country (or region).
Next thing:
The CE label is valid for the whole content, IF the content is unpacked to be sold seperatly in a display, the CE label should be placed on the 'desk display', so we're talking here about public (physical) stores selling seperate (or loose) items (or parts) of packages with a larger content (like the CMF baggies). However we are not public stores, we are selling on a private website with no physical display of the items we sell.
Technicly as the the whole content is CE approved (so including the loose parts), why would the content lose it's CE approval because it's unpacked and sold seperatly? After all: people (children) do open LEGO sets to build with the loose parts (and potentially throw out all packaging materials).
The only thing that matters then is the way it is re-packed. If the repacking is done with CE approved materials (ziplocks and such) then there should be no issue at all (unless you start buying ziplocks in China for example, in that case the seller is 'importer' of those baggies and needs to make sure the ziplocks are in compliance with the EU CE requirements). So repacking after selling loose parts should not arrise any issue if one uses CE certified baggies/packing materials.
Whether the content should be specifically marked with a CE label remains discussible however.
Particulary as the whole EU guideline in regards to the CE labeling for toys is with the specific mentioning it must be guaranteed 'safe for children', but we do not sell to children, as the minimum age requirement to buy here is 18 (which is different for retail, as children can walk in themselves and buy something 'off the shelves'), so it is discussable whether any seller here would be in comptent with EU regulations.
It might be wise however to put the 'forbidden for children under 3' logo somewhere on the (inner)package(s) to avoid legal problems (already an obligation in Germany) in regards to choking hazard, should our buyers (parents) give the items to their children.
I'll dig some more later on...
When you repackage CE-marked goods - as we do - we, in law, become the manufacturer and are thus responsible for stating that the newly repackaged product meets the relevant EU standards. It's not possible to 'borrow' the CE marking of another manufacturer, even though, as in the case of parts taken from a sealed CE-marked box, we know - or rather assume - they do meet the relevant standards because Lego have said they do.
I used to work in a tumble dryer factory and helped devise a labelling system to ensure the products carried all the safety marks (CE and BEAB being the European ones, but we dealt with compliance systems from all over the world). This involved working with the two guys (one did electric dryers, the other gas dryers) who oversaw the testing that allowed us to certify compliance, and without their signature the factory would not have been able to release goods to shipping and production would eventually grind to a halt (in fact, it did on a couple of occasions). There was always talk that they were the best-paid guys in the factory even though the testing wasn't all that involved (melt tests, overload tests, chemical tests and so on) - but the process was extremely onerous in terms of time spent and record-keeping. This was despite the fact that all our dryers were essentially the same, even though visually they looked different depending on the brand (Bosch, Siemens, Whirlpool, Zanussi, Candy, Philips, etc.).
My knowledge is many years out-of-date and I never dealt with repackaging back then, but did have a read the other day so it was fresh in my mind when I posted the above. I may have got it wrong. I wonder how Certified Lego Professionals deal with this issue. That would give a clue as to whether or not it is necessary to CE-mark repackaged CE-marked product.