Payments, tax & subscriptions for software companies
Lemon Squeezy is a merchant of record (MoR) platform for selling digital products and SaaS subscriptions. Founded by Gilbert Pellegrom, JR Farr, Jason Schuller, and Orman Clark. Acquired by Stripe in July 2024. Known for 5% + $0.50 fees (half of Gumroad) and handling global tax compliance. Mixed reviews with 3.5/5 Trustpilot due to support and account issues.
Patterns extracted from real user feedback — not raw reviews.
Users report 'almost no customer support' with weeks of silence despite follow-up emails. AI chat support provides limited help, with human responses taking a week or more 'if lucky.' Critical issues during onboarding go unresolved, leaving sellers stuck.
Users report stores being 'shut down due to undefined risk signals' with 'no proof or details.' Some had payouts frozen (one case over $3,500), customers refunded despite products delivered with zero chargebacks. The suspension process is opaque and difficult to appeal.
Users report funds held without distribution, with confirmation through Stripe that issues originate from Lemon Squeezy's failure to push funds. Some merchants have money frozen with payment information rejected and 2+ week verification processes blocking access.
Users report cancelled subscriptions continuing to charge their cards while customer support doesn't respond. Billing issues with no resolution path create frustration for both merchants and their customers.
Users report payments marked as successful with no confirmation to customers, no data appearing in dashboard. Support on chat, email, and Twitter doesn't respond. Silent failures create confusion and lost sales.
The advertised 5% + $0.50 fee has an additional +1.5% for international transactions. For global SaaS products with customers worldwide, this adds significant hidden cost. The base rate is competitive, but international sellers pay more than expected.
Initial account verification can take 2+ weeks with funds frozen during the process. Some users report payment information being rejected and blocked from rewriting. The onboarding friction can delay launches significantly.
For SaaS businesses needing advanced subscription management, Lemon Squeezy's features are more basic than Paddle's. Lacks flexible pricing plans, customer journey customization, and sophisticated churn reduction tools that mature SaaS companies need.
Users report coupon codes not working on first attempt - screen refreshes as if nothing happened, but code works on second try. These small technical issues create friction in the checkout experience.
The July 2024 Stripe acquisition creates uncertainty about Lemon Squeezy's future direction. Some SaaS teams are looking for alternatives due to concerns about whether the brand will remain separate or face changes.
Paddle offers rich SaaS analytics via embedded ProfitWell Metrics with benchmarking against 30,000+ companies. Lemon Squeezy's analytics are more basic, lacking the depth that subscription businesses need for optimization.
Half the fees of Gumroad
At 5% + $0.50 per transaction, Lemon Squeezy charges half what Gumroad takes (10% + $0.50). For sellers doing meaningful volume, this fee difference adds up to significant savings. Migration from Gumroad is often motivated by fee savings alone.
Merchant of record handles global tax compliance
As a merchant of record, Lemon Squeezy handles global tax compliance, VAT, and remittance automatically. You don't need to worry about international tax obligations. This simplifies selling globally significantly.
Modern, clean interface
The dashboard and checkout experience are modern and well-designed. Users praise the sleek, intuitive interface. For brand-conscious sellers, Lemon Squeezy looks more professional than older alternatives.
No monthly subscription fees
Pay only when you sell - no monthly commitment. The percentage-based model means zero risk to try. Free to start with no trial period or contract requirements.
Free migration from Gumroad
Lemon Squeezy offers free migration assistance from Gumroad with proprietary tools and team support. Many sellers report conversions tripled after switching. The migration path is well-supported.
Supports digital products, subscriptions, and SaaS
Versatile platform supports one-time digital product sales, memberships, subscriptions, and SaaS billing. All product types in one platform with appropriate billing logic for each.
Users: Unlimited
Storage: Unlimited
Limitations: 5% + $0.50 fee per sale, +1.5% international fee, Basic analytics vs Paddle, Support can be slow
Users: Unlimited
Storage: Unlimited
Limitations: Additional cost on top of transaction fees, Pricing scales with list size
Indie SaaS founders
Lemon Squeezy's subscription billing, license keys, and MoR services are designed for SaaS. Lower fees than Gumroad, tax compliance handled. Good for early-stage SaaS before you need Paddle's advanced features.
Digital product sellers migrating from Gumroad
Free migration assistance, half the fees, similar ease of use. Many report 3x conversion improvement after switching. The value proposition for Gumroad refugees is strong.
International sellers
Global tax compliance handled automatically. Supports more countries than Gumroad. The MoR model handles international complexity. Just note the +1.5% international transaction fee.
Sellers with complex compliance needs
While Lemon Squeezy handles tax compliance, Paddle offers PCI-DSS Level 1 compliance, tokenization, and more advanced security features. Evaluate your specific compliance requirements.
Risk-averse sellers worried about account issues
Account suspension reports are concerning. If your business depends on reliable access to funds, the risk of frozen payouts with slow support may be uncomfortable. Consider alternatives with better track records.
Creators wanting reliable support
Support is consistently criticized as slow or non-existent. If you anticipate needing help during onboarding or with issues, the support experience may frustrate you significantly.
Established SaaS needing advanced subscription tools
For mature SaaS companies needing advanced subscription management, churn reduction, and deep analytics, Paddle offers more sophisticated tools. Lemon Squeezy is better for simpler subscription needs.
Sellers needing immediate support
2+ week response times and AI chatbots won't help with urgent issues. For time-sensitive problems, the lack of responsive support is a dealbreaker.
Common buyer's remorse scenarios reported by users.
Merchants had stores shut down due to 'risk signals' with no proof or details. Payouts frozen, sometimes $3,500+. Customers refunded despite products delivered. No recourse through slow support channels.
New sellers faced issues during setup with no support response. Weeks of silence during the critical launch period. What should be a simple start became frustrating and delayed.
Sellers had funds held by Lemon Squeezy with no clear path to release. Some confirmed through Stripe that the issue was Lemon Squeezy's failure to push funds. Money earned but inaccessible.
Sellers with global customers realized the +1.5% international fee significantly increased their costs. What was advertised as 5% + $0.50 became 6.5% + $0.50 for most transactions. Math didn't work out as planned.
Growing SaaS companies needed advanced subscription management, churn analytics, or sophisticated pricing tools. Lemon Squeezy's features proved too basic. Had to migrate to Paddle mid-growth.
Customers reported being charged after cancellation. Support didn't respond to resolve the billing errors. Both merchant reputation and customer trust were damaged.
Scenarios where this product tends to fail users.
Your account is suspended for 'risk signals' with no details. Payouts are frozen - could be thousands of dollars. Support takes weeks to respond. Customers may be refunded despite product delivery. Business is paralyzed.
Payment processing breaks or customers can't check out, but support doesn't respond for a week or more. AI chatbot can't help with real problems. Revenue is lost while waiting.
Funds you've earned aren't reaching your bank account. Lemon Squeezy isn't pushing funds. Verification is stuck. Money is inaccessible with no clear timeline for resolution.
Customers are charged after cancelling subscriptions. They contact you frustrated. Support doesn't respond to fix the issue. Your reputation suffers from a problem you can't resolve.
Your global customer base means most transactions incur +1.5% international fees. What looked like competitive 5% pricing becomes 6.5%+. Margins are thinner than projected.
Your SaaS needs advanced churn reduction, sophisticated analytics, or complex pricing. Lemon Squeezy's tools are too basic. Must migrate to Paddle at a critical growth stage.
Post-acquisition changes affect the platform. Pricing, features, or integration may shift. The independent product you chose may evolve in unexpected directions.
Paddle
SaaS companies needing advanced features switch to Paddle for sophisticated subscription management. Gain: advanced analytics via ProfitWell, churn reduction tools, PCI-DSS Level 1 compliance, established track record. Trade-off: similar fees, more enterprise-focused.
Gumroad
Creators wanting simpler experience switch to Gumroad for familiarity. Gain: proven platform, Discover marketplace. Trade-off: double the fees (10% vs 5%), worse support, account suspension risks.
Payhip
Sellers wanting zero fees switch to Payhip Pro ($99/mo). Gain: 0% transaction fees on Pro, built-in affiliates, course hosting. Trade-off: monthly commitment, not a MoR.
Stripe Direct
Developers comfortable handling tax compliance switch to Stripe directly. Gain: lower fees (~2.9%), more control, established infrastructure. Trade-off: must handle tax compliance yourself, more development work.
Polar
Developer-focused SaaS switches to Polar for open-source friendly tools. Gain: GitHub integration, developer-first approach. Trade-off: smaller ecosystem, newer platform.
Shopify
Sellers wanting full e-commerce switch to Shopify for complete store control. Gain: robust app ecosystem, full customization, proven scale. Trade-off: monthly fees, more complex setup.
