Screwed by Square


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:


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!


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:

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.


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.


Read the sequels to this post and the Square saga:

Fair and Square

Moving Forward


70 Responses to Screwed by Square

  1. Ugh! I hate people like that. Good luck finding a replacement vendor that isn’t a total jerk.

  2. timwburke says:

    Thanks for the warning. My comic book store is going to expand into online, and I will avoid Square.

    • If you need a quality online credit card processing with low fee’s and great 24/7 customer service email Patrick Wilson with a company called Chosen Payments The email address is If you were to sign up as a client you will even have my personal cell phone number to call if you ever needed any help. I have heard the above story a thousand times and it makes me mad that a company like that would hurt so many small business owners. Maybe a couple thousand dollars to them isn’t important but that could be the difference between keeping the lights on for some businesses. I will do an free upfront rate analysis show in black and white exactly what my company can do for any business owner out there that wants to be treated fairly and build a long term business relationship. Thanks

  3. Ben Isgur says:

    That really sucks. Both PayPal and Square are really heavily incentivized to have no upset customers, but not to be fair to merchants; I used to own a business selling WoW Loot cards and we dealt with SO much of that shit. Have you considered accepting Bitcoin as an alternative payment method? No chargebacks and lower fees (~1% instead of ~3%) through Coinbase. I wrote a brief e-book explaining the technology if you are interested in finding out more:

    Don’t mean to be spamming my blog, but it seemed like you might be interested in it as an alternative.

    Hope you can find a good resolution down the line!

    • Not at all — I appreciate the feedback and don’t mind the link 🙂

      Since most of our customers probably haven’t embraced BitCoin yet, do we do need a more conventional method of processing payments, at least for now.

      • Ben Isgur says:

        Absolutely–Bitcoin is an addition right now, not a solution. It would need much greater adoption to be a primary checkout method.

      • Chad Daniel says:

        You would be surprised on who has bitcoins. Given the cost of adding them as an option is nominal, there is almost no reason not to. Not to mention people with bitcoins actively seek out places to spend them. and are probably the biggest players in the market.

    • Lee says:

      Considering all the problems I hear about with Bitcoin (e.g., ) it seems that it’s not yet quite “the answer to it all”. It seems to still have a long way to go before it works out all its problems and can gain the trust it need form the general public (Bill Gates’ recommendation doesn’t mean much to a lot of people). Until financial institutions are willing to pay the money to implement top-notch security systems and be willing to accept responsibility for bad transactions and provide the seller (as well as the customer) with the help they need, the state of online transactions will continue to be in this shape (and I do online transactions myself).

      • Ben Isgur says:

        That particular problem has little to do with accepting BTC online in your store. Coinbase makes setting up BTC acceptance very simple, and they handle all the various risks and curiosities associated with accepting and utilizing it. It’s a zero-risk way to add an alternative payment channel that is very business-friendly, with no chargebacks and lower fees.

      • Erik says:

        Bitstamp is a money market, however. If you have a bitcoin wallet you can pass coins back and forth between consumer and merchant all day with no issues.

        You just need to have a constant finger on the market’s pulse so you can set adequate price points in BTC relative to current physical currency exchange rates. BTC is still in flux as it tries to settle in on a price point.

      • leeundLee says:

        @Erik That’s why it will be hard for it to gain widespread acceptance. People today are busy enough without having to continually keep track of their money and its value. I don’t know any one who wants to have to pull out their laptop or smart phone and check the value of their bitcoins before they can purchase something.

      • mathemagicalman says:

        Well, the same can be said about any currency. Once you exist in a market dominated by a singular currency, you stop paying attention to the relative value of it compared to other currencies. You know that a burger is 20 mBTC, and that’s how much it will stay unless whatever burger place you go to decides to raise prices. Once there’s a large enough bitcoin ecosystem, the value will stabilize and there won’t be that hour to hour price checking

      • Ben Isgur says:

        What you are describing is exactly what Coinbase does. You price things in USD, they calculate the price in BTC for the customer, the customer pays Coinbase in BTC, Coinbase pays you in USD. They accept the exchange rate risk, the hassle of exchanging, and the hassle of repricing.

      • mathemagicalman says:

        Ben, I tend to avoid coinbase for numerous reasons. Wallet-to-wallet transfers is really what bitcoin needs to begin to stabilize. Consumer BTC price points need to be established. Until then, bitcoins are a commodity in themselves.

      • Ben Isgur says:

        I’m curious to hear. Could you tell me your reasons? I’m legitimately always interested in hearing feedback on exchange services, as I run a review for them.

  4. Matt says:

    Words I never would have thought anybody would type: “I’m tired of getting screwed by poor customer service and arbitrary account freezes, so I’m switching to PAYPAL!”

  5. Matthew says:

    paypal heavily sides with the seller and not the customer, i think square tried to do the opposite as their “thing”. If i were a seller i would always use paypal because they instantly side with you and then its up to the customer to prove fault.

    • I’m not sure I agree with that as a seller… They will side with the buyer any time there is no definitive prove the item has been delivered (such as UPS or USPS tracking) — but they’re also willing to listen to the seller’s side, and have live customer support.

    • Frank says:

      That makes sense given the vendor is the chokepoint/leverage point closet to the transaction, going to the consumer is admirable but the automation of operations clearly cannot yet scale. Bitcoin’s promise is seductive in its idealistic efficiency that allows the value players to keep more of the value they provide. It will be great when all this stuff mature – great for the consumer, great for the vendor and the intermediary will…… will the writings on the wall. The only question is for how long the special interests of these powerful intermediaries can hold back the tide of technology through the artifice of regulation as technology remakes their business beneath them and they struggle to reinvent their business. They should not give up hope- after there is still a horse and buggy trade out there somewhere still 😉

  6. can you sue them or something?

    • I’m not litigious, but even if I was, they broke no laws. They’re allowed to cancel any account they want and they aren’t *obligated* to fight chargebacks. It’s just a really poor way to run a business.

  7. Seth says:

    As a former owner of an online TCG selling company, do yourself a favor and get an actual merchant processor and gateway. Your business’s bank most likely offers one. There are methods using them off site via smartphone and tablet that while not as sleek as paypal’s reader, are most definitely worth the hassle.

  8. payment_nerd says:

    Welcome to the wonderful world of online credit card payments!

    Square probably did actually do everything they could to resolve those chargebacks. If you had not been using Square, but instead had a merchant account of your own and were doing your own credit card handling through a processor such as Authorize.Net or Merchant e-Solutions or Braintree, or anyone else, you would have the same result.

    The credit card associations are owned by the issuing banks, and they have set it up to favor their customers (the card users), and to minimize their risk. Thus, to successfully dispute a chargeback, you have to have a lot of evidence–evidence that you almost never can have for an online sale.

    Even if you do successfully dispute a chargeback, you still end up losing. There is a chargeback fee, which is typically in the $20-30 range, that you get hit with regardless of whether or not the chargeback ultimately goes through or is reversed.

    BTW, the risk minimization on the part of credit card issuing banks is why proceeds from credit card sales go from the payment processor to your merchant bank account, and then from that account to your regular business banking account. Since credit card users can chargeback months after the transaction, and since the issuing banks do not want to be at risk if the seller is no longer around, there has to be an intermediary who will step in and take the loss in that case. That’s the merchant bank.

    This is why before you can get a merchant account for credit card processing, you have to undergo a financial colonoscopy. The merchant bank is accepting the risk the you will collect a bunch of money for goods you don’t have, take the money and run, and leave them to pay back all your customers.

    To summarize, the minute the credit card owners initiated the chargebacks, you were screwed, because that is how the credit card processing system is designed.

    • It’s definitely a hassle, but my overall experience dealing with chargebacks has been more positive than that. I have had to deal with AMEX and MasterCard directly for in-store transactions, and was able to successfully fight off a chargeback.

      However, the real issue isn’t Square’s ability to win the chargeback. It’s their lack of transparency (if they did, indeed even try, I wouldn’t know it) and – mostly – it’s their decision to cancel our account, screwing up our existing business, with no appeal process and for no reason other than the fact that we’ve been a target of fraud.

      That’s the part where I feel “screwed” the most.

    • Jeanne says:

      I couldn’t help but be interested in what has happened to you, Alex. I use square and fortunately as of today have not had any issues with them. I do have issues with bank initiated processors though. I do not appreciate being lied to, as I’m sure no one does, but that’s what happens once you sign on the dotted line. In brief, after my assistant limited the number of hours she was available to get into the office, I started taking a closer look at bank statements. I had to sit down once I realized that the 2.25% (which was a pretty good rate, so I thought) was actually more like 10 to 18% depending on the amount of sales, once all of the fees were added to the bill. I was stunned to say the least. I’m not naive about service charges, but I certainly had never taken a closer look at all the nickle and dimes and sometimes $3 and $4 or $8 fees on the bank statement.

      Everyone wants their cut of every sale/swipe you make. We swipe and usually don’t even think about what it’s costing us for that $10 or $500 swipe. I would encourage everyone to take a closer look at their monthly statement and do the math. Just take a look at all your sales minus all the charges and you will need to sit down in order to process what you are paying. There are transaction fees cleared at rewards, check card debit/prepaid fees, visa sales discount fees, visa network fees, visa debit sales discount fees, acquirer processor fees, visa/master card assessment fees, visa wats auth fees, plus your monthly service charge. If you receive say $620 for sales and your fees are $64+, your income on those sales is approximately $555…see the 10%? When negotiating a rate with processors through your bank, have them identify all the fees that they don’t want to tell you about.

      When I went to my bank to get an explanation and show them the percentage of my sales I was paying in fees, they played dumb. Here I am thinking that I’m dealing with professional people who have my best interest in mind (okay, maybe I’m naive here), only to discover that all they do is give our information to their merchant server and it’s out of their hands. Oh yes, depending on the bank, they also charge $12 for account.

      When I cancelled my processor I was told that I had to pay a $500 early termination fee. I cringe to think about the fees I paid over the course of 18 years, but they wanted an early termination fee. Once we sign on that dotted line, your contract with them is automatically renewed for another year and another and another and another. Your rate with some banks increases with the automatically renewed contract without ever being directly informed. We receive an 8 page notification written in #6 font that usually goes into the trash so that we can get on with the business of work. From April of 2013 until September of 2013, I was charged $25 a month for my terminal to stay open until I called on 9/14 (which was the date that I absolutely had to call in order to avoid the automatic renewal. So in the end I paid $125 to avoid the $500 early cancellation fees.

      I have used Square since April of 2013 and there are no charges anywhere except in an email that notifies me that a transaction has taken place and 2.75% was taken out. I can handle that! Good luck to you, Alex.

  9. kttours360 says:

    Seriously, try They have (in my experience) nice helpful people on the phone when you call. Been around what seems like forever. and a functioning fraud dept. on occasion, my customers payment will be help up for 24 hours or so while the charge is somehow verified AND I’m notified that it is a suspicious charge. Very good service in my mind, I’ve used ’em for about 10 years.

  10. JMN30 says:

    I run an LLC setting up transparent ecommerce solutions (no logging in through paypal). We’ve done 4 last year, and are set to do another handful this year. I don’t know if you can contact me through this post, but I’d like to talk to you about it.

  11. Iulian says:

    Why not use something like ZenCart or WooCommerce with the backend of a well known processor like Authorize.Net? I have used that in the past successfully. Of course, the best part about Square was the on-the-go thing and turning your phone into a CC charge machine…

  12. Sorry to hear about your experience. I’ve heard from family members who work in the credit card industry that they have problems with Square, too. The credit card fraud over Christmas really hit a lot of people hard. At once point, every single card I had was shut off while waiting to be replaced after a fraudulent transaction. It’s enough to make a person operate cash-only!

    Hope your business will be able to recover.

    • Alex Shvartsman says:

      Thank you very much for your concern. While it’s not pleasant to lose that kind of money, the business is not in any sort of significant trouble. We’re exploring ways of moving forward as safely as possible with e-commerce (and yes, I recognize that doesn’t ever mean 100% safe) 🙂

  13. tony says:

    Same problem with square, paypal at least has phone support!

    • Matthew Hunt says:

      very true…I’ve had a few issues and PayPal always sends me an 800#, a ticket number, and will even call me at a specific time if I request…whether I’m the buyer or seller. It takes a bit of hassle, but PP has gotten better than they used to be.

  14. mrgenixus says:

    PayPal did this to me some years back. I’ve come to accept that this is the state of online transactions. I’d consider contacting stripe about how their policy works concerning charge-backs.

    • Myles says:

      My company uses Stripe, and they also pretty much leave you holding the bag just like Square in this case. My guess is that these startups need to stay VERY lean (i.e., minimize overhead) in order to scale up before they burn through their funding. This strategy comes at the expense of merchant support. Luckily my company sells digital goods, so there’s not much business impact with a chargeback. The most annoying part for us was the fact that if the cardholder had simply contacted us after spotting the fraudulent transaction, we would have gladly provided a refund, which costs us nothing extra. Instead, we got hit with a surprise chargeback that carried with it extra processing fees.

      Because of the extra chargeback processing fee that was charged, it seemed like someone along the card processing food chain is incentivized to “resolve” fraud/disputes with chargebacks instead of simple refunds. Definitely a conflict of interest there.– the more fraudulent charges there are, the more of those chargeback fees they rake in. But suspicious fee-based revenue is endemic to the whole banking/credit industry, so what else is new.

      The main takeaway for us was to collect more data when customers place orders (and thereby have additional ways to spot fraud). But when you’re shipping physical goods, you’re probably already collecting way more order data than my company does, so perhaps not the most valuable advice for this blog post.

  15. Liz says:

    Sorry to hear this, Alex. I didn’t see Square on here, but when a company doesn’t want you to contact them, try this site:
    There may be others out there like this that have Square listed so you could at least speak to a real person.

    • azwebcommerce says:


      Saved that link to my bookmarks. Can’t recall the exact number of times I have searched for those numbers in vain.


  16. Malcolm Thomas says:

    I was going to invest in their new IPO coming on the market in 2014.
    Thanks for pointing out a company that has no integrity .
    They are crossed off my list and this will be passed on to my Large investment firms which I am a part.

  17. Kerry says:

    Be cautious when it comes to convience. Sellers and providers need to be aware of risks that could interrupt their business. This being a great example of both. Costly lesson to learn.

  18. Sanjames1 says:

    Fraudsters have become extremely sophisticated and have large networks spanning the globe. Their technique is to make many small purchases to explore the credit limit of the use of the stolen card. Your business was a victim and more than likely several other retailers were victims too. When fraudsters find success with a retailer, they come back to that retailer over and over again, until the retailer puts in place better practices. It would be a good idea to go back and review all online purchases and go ahead and reverse those payments proactively, that look suspicious. Cardholders can initiate disputes up to 180 days and sometime beyond on credit card purchases.

  19. Doug says:

    Sorry you had to find out the hard way. I hear this all the time as businesses grow out of the CC processing model that was originally used for convenience or low cost that has turned into stopping your business and chasing funds. Square or even Paypal comes in handy or makes sense in my opinion when you are brand new before starting your business where you are processing less than $1500 per month or a situation where you need to process CC’s every other month. Sounds like it’s time to get a real merchant account in your companies name and start building your business credit if you’re ready for the next step. We offer similar portals online as well as smart phone accessories that work in the same fashion as Square or Paypal regardless of the smart device.
    Free cost break down with side by side analysis of your last months processing statement & fee’s that you payed using Square. The other side of the cost analysis will show what you would pay processing with Swipe Bancard. If you have any questions please dont hesitate to contact me. Thanks

  20. They Did the same thing to me!!
    I run a home based business It Works Body Wraps, and they have taken my money now the customer has the product and all his money back. I will NEVER recommend this service to anyone!!!

  21. Alex Shvartsman says:

    Thank you very much, everyone, for all the recommendations of various credit card processors.

    To clarify, we do use a traditional credit card processor for in-store transactions, and we’re happy with their service. We used Square specifically for e-commerce, because they created an easy-to-use software to list and sell items online without setting up a complicated shopping cart, any programming knowledge, or any monthly fees, just a reasonable percentage of each transaction.

    I am now working on various possible solutions, but will most likely end up getting a shopping cart installed on the store’s site and using that integrated with PayPal and/or our CC processor.

    There has been other various updates on the Square situation last night and today. I will post a detailed update on the blog when I get home tonight!

  22. Kelly says:

    I just left Square because I had one dispute resulting in a chargeback, but I corrected the situation in less than 24 hours. My client jumped the gun, but nonetheless, it took Square over 1.5 months to return the money (over 1500.00). Their lack of ability to correspond with me was the number one reason, the second being that they took too long to return the money. Myself AND my client were doing all we could to prove she was happy and received her goods, but they went ignored or should I say ’email replies were sent to me that were auto generated.’ Nice job Square. You were easily replaced 🙂

  23. Matthew Hunt says:

    It might be annoying, but I would open two business accounts at two different banks, use one for ONLY e-com, and xfer out $$$ as often as possible into the other account. If you get hit with these chargebacks, at least there isn’t any money for them to take…make sure you have the bank mark the accounts as “no overdrafting allowed”, ie only let $ go out if it’s in there. So if some CC company screws you again…

  24. […] Shvartsman, a science fiction writer and the owner of a small New York City game store, wrote a lengthy blog post accusing mobile payments startup Square of essentially screwing his small business out of thousands […]

  25. […] Shvartsman, a science fiction writer and the owner of a small New York City game store, wrote a lengthy blog post accusing mobile payments startup Square of essentially screwing his small business out of thousands […]

  26. A chargeback like this happened to our little bike shop in CO recently. Here’s the thing: Product has gone out the door and no one has paid for it. That’s called theft, not fraud. Contact your insurance company and file a claim. We did, and it took a couple of months, but a check is in the mail.

  27. – consider moving to us where we have everything you need including real people to service your needs

    Founder / CEO

  28. Tyler Lahti says:

    That’s a nightmare! Thanks for sharing.

  29. Bob says:

    Thank you for sharing your story. As a business owner expanding into the ecommerce side of things and being overwhelmed with all the jargon and pieces needing to be fit together, Square seemed to have a easy to use and understand model I’ll look somewhere else and make sure my customers are aware of how Square handles their relationships with their customers.

  30. […] 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 […]

  31. learningkitty says:

    Very sad to hear this. I would recommend filing a complaint with the BBB. And Chase (payment tech) has a pretty reliable system. I think the rate is the same 3%.

  32. I would go to the BBB and lodge a complaint. The problem is, if the cards were legitimately stolen, then there is zero that anyone can do. If it is the case of some people claiming their accounts were stolen just to get out of paying for the merchandise, that is a different issue. What Square did was fine. 4 chargebacks in a two month period is a lot, but the fact that your store was the target of the thieves is troubliing. Due diligence. Start with BBB to get some kind of remedy for Square, but as for your money back, you are out of it.

    • Sanjames1 says:

      Going to the BBB against Square will not result in any action. Fact is the cardholder’s cards were stolen. Those thieves used those stolen cards to make purchases. Just like if you have a card and someone steals it and uses it. You are only liable for up to $50 of that, as long as, you report it in a timely fashion. Banks are going to reverse those charges so that the cardholder doesn’t have to pay. That is a standard legal protection.

  33. […] Shvartsman, a science fiction writer and the owner of a small New York City game store, wrote a lengthy blog post accusing mobile payments startup Square of essentially screwing his small business out of thousands […]

  34. screwedbypaypal says:

    I’m sorry to hear that you think PayPal will better serve you. We had PayPal pro for 10+ years. Hundreds of thousands in transactions during that time. PayPal pro will pass along bogus transactions. In one case they got us for a total of about $750. Apparently the ccva did not match and they passed it along and marked it OK to ship. They said they were fighting the claim, then on another page it said it was not win able and would not fight it. That customer’s orders were all shipped to the address shown within 24 hours, tracking number with a signature. We lost because we didn’t pay the extra $20 a month for each filter. Another case the customer filed a did not receive claim after a lengthy shipping delay. The claim came it when it was actually enroute to the customer. Even after providing the tracking number we still lost.
    We are getting setup by first data. Better protection and we can set the filters for free. Good luck to you though.

  35. Linkie says:

    This happens everywhere, there are so many people out there who buy items and do chargeback. Have you tried accepting bitcoin as payment??

  36. Justin says:

    Here’s the thing everybody. The article fails to recognize one very simple and standard thing: REAL merchant accounts (unlike PayPal) REQUIRE signature proof of delivery to dispute chargebacks. Delivery confirmation is NOT and will NEVER be accepted by a merchant bank. Merchant banks are NOT PayPal and should not be compared. PayPal is for the little guys, a merchant account is serious business. It is the merchant’s responsibility to prevent fraud and provide signature proof on chargebacks. So what do you do? Make signature requirement standard and allow customers to waive it during checkout by agreeing to terms. This works EVERY time. My business does $100K+ per MONTH and we get about 4 chargebacks per year which we always win. Listen, if you are getting defrauded that means your company is growing – which is a good thing. Wise up and change your practices, move on and make it a lesson learned. I have been in ecommerce 10 years and it is totally possible to do big money and have little to no chargebacks just learn to protect yourself, follow a strict procedure and don’t be GREEDY! Just because someone placed a $1000 order at your site doesn’t mean it is legit, especially if your typical order is $30! You need to learn about the AVS system and how to qualify orders and resolve issues before it EVER gets to the merchant bank.

  37. MSmith says:

    We have had similar issues with PayPal recently – November sales also. Trust me PayPal is not the savior you might think they are.

    My suggestion to you and all other merchants reading this blog is to follow the advise given by screwedbypaypal in the post above.


  38. jrukkus says:

    I had real deal certfiied contracts between my client and I complete with arbitration agreement and what should be done if dispute arose. Additionally.. I had the clients sign off that they were happy when I delivered their website and had included thounsands of dollars worth of extras and extra time.. 6 months later they file the charge back- square goes into my account three times and attempts to withdraw the money which bank of america does not allow them to do. I supplied square with all of the documents and emailed them a million times and heard NOTHING back.. 4 months go by and yesterday i receive an email stating that my square account (which I closed) is owed the amount. I sent them an email telling them never to contact me and that my attorney would be in touch if they persist and I receive the first email from a real person named JOSS back in a year stating that I signed a contact with square and had to pay because regardless of my iron clad contracts with my clients and the signature sign off.. I still loss the chargeback some how.. which is complete bullshit and i assure you they did nothing to help me win and probably never submitted my documents at all. So the last email also said to contact them and they would help me and work out a paymentplan and that they didnt want to have to take any further action.. my question is.. besides the fact that this t this is completely and uterly insane… What can I do to fight square? I will not give them a single red cent but they threatend collections and my cedit… I really cant afford a lawyer either but I dont know what else to do.. any advice would be geeatly appreciated!

    • Alex Shvartsman says:

      Have you tried reaching out directly to your client and trying to get them to drop the chargeback?

      If that isn’t an option, I hate to say this but you may really, really need to speak to an attorney. There are some free services like Legal Aid that you could look into, or just do a search to see which law offices offer pro bono help in your area… But I wouldn’t attempt to deal with this on my own were I in your shoes. Good luck!

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