This Game Store Owner Says Square Screwed Him Over
In July 2013, Shvartsman began using Square to support his store's ecommerce. Then, in November, someone used stolen credit card numbers to place several large orders on his site, and he and his staff shipped $1,800 worth of trading cards to several different addresses. Shvartsman received two "chargeback" notices from Square, totaling nearly $1,200.
What's a chargeback? When a a person notices a charge for something on their bank statement that they didn't purchase, they call their credit card company. That person generally gets their money back right away. The credit card company, however, then contacts the processor (in this case, Square), and so begins a complicated documentation process to determine whether or not the merchant who handled the fraudulent charge should be held responsible. The merchant either gets the money back, or they don't. The process can take a few days or a few weeks.
According to Shvartsman, Square didn't handle the chargeback process well at all. He writes that for each chargeback, he had to fill out a survey with supporting data and documentation about his transactions with the buyers. Meanwhile, Square withdrew the disputed funds from his store's bank account. He writes that he wanted to speak to Square's fraud prevention department to figure out how to best comply with the company's policies to avoid future problems. He couldn't find a phone number, so he sent an email asking about protection from fraudulent charges, saying, "I wanted to make certain that it's safe for us to continue accepting large orders via Square."
He wasn't happy with the response he got from Square, about a week later:
Square pointed him to a help page and an email address.
At that point, Shvartsman recieved another chargeback, raising the total cost to $1,800. He writes:
He continued to use Square to process transactions on his website. Fast-forward to February 2014: In the first week of the month, recieved another chargeback from a transaction that took place back in November. He filled out Square's documentation survey again, and received an email from the company that said:
Shvartsman wrote that it has been nearly 90 days since the initial chargeback and that he has received no updates throughout the process, that the company promised. The total he lost through the chargebacks was $2,300, but he said that it will cost him more in business, because his website no longer gives would-be customers a way to make purchases while he scrambles to get PayPal installed (to replace Square).
He writes:
Business Insider reached out to Square about its chargeback policies. Here's what we got from a Square spokesperson:
Check out Alex Shvartsman's full blog post here. We will update the post when we hear back from Shvartsman tonight.