What Is a Merchant of Record?

‍A merchant of record (MoR) is the legal seller responsible for a customer transaction. It takes the payment and performs the duties in its agreement. Its name appears on the customer's payment statement, even when another business markets or ships the product.

Who is the merchant of record for your store?

Your business is usually the merchant of record when a payment processor sends store funds to your account. Your business owns the sale. The processor moves money between the customer's bank and your store's merchant account.

Disputes from a standard Shopify checkout reach your merchant account and require a refund or evidence.

An MoR plan changes who is responsible only for orders named in its terms. Those terms should name the legal seller.

What the merchant of record is liable for

The merchant of record handles payment processing, refunds, chargebacks, fraud controls, and transaction-tax work for each covered sale. Stripe lists these common duties:

• Processing payments.
• Issuing refunds.
• Handling chargebacks.
• Controlling fraud.
• Handling sales tax, value-added tax, or goods-and-services tax for the sale.

The contract names each party's role and the orders it covers. It should also state when the provider pays your store.

A payment facilitator puts many sellers under one merchant account so they can take payments. The seller still owns each sale. An MoR takes the risks named in its contract.

When your store remains the MoR, repeated disputes can raise its dispute rate. They may also lead to a high-risk merchant account designation.

For a Stripe store, set the statement descriptor to a store name customers know. Keep the receipt, tracking details, proof of delivery, and customer messages when avoiding chargebacks on Stripe. Submit those records with your dispute response, though they can't prevent every claim.

Is Shopify the merchant of record for your store?

A standard Shopify store remains its own merchant of record, while Global-e takes that role for eligible Shopify Managed Markets orders. Shopify provides the commerce platform and payment tools in the standard setup.

Shopify names Global-e as the seller for covered orders. The work covers:

• Duties.
• Tax remittance.
• Commercial invoices.
• Carrier arrangements.

A store must qualify by location and meet these setup terms:

• Be in the continental US or an invited Canadian or UK store.
• Use Shopify Payments.
• Have an online store.
• Subscribe to the Basic plan or higher.

Managed Markets covers only orders run through the program, while the store remains responsible for other sales. Open the order in Shopify and look for Managed Markets plus its shipping label.

FAQ

What happens if I stay my own merchant of record?

You keep control of the sale and remain responsible for every duty assigned to your business. That can suit a store with simple cross-border needs, but it also leaves the work and risk with you.

Does Shopify Payments make Shopify my merchant of record?

When Shopify Payments takes a standard payment, your store is still the legal seller. A separate MoR program can cover an eligible order.

Why would a dropshipping business use an MoR provider?

A dropshipping store may hire an MoR when the service costs less than handling cross-border payment and tax work. The tradeoff is less control, plus fees, payout terms, and coverage limits.