diff --git a/WooCommerce/src/main/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabled.kt b/WooCommerce/src/main/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabled.kt
index ec4901756b4..4f5bb0ee216 100644
--- a/WooCommerce/src/main/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabled.kt
+++ b/WooCommerce/src/main/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabled.kt
@@ -73,10 +73,10 @@ class WooPosIsEnabled @Inject constructor(
             is CardReaderOnboardingState.StripeAccountOverdueRequirement,
             is CardReaderOnboardingState.StripeAccountRejected,
             is CardReaderOnboardingState.StripeAccountUnderReview,
+            is CardReaderOnboardingState.StripeAccountPendingRequirement,
             CardReaderOnboardingState.WcpayNotActivated,
             CardReaderOnboardingState.WcpayNotInstalled -> false
 
-            is CardReaderOnboardingState.StripeAccountPendingRequirement,
             is CardReaderOnboardingState.OnboardingCompleted -> true
         }
 
diff --git a/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/payments/cardreader/statuschecker/CardReaderStatusCheckerViewModelTest.kt b/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/payments/cardreader/statuschecker/CardReaderStatusCheckerViewModelTest.kt
index bca4610e06f..72395e022e2 100644
--- a/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/payments/cardreader/statuschecker/CardReaderStatusCheckerViewModelTest.kt
+++ b/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/payments/cardreader/statuschecker/CardReaderStatusCheckerViewModelTest.kt
@@ -21,6 +21,7 @@ import org.junit.Test
 import org.mockito.kotlin.mock
 import org.mockito.kotlin.verify
 import org.mockito.kotlin.whenever
+import java.math.BigDecimal
 
 @ExperimentalCoroutinesApi
 class CardReaderStatusCheckerViewModelTest : BaseUnitTest() {
@@ -436,6 +437,75 @@ class CardReaderStatusCheckerViewModelTest : BaseUnitTest() {
                 )
         }
 
+    @Test
+    fun `given woo pos connection and onboarding failed with error, when vm init, then navigates to onboarding`() =
+        testBlocking {
+            // GIVEN
+            val param = CardReaderFlowParam.WooPosConnection
+            val onboardingState = CardReaderOnboardingState.StripeAccountRejected(
+                preferredPlugin = PluginType.WOOCOMMERCE_PAYMENTS,
+            )
+            whenever(cardReaderChecker.getOnboardingState()).thenReturn(onboardingState)
+
+            // WHEN
+            val vm = initViewModel(param)
+
+            // THEN
+            assertThat(vm.event.value)
+                .isInstanceOf(CardReaderStatusCheckerViewModel.StatusCheckerEvent.NavigateToOnboarding::class.java)
+        }
+
+    @Test
+    fun `given refund flow and not connected and error, when vm init, then navigates to onboarding with fail`() =
+        testBlocking {
+            // GIVEN
+            val orderId = 1L
+            val param = CardReaderFlowParam.PaymentOrRefund.Refund(orderId = orderId, BigDecimal.TEN)
+            whenever(cardReaderManager.readerStatus).thenReturn(MutableStateFlow(CardReaderStatus.NotConnected()))
+            val onboardingError = CardReaderOnboardingState.StripeAccountPendingRequirement(
+                dueDate = 0L,
+                preferredPlugin = PluginType.WOOCOMMERCE_PAYMENTS,
+                version = pluginVersion,
+                countryCode = countryCode
+            )
+            whenever(cardReaderChecker.getOnboardingState()).thenReturn(onboardingError)
+
+            // WHEN
+            val vm = initViewModel(param)
+
+            // THEN
+            assertThat(vm.event.value)
+                .isEqualTo(
+                    CardReaderStatusCheckerViewModel.StatusCheckerEvent.NavigateToOnboarding(
+                        CardReaderOnboardingParams.Failed(param, onboardingError),
+                        CardReaderType.EXTERNAL
+                    )
+                )
+        }
+
+    @Test
+    fun `given card reader hub flow and not connected and error, when vm init, then navigates to onboarding with fail`() =
+        testBlocking {
+            // GIVEN
+            val param = CardReaderFlowParam.CardReadersHub()
+            val onboardingError = CardReaderOnboardingState.StripeAccountPendingRequirement(
+                dueDate = 0L,
+                preferredPlugin = PluginType.WOOCOMMERCE_PAYMENTS,
+                version = pluginVersion,
+                countryCode = countryCode
+            )
+            whenever(cardReaderChecker.getOnboardingState()).thenReturn(onboardingError)
+
+            // WHEN
+            val vm = initViewModel(param)
+
+            // THEN
+            assertThat(vm.event.value)
+                .isInstanceOf(
+                    CardReaderStatusCheckerViewModel.StatusCheckerEvent.NavigateToOnboarding::class.java
+                )
+        }
+
     private fun initViewModel(
         param: CardReaderFlowParam,
         cardReaderType: CardReaderType = CardReaderType.EXTERNAL
diff --git a/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabledTest.kt b/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabledTest.kt
index f9374ba5681..39260ccef3d 100644
--- a/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabledTest.kt
+++ b/WooCommerce/src/test/kotlin/com/woocommerce/android/ui/woopos/WooPosIsEnabledTest.kt
@@ -102,12 +102,12 @@ class WooPosIsEnabledTest : BaseUnitTest() {
     }
 
     @Test
-    fun `given ipp onboarding is Pending Requirements, then return true`() = testBlocking {
+    fun `given ipp onboarding is Pending Requirements, then return false`() = testBlocking {
         val onboardingCompleted = mock<CardReaderOnboardingState.StripeAccountPendingRequirement>()
         whenever(onboardingCompleted.preferredPlugin).thenReturn(PluginType.WOOCOMMERCE_PAYMENTS)
         whenever(cardReaderOnboardingChecker.getOnboardingState()).thenReturn(onboardingCompleted)
 
-        assertTrue(sut())
+        assertFalse(sut())
     }
 
     @Test