Shopify rocked by sales fraud scandal that led to ultimatums and firings

Shopify salespeople exaggerated the value of deals they were closing in an apparent attempt to earn more commission, The Logic has learned. The sales fraud, which lasted more than a year, sparked an internal investigation that led to layoffs and a warning to staff who had faked sales numbers to own up or risk being found out and punished more severely, according to former staff and internal messages.

The wave of sales fraud at Shopify was partly the result of a lack of accountability combined with the pressure of aggressive quotas, according to five sources with knowledge of Shopify’s inner workings. The Logic is not naming the sources given the sensitivity of the information they shared. Shopify only noticed the fraud when new merchants went live on its platform and failed to deliver the numbers its sales team had projected.

Ben McConaghy, head of external communications at Shopify, said that a “single-digit number of salespeople” had “misrepresented” what they had sold. “We immediately investigated, fired them, and strengthened our systems. This had no impact on our financials and the issue is closed,” he added. McConaghy did not respond to questions about changes to the commission structure and sales practices at Shopify that may have led to the fraud.

It’s not clear how much revenue failed to materialize, but sources and an internal document viewed by The Logic suggest a gap of at least tens of millions of dollars—a portion of which would have been paid out to Shopify.

“This caused a huge problem because it happened at scale,” one source said. Another source said sales staff felt like they were playing a video game by chasing targets displayed on screens, rather than trying to build a business. They said that some salespeople at Shopify had figured out how to earn bigger commissions by using made-up numbers. One former staffer claimed that Shopify’s sales culture was built on salespeople misrepresenting numbers.

The investigation into the fraud coincided with a major reshuffle of Shopify’s senior leadership in early October, including the sudden departure of Bobby Morrison, the firm’s first chief revenue officer, who was the executive charged with expanding the sales operation.

Shopify’s sales division has grown considerably in recent years, with hundreds of people now tasked with signing up a range of merchants—from those who had never sold anything online before right up to massive enterprise clients—bringing them onto the Shopify platform and encouraging them to use additional Shopify services. 

Rumblings that Shopify had become aware of the fraud first emerged in mid-2024 when managers started asking salespeople for more information on suspicious deals. That suspicion soon resulted in meetings where salespeople were asked to explain their numbers. 

The investigation into the fraud resulted in a sales team being fired in late June, with Kaz Nejatian, then Shopify’s chief operating officer, telling staff to own up to falsifying the numbers by a specific date or face the consequences of being found out.

The fraud was able to proliferate, sources said, due to a culture of aggressive quotas and a new commission structure combined with an alarming lack of paperwork to track the value of deals. “It was internal stupidity that led to the opportunity for people to be able to take advantage of the situation,” a former staffer said.

Upon joining Shopify in August 2022, Morrison quickly set about revamping the firm’s sales practices to attract larger, higher-revenue merchants, sources said. Under his leadership, Shopify changed how sales staff were paid and gave them more aggressive targets.

The sales fraud focused on one key number: an individual merchant’s annual sales. For salespeople at Shopify, Morrison’s new commission structure meant that putting bigger numbers on the books earned them higher payouts. For Shopify, these sales projections were a guide to how much it could expect to make. The problem was, sources said, that sometimes these projections weren’t based on reality.

For a long time, within some parts of the sales division, the sales estimates put into Shopify’s internal systems required minimal verification, one source said, adding that merchants could simply write their annual sales figures in an email to the sales representative. Shopify eventually created a merchant validation form, sources said, which required a senior executive at the merchant’s company, such as a vice-president, to input the company’s revenue. While less vulnerable to fraud, the system still relied heavily on salespeople being honest, sources said.

Shopify’s commission structure was also unusual in that it paid salespeople on intent rather than actual revenue made. Salespeople earned their commission not only on the annual sales figures merchants said they would bring in, but also whether those merchants planned to use other Shopify services, such as Payments—its payment processing system. 

The money Shopify could make went up if merchants used more of its services, and so would the salesperson’s commission. That, too, was based on the merchant’s word and, eventually, their signature on the merchant validation form. “I was always amazed that we got paid on intent,” one source said. “I’ve never seen that before.” Two sources said Shopify did eventually attempt to rectify that problem across some sales teams by requiring merchants to activate Shopify Payments before the salesperson would be paid their commission.

When enough of the merchants linked to the made-up projections went live on Shopify and brought in significantly less revenue than expected, management noticed. In the middle of 2024, managers started asking salespeople about some of their deals. They wanted to understand why the revenue they were seeing come in didn’t align with projections, a source said. Sometimes there were reasonable explanations, but not always.

Shopify created lists of suspicious deals and, in the spring of 2025, management held more meetings with sales staff where they were asked to explain why the revenue numbers weren’t adding up, sources said. Those meetings could be with an individual sales representative or with a whole team; some were held with a company executive present. 

In June, with its investigation still ongoing, Shopify fired a sales team, according to a Slack message viewed by The Logic, as well as several sources.

Following the firings, Morrison took to Slack to explain what had happened. He said it was a correct, if painful decision. He called Shopify “a high-trust company” that must balance its desire for growth with “the highest level of integrity.” Morrison added that merchants using Shopify’s platform must be able to decide what services they do and don’t want. “We never make choices on their behalf without their explicit instruction,” he wrote.

In a message following the firings, Nejatian gave sales staff an ultimatum: own up to your actions by a set deadline or get found out by an AI tool Shopify had developed to identify suspicious deals and face more severe consequences, sources said. The message was sent to staff as both an email and a video. Nejatian left Shopify in September to become CEO of Opendoor. He did not respond to a request for comment.

As news of the fraud spread through the company, some sales staff felt angry. One former staffer said that those who didn’t inflate their numbers felt fleeced when they realized that some of the best-performing and best-paid staff in the division had fabricated their sales projections.

In early October, Shopify suddenly “parted ways” with Morrison, who was ultimately responsible for the actions of the sales team, and two other senior executives, vice-president of global partnerships Rukmani Subramanian and global head of commercial operations Ryan Longfield. Both were brought into the company by Morrison, according to a former staffer. Jess Hertz, Shopify’s new chief operating officer, told staff at the time that the departures marked “a turning point” and came after the company had shifted too far from its “core.” Morrison did not respond to a request for comment. 

A number of sources pointed to problematic changes made under Morrison’s leadership of the sales division. “Shopify is the best product I’ve ever sold in the most poorly run sales organization I’ve ever been a part of,” one source said.

One of Morrison’s biggest changes was to shift the sales team’s focus to larger enterprise clients rather than the small and medium-sized businesses that had been Shopify’s bread and butter. The shift left some teams feeling under-resourced, according to the former staffer.

Morrison also changed how salespeople were paid. Prior to his arrival as chief revenue officer, commission depended on what team a salesperson was on, one source said, but typically Shopify set employee targets based on the number of deals closed rather than their dollar value. 

Under Morrison, the commission structure was “unified,” sources said, with the amount paid out linked to the expected annual sales figures in the deals they closed.

An accelerator and decelerator were also added, sources said. This meant that high performers could make huge sums—one source claimed that leading salespeople were making about a million dollars when commission was added to their base salary. Salespeople who made less than 80 per cent of their quota would have their commission decelerated and receive a far smaller sum than before. “Complete bullshit,” one source said of the decelerator. Falling below the 80 per cent threshold also could mean being placed on a performance-improvement plan, one former staffer claimed.

Sales quotas also became very aggressive and, in some cases, unattainable, sources claimed. Ultimately, one former staffer said, targets were so hard to meet that some salespeople struggled to make much commission. The former staffer said the changes to the sales division ended up “taking money” out of the pockets of salespeople suddenly unable to meet their targets. “People were pretty upset by that,” they said.