Fair and Square

February 13, 2014

dog

On the Internet, nobody knows you’re an underdog.

It has been a crazy 36 hours for me.  I wrote a blog post about my poor experience with Square yesterday morning, and shared it on my Twitter and Facebook accounts. It got shared and retweeted a handful of times by my friends, and even a few strangers, which was pretty much the life cycle I expected of it.  But then, it kept getting shared by more and more people, until my Twitter Interactions feed was updating literally every few seconds.  The story got picked up by Hacker News, then reposted by Valleywag/Gawker. Since then it has also appeared in Business Insider and other media outlets. My inbox is inundated with requests for comment or permission-to-repost from various online media sites.

Tons of people wrote to me or posted  in the comments. Their responses ranged from sharing their own bad experiences with the credit card processing industry at large, to suggesting services and credit card processors they are happy with, to great advice about steps my store can take to prevent fraudulent transactions in the future.  In all, over 28,000 people read the original post so far, and that’s not counting the versions up on Valleywag and elsewhere.

As I tried to work while watching this thing explode on the Internet yesterday, I couldn’t help but wonder if it would prompt a direct response from Square. And it did.

Just before 5pm, a gentleman from Square Customer Support team called me at the store. We spoke for about ten minutes. The conversation did not go well.

First of all, he informed me that Square did, indeed, attempt to fight the chargebacks on my behalf, but that they lost those cases. I was told that they were going to inform me of this via e-mail “soon,” but since I expressed a strong desire to learn the fate of these transactions on Twitter, I was being given a more immediate update by phone.

Losing the chargebacks does suck, but I could accept that, if all the other parts of this scenario had played out differently. My real issue was with the lack of communication, which I expressed to him, and he acknowledged that they could have done better in that regard, and are working on improving that aspect of their business.

Then the conversation got around to the cancellation of the store’s account. He started off by explaining that collectibles are a high-risk sort of item with lots of fraud potential, and that they planned on disallowing the sale of this type of item via Square e-commerce portal in the future. Which is interesting, because how exactly do you define a collectible, and who is going to evaluate listings and enforce this policy? According to Wikipedia, the only type of  items Square currently disallows to be sold using their service are firearms.

Then he offered to provide me with some “helpful information on how to detect/avoid fraudulent online transactions in the future”. Umm, OK.

Look, Square, if you possess such valuable and useful information then perhaps it might be a good idea to just make it available on your web site for all your merchants to peruse. You know, for the sake of humanity?

But it was the next thing he said that floored me.  He told me that, while my store wouldn’t be able to continue to accept Square payments online, they would allow us to use the Square reader device in-store and for other in-person transactions.

Really, Square? Really? Isn’t it a little like breaking up with someone over text message, and then magnanimously suggesting that you’d be willing to still be friends with them?

I could have had a field day with this suggestion, but I didn’t. After all, it wasn’t this poor guy’s fault. He drew the short straw of delivering bad news to an already irate customer. He had no actual good news to offer me, and he knew it. So, instead of taking out my frustration on him, I explained as calmly as I could manage the ways in which their decision to cancel my account without notice screwed over my business, and how all of this could have been avoided with a simple “Hey, we’re sorry, but we aren’t comfortable processing your transactions. Why don’t you go ahead and take a week or two to set up a replacement, so you don’t lose a metric ton of business while the e-commerce site you’ve been advertising to all your customers for a year is suddenly taken down.”

Once again, he acknowledged that they could have handled all of this better. Then I thanked him for the call, and got off the phone.

Shortly after I got home form work, one of my employees called to let me know that someone else from Square had tried to reach me. This gentleman left a toll-free number and a twelve-digit pin code, and asked that I call him back. He said that he would also leave a note with an operator to forward my call, in case the pin didn’t work (I guess this happens often enough to warrant the backup plan.) I immediately tried to call him back, and, sure enough, the pin didn’t work.

Their toll-free number gives you three chances to input the pin. If you enter an invalid pin three times, it hangs up on you. I’ve tried pressing zero, and pound, and thinking positive thoughts at it, but there was no way to reach an operator.

Now that I had a name of the person who actually wanted to talk to me at Square, I wasn’t about to give up easily. I tweeted at their account, in case whoever was manning it would get the message across. I e-mailed them through the web form. I also Googled their company and, after a few minutes of searching, found their corporate phone number. When I called it, it asked me to enter the extension of the person I was trying to reach. Once again, I found no way to get to a live operator.

I was beginning to suspect that I was either trapped in an absurdist science fiction story, or these guys really didn’t like telemarketers. Or both.

My frustration was greatly tempered by an amazing outpouring of support from the online community. People kept spreading the story. They offered emotional support as well as information and advice on how to proceed. I spoke to several competent web designers about setting up a more traditional shopping cart. Several companies offered their services for processing online transactions. Shopify generously offered to waive six months worth of fees at their Unlimited account level (that’s almost $1000), if I wanted to try their service. I spoke to a very nice Market Development manager at PayPal in New York, who asked what they can do to help my business, and then set up an  appointment to come to see my store in person the next day. And, being an eternal optimist, I still hoped that this second phone call from Square would eventually bring better news.

It felt like the entire Internet briefly forgot how to argue and troll, and just decided to be nice to me. I went to bed exhausted by the events of this day, but in a much better mood.

In the morning I woke up and checked my email. The subject of one of them read:

Square has sent you $2,280.78

Square has initiated a wire transfer to our bank account of, what I assume, is a full amount of disputed transactions less their standard 2.75% fee.

At this point, I don’t know if they managed to convince the credit card companies to cover these chargebacks after all, or if they decided to pay it out of their own pocket. I still haven’t managed to speak to that second person from Square (although I did finally get an e-mail from him late this evening, asking for a number where I can be reached tomorrow, so this conversation is likely going to take place.) The fact of the matter is that they did act to address this situation and help my store out of this jam.

There are lots of fascinating ethics problems here. As a self-interested individual, I’m obviously thrilled to have my money back. But is this resolution fair? Should I have expected far less, given how often merchants lose chargeback cases, out there in the real world? Should I have expected more, given the additional loss of business and the fact that our account is still cancelled, not because we did something wrong but due to the cold equations of risk management? And if Square covered the loss, is this fair to them? Or have I leveraged the power of social media to extort a favorable resolution?

My good fortune for the day didn’t end there. I met with a pair of very enthusiastic and kind folks from PayPal, who took the cab from the city all the way to South Brooklyn to visit my store and listen to my story, then set out to see what they could do to help on their end.

They offered to set up a PayPal-based shopping cart on our site at their cost (a service that would have set me back $500 had I hired a freelance programmer to do it, based on a quote I obtained yesterday), and to also set up a PayPal Here-enabled POS terminal for our in-store transactions. They were genuinely excited to be able to help us grow our business in partnership with them, even if our store is tiny compared to their volume of business. One of them will return next week, to help us set up this terminal and train our staff to use it.

The goal of this follow-up post isn’t to bash Square for their lack of transparency, nor it is to praise them for their quick and decisive action regarding the disputed funds. It isn’t even to shill for Shopify and PayPal, although their willingness to step in and help deserves  to be recognized.

It’s to thank the online community.

If this conundrum happened before the age of social media; if dozens or even hundreds of people didn’t feel this story deserved being shared with their friends and co-workers, if blogs and aggregator sites and online reporters didn’t find my plight compelling enough to cover, I would have never achieved this outcome.

Internet isn’t just a vast repository of baby photos and cat memes. It’s an enormously powerful social engine that can, and often does, empower the little guy. On the Internet, nobody knows you’re an underdog, because with a few clicks of a mouse the netizens can make your voice heard as loudly as that of a major corporation.

So, from the bottom of my heart, thank you. I now return you to the regularly scheduled cat meme.

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Posted by Alex Shvartsman

Screwed by Square

February 11, 2014

squarereader

In addition to making the small bucks as a science fiction writer, I have a day job. I run a game store which hosts events and serves the local community here in Brooklyn, but also sells games and collectibles online and at shows/conventions.

When Square came out with their portable credit card reader, I was very excited to adopt this technology. In exchange for a little under 3% of each transaction, they provided a way to turn my cell phone and my iPad into credit card machines. Portable, convenient, reliable. What’s not to like?

I loved the product. I carried the Square reader with me any time I traveled to events, and used it to complete hundreds of transactions. I told everyone who would listen how it was the best thing since sliced bread.  When the regular credit card terminal at my store broke down, I used Square while waiting for a replacement terminal to arrive.

“Wouldn’t it be great,” I mused, “if Square added a way to accept credit cards online, so I could use them for e-commerce, too.” And, sure enough, they did. It was easy to use, and I eagerly set up their service as the way to process all orders on my store’s web site. This was in July of 2013, and for a few months everything was good. Then the trouble began.

In November 2013, someone used stolen credit card numbers to place several large orders on my site.  Before I or anyone else caught on, my staff ended up shipping approximately $1800 worth of trading cards to different addresses provided by these thieves. The addresses weren’t even in the same state, and the transactions weren’t so out of line with other orders placed through the site for us to become suspicious.

The first time I knew there was a problem was in mid-November, when I received two chargeback notices from Square, totaling nearly $1200.  Here’s what a chargeback means: A consumer finds fraudulent transactions on their credit card and notifies the credit card company. They then contact the processor (in this case, Square), and Square holds the money in escrow while they investigate the incident.

Unfortunately, credit card fraud is a relatively common problem. I deal with occasional chargebacks in-store, and through PayPal for our eBay transactions. In all PayPal cases, I have been able to get my money back once I provided proof that we shipped the item where we were supposed to, with tracking and delivery confirmation. Resolving such a case typically takes from a few days to a few weeks.

Square has a slightly different procedure. For each chargeback, they provided a link asking me to fill out a survey and provide supporting data such as invoices, receipts, and communications with the buyer. None of which I had, since the entire transaction was handled online, directly through Square. That’s OK though — their FAQ suggests that even without additional documentation, they will represent the seller and try to resolve the dispute on their end — just like PayPal would.

Unlike PayPal however, it seemed that they just withdrew the disputed funds from my store’s bank account, without any additional follow-up.

I wanted to call and speak to their fraud prevention department in order to figure out how we can best comply with their policies to avoid future problems. That’s when I discovered that Square didn’t really want to talk to me. At least not on the phone.

They don’t have a phone number listed on their web site. A Google search unearthed a number, but it was literally nothing but a recording, directing the listener to go to their web site. So to the website I went, sending them the following message through their web form:

Hello,

We use Square to process all orders on our web site, and in the last 2 weeks or so we had two large chargebacks (over $1000 total!). I was hoping to speak to someone to find out about the status of the dispute on these, as well as figure out if there’s a way to better protect ourselves from future chargebacks. The orders are taken via web so we do not interact with the customer directly or have copies of the credit card or much additional info — like with any online transaction. I wanted to make certain that it’s safe for us to continue accepting large orders via Square.

Thanks very much in advance!

Sincerely,

Alex Shvartsman

It took almost a week for them to respond. On December 2, I received the following reply (emphasis mine):

Thanks for writing in. At this time, we do not provide live phone support. Our Support team operates over email in order to serve you most effectively. We also need to keep all communication with our merchants documented in writing.

Thanks for providing the requested information and documentation. We will respond to your customer’s billing disputes on your behalf and hope to receive a resolution soon. We will notify you once we’ve received a decision from your customer’s bank. Please note that it may take up to 90 business days to resolve these disputes, but we will provide updates throughout this process.

Please visit our Help Center if you would like further information around the dispute process: https://squareup.com/help/en-us/article/3882-understanding-chargebacks

If you have further questions, feel free to reply to this email. We would be glad to help.

At this point there was already a third chargeback, for a grand total of nearly $1800. We caught and canceled a couple more orders that looked suspicious, avoiding some further pain.

$1800 is a lot of money to me. What’s worse, these items are sold on incredibly low margins. After the wholesale cost, shipping, and processing fees, I make approximately $5 in net profit for each $90 box of trading cards sold. (And that’s not counting fixed costs!) So an $1800 loss wipes out profits from literally tens of thousands of dollars in sales.

Much of this is my fault. As the online sales portion of my store kept growing, I should have set up a more reliable e-commerce solution by now. But I liked Square. They were a scrappy young company providing a cool service, and I wanted to be along for the ride. They were the good guys. They said they’d take care of this (or at least do their best). And so I continued to use Square to process all orders on my web site (with no further problems, I might add), and I waited.

Late last week, I received another chargeback. It wasn’t for a recent transaction, but for another order that took place back in November and was, no doubt, part of the same problem as the three others. When I came into work on Monday, one of the first things I did was to fill out their chargeback response form again. Less than two hours later, I received the following e-mail:

Hello Alex,

Our Account Services team has concluded a review of your account and has determined it to be high risk. For security purposes, we have elected to deactivate your Square account. From the date of this letter forward, you will not be able to process credit card transactions using Square.

To learn more about Square’s Seller Agreement and terminations, please visit: Seller Agreement.

Any funds currently in your account will be deposited to your linked bank account within 1 – 2 business days. Typically funds will be shown in your account the following business day after they have been deposited, but keep in mind that each bank’s policies are different so it may take a little longer. You’ll receive an email as soon these funds have been sent to your bank.

For security reasons, we cannot divulge the reason for your account termination. We apologize for the inconvenience, but our decision is final.

Thank you for understanding.

Sincerely,

Square Account Services

So not only has Square done nothing so far to help me resolve these chargebacks, not only did they withdraw 100% of the funds in question from my bank account, but they also punished me for being a victim of fraud by shutting down my account without advance notice, even though I have processed hundreds of legitimate transactions with them before and since this incident.

I’m out over $2300 to date, but this will end up costing me even more money in lost business. This Monday alone, my employees and I packed and shipped out approximately 250 orders we received through eBay and other seller portals over the weekend. Each of those shipped orders included a flyer inviting our customers to visit our Square-supported site. Those of them who might, will find that they can no longer place orders with us there, and we’ll most likely lose their repeat business. We’re now scrambling to get a PayPal shopping cart installed on the site, but that will take some time.

Meanwhile, it has been nearly 90 days since the initial chargeback was initiated through Square. I received none of the “updates throughout the process” that they promised. There is no way to view any sort of info regarding disputed transactions on the Square web site.

At this point, I’m far from optimistic about any sort of positive resolution. I’m posting this as a cautionary tale for anyone who might consider using Square for any larger-scale transactions, such as e-commerce. They created a cool, innovative product, but it seems that, as they rapidly grew as a company, they failed to build a robust customer service department or even a reliable way to communicate well with their own merchants.

As to the ability to swipe credit cards on the go, there are now many other companies providing that service. I’ll just have to move on, poorer for the experience.

paypal-here#SFWAPro

Read the sequels to this post and the Square saga:

Fair and Square

Moving Forward

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Posted by Alex Shvartsman

My PhilCon 2014 Schedule

November 20, 2014

I’m PhilCon-bound this weekend and here’s my event schedule:

Fri 7:00 PM in Plaza III (Three) (1 hour)
SETTING UP A CROWDFUNDING PROJECT (1826)

[Panelists: Danielle Ackley-McPhail (mod), Rob Balder, Neil Clarke, Gil Cnaan, Alex Shvartsman, Alyce Wilson]

Panelists discuss what worked, what didn’t and why. How can you  promote one to make sure it is a success

Fri 8:00 PM in Crystal Ballroom Two (1 hour)
DEFYING THE SQUARE CUBE LAW (1796)

[Panelists: Alex Shvartsman (mod), Bob Eggleton, Lawrence Kramer, James Prego]

Consider really huge monsters. Sure we like ’em big and capable of stomping cities, but is there any way to make a Godzilla or Chthulhu plausible

Sat 10:00 AM in Autograph Table (1 hour)
AUTOGRAPHS – NEIL CLARKE, ALEX SHVARTSMAN (2022)

[Panelists: Alex Shvartsman (mod), Neil Clarke]

Sat 3:00 PM in Plaza V (Five) (1 hour)
DOES SCIENCE FICTION NEED TO LIGHTEN UP? (1771)

[Panelists: Alex Shvartsman (mod), Brian Thomas, Berakha Lana Guggenheim, Steve Miller, Robert C Roman, Lee Gilliland]

Has the genre become too serious and pretentious in recent years? Do too many writers feel they are philosophers and teachers?

Sat 6:00 PM in Executive Suite 623 (1 hour)
READING – APRIL GREY, ALEX SHVARTSMAN (2006)

[Panelists: April Grey (mod), Alex Shvartsman]

Sat 9:00 PM in Plaza II (Two) (1 hour)
ELLO FACEBOOK, GET OUT OF MYSPACE. (1728)

[Panelists: Rock Robertson (mod), Gil Cnaan, Muriel Hykes, Suzanne Rosin, Alex Shvartsman]

Well, here we go again. Another social network rears its ugly head and everyone contemplates jumping ship. Discuss as former GEnie members nod wisely.

Sat 10:00 PM in Crystal Ballroom Two (1 hour)
FUNNY HORROR STORIES (1769)

[Panelists: Brian Koscienski (mod), Darrell Schweitzer, Alex Shvartsman, Robert Corry, Brian Thomas, April Grey]

There is a fine line between horror and humor.  How do the successful examples of this work

#SFWAPro

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Posted by Alex Shvartsman

Moving Forward

March 9, 2014

paypal-here

The trope of a Faceless Evil Corporation oppressing an everyman is all too common these days. It is perpetuated by movies and television. News of such an event can spread like wildfire online, as was the case with my own recent debacle. It is, in fact, so entrenched in our cultural psyche that any experience contrary to this trope might be met with suspicion and outright disbelief.

We tend to forget that corporations are often comprised of smart, motivated people who almost never own sharks with lasers attached to their heads, and are far more likely to go an extra mile to do something good than to twirl their mustaches while thinking of ways to frack for oil under your house.

I was recently a recipient of an act of kindness by a group of employees from three different companies, and I want to share that story.

If you aren’t already familiar with my e-commerce adventures, you might want to start by reading these posts:

1) Screwed By Square
2) Fair and Square

It has now been almost a month since the Square fiasco.  A few days after that second post I did finally get to speak to several folks from Square on a teleconference call. They wanted to hear my side of the story and figure out how to avoid similar calamities in the future.

Recently they reached out to let me know that, partially due to what happened in my case, they rolled out a Seller Protection Program.

Unfortunately, this program is rather toothless at this point. There is a long list of items that aren’t covered under the High Risk Goods section. It includes “electronics, collectibles, pre-ordered goods,” and much more. I wouldn’t have been covered under this program. Neither would most merchants selling the sort of items that might appeal to credit card thieves. Still, I’m glad that Square is beginning to move in the right direction on this, and hope they won’t stop at a half-measure.

Much of the attention has been focused on the chargebacks, but the greater issue to me has always been the fact that my account was dropped without notice, despite an otherwise-exemplary record. My web store, built and hosted with Square, went dark with no immediate substitute available.

This is where PayPal stepped in. They reached out to me, after hearing my story, and asked what they could do to help. I explained that I’ve been a PayPal user since almost Day 1, but didn’t have the skills necessary to install a PayPal-based shopping cart. The advantage of Square was that they offered a way for someone like me to sell products online without spending a lot of time or money to develop a sophisticated e-commerce site. I asked if they might be working on a solution similar to Square’s that I could adopt? Alternatively, I was prepared to have someone do a professional install of a shopping cart on my web site (a service for which I was quoted a price of $500).

pph

I was blown away by their generosity. PayPal offered to have their developers install the shopping cart for me, free of charge *and* to provide my store with a physical PayPal Here terminal to handle the in-person transactions. But they ended up doing even more than that!

PayPal teamed up with Wix and Ecwid to help my store completely rebuild and re-launch its web site. What’s more, they proved that even a very casual user with limited or non-existent programming skills can do the same.

Our original web site hasn’t changed in twelve years. Designed by a friend way back when we first opened the store, it was long past its prime, a PHP dinosaur held together with duct tape and stubbornness.

wixEnter Wix.com. These guys created a web design platform that allows their users to build very sophisticated web sites–with things like scrolling image galleries, app plug-ins, and blog tools–while knowing absolutely nothing about HTML.

The site building tool looks and feels more like Microsoft Publisher. You drag and drop different elements (which range from simple text boxes and contact forms to sophisticated blog and database elements. Everything is highly customizable, down to colors and shapes of the boxes.

A Wix expert helped us port the look and feel of the site, allowing us to keep our logos and color scheme while making the design way slicker.

When I was first shown the interface, I was very excited to play with it and have made numerous site changes on my own. This is definitely something a casual user can learn in only a few days, and there are lots of templates to help a newbie get started even faster. I’m still tinkering with the elements of it whenever I have a free minute, and learning more about its nifty features. I haven’t even gotten into the SEO features yet, but I fully intend to!

Thanks to Wix, my store’s web site went from this:

oldkg

To this:

newkgYou can also visit the live site, to see what I’m rambling about.

Another really important feature of a Wix site is that it’s very easy to integrate an Ecwid shopping cart into it. Which brings us to the second point:

ecwid1

An Ecwid shopping cart is another tool that can be set up by someone with zero programming experience.

There are many similarities between Wix and Ecwid in that both platforms are very customizable and offer an expert user great flexibility, but they are also simple and intuitive enough to allow a casual or new user to muddle through.

It’s very simple to create categories and add in products, and even link the same storefront through your Facebook page. Setting up shipping and tax tables is only slightly more complicated, but very doable. And if you want to adjust the look and feel of the site that’s a little bit more sophisticated, but still very achievable by a layperson.

One of my favorite features of the cart is coupon creation. You can set up very specific coupons and discounts, both by % of sale and a set $ value. You can have coupons be single-use or multiple use, and apply to specific items or categories. For example, right now I’m running a 20% off sale for all the UFO Publishing books listed on the site. The sale will last for only 48 hours, until end of day Tuesday, March 11. All you have to do is enter the coupon code UFO20 at checkout. (See how I snuck in an ad for my books there?)

And, of course, hooking in your PayPal account and setting up PayPal Express Checkout (which lets customers avoid the annoying process of creating Yet Another Account) is super easy!

paypal

Which brings us back to PayPal. After doing my research, I found them to be the only company to offer sufficient protection against chargebacks. As long as I follow a few simple instructions (ship the item to the address they provide via trackable means and with signature confirmation for orders over $250) they essentially insure the transaction, greatly reducing the risk for small businesses like mine.

Not to mention the fact that they masterminded this entire alliance to help me. You better believe I’ll be waving the PayPal card reader around at the upcoming conventions!

I’m enormously grateful to everyone at PayPal, Wix, and Ecwid who helped me. These very busy people took the time out of their schedules and worked together on this project. Representatives from three international corporations came together to help the little guy.

This update probably won’t get the kind of traction my original post did. It’s much easier to spread a story of being wronged by a company than a story of being helped by one (or three.) But I hope it does, because an act of kindness deserves at least as much recognition and praise as the attention given to an instance of poor customer service.

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Posted by Alex Shvartsman