Fair and Square


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.


11 Responses to Fair and Square

  1. Joe McInally says:

    Excellent news Alex! You’ve conducted yourself impeccably in this situation.


  2. […] last night, he posted a follow-up revealing that Square ended up reimbursing him $2,280.78, the total amount that he had […]

  3. I Do says:

    I appreciate your sharing all of this with “us” out here. I’ve used Square for about two years and did have problems when they held my money for two weeks because it exceeded their arbitrary maximum amount. When I pointed out that they stood to make $xx from me by allowing me to process transactions they upped my allowable weekly amount. Obviously holding funds for two weeks or more isn’t going to work for anyone.
    I agree their decisions to respond/not respond, restrict/release and then utter lack of transparency regarding their fraud resolution process is pretty sketchy. I will be shopping for a different way to process my credit cards, starting today. Maybe my local bank, or intuit…. Paypal isn’t appropriate in my case. It’s too bad because Square is mighty convenient.

  4. Widdershins says:

    I guess it’s true, we do indeed live in interesting times! 😀

  5. Fraser says:

    Integrate Dogecoin via Doge API – Perfect option for your business Alex

  6. I had my own nightmare (not as bad as yours) scenario with Intuit GoPayment and American Express. Luckily they had some customer support so I was able to learn how to avoid it in the future but they blew me out of the water processing AMEX on multiple merchant services accounts without any notice. Took me 3 weeks to reopen an account and I’ve been processing AMEX cards for 25+ years! Best of luck to you.

  7. The one thing that kept me from using Square was that there was no way to reach a live customer service rep. A fellow client of mine was using Square and had a case very similar to yours. She did manage to get her $700 back, but it took nearly a month to do so. We personally use PayPal for our business and anytime I have ever had any sort of issues, a live customer service rep got it straightened out either during the phone call or within 24 hours.

  8. James Beamon says:

    I’ve been following this saga as it unfolded in my inbox and I’m thrilled you got your loot back. I gotta say, I’m fascinated by the ethics as well… but not necessarily the question of fairness. I mean, you went from having zero customer support to getting chased down by members of their mythical Customer Support Team. If nothing else, it seems Square recognized the power inherent in your story, a story told and retold and reinforced because of social media. I’m convinced they weren’t reimbursing you because it was the “fair” thing to do so much as they were paying to nullify a story that shows their jacked up business practices… anti-advertisement dollars if you will.

    It seems on the Internet, everyone knows you’re an underdog. Out here, with corporations pulling moves like this, we’re all underdogs. Luckily there’s strength in the pack.

  9. Great lesson in the power of social media.
    So happy to read about this outcome and YAY for the underdog!

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