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My Recent Experience With Square

sumang 14y ago
I really like Square, but I always have this feeling that this company is going to be oe more paypal and with this story it´s confirmed. Hope they solve this issue and improve their customer service .
- mrsteveman1 14y ago
  As much as I like to hate on Paypal because they deserve it for a variety of reasons, I'm considering lately that for financial services startups like this, it's possible they CAN'T do certain things differently, though perhaps customer service could make up for it and may not have in this case. This phrase caught my eye in the story "Per the network regulations, the debit process is automated and will continue to attempt to hold the funds associated with the dispute until it is resolved.". Network regulations like the contracts they have with banks? Credit card processors? A relatively small startup may or may not be in a position to negotiate their own terms on such things, they're dealing with established players they have to do business with unlike a lot of other startups in other fields. Perhaps Squares own terms have been influenced or dictated to them in part by their own financial partners. On the other hand, this persons own bank was able to reverse the automated charge and the fees associated with it, which itself should give at least some measure of comfort in the system as it exists, even if it's frustrating to watch it all happen without much direct control. It should probably be obvious that having a buffer of funds to handle things like this is a good idea for any business, particularly if the terms of service for the payment processor note that things like this may happen.
  - pm24601 14y ago
    Absolutely square could do things better. How about for starters picking up the goddamn phone and making a call to talk to the customer in person? It really shocks me that people are willing to entrust their business's finances with a company they cannot contact immediately. I do exactly what the OP poster did - have a account that receives the funds and is immediately swept to an entirely different institution. I would not have even funded the account when square tried to pull from it. I do not make my main business account directly accessible via visa card, or direct transfers. Two different financial institutions are involved. I especially am troubled by the assumption that because the OP is following this very good idea that square assumes that he is not viable.
    - TylerE 14y ago
      Low fees. High quality customer support. Pick one. You can't have it both ways.
    - delinquentme 14y ago
      Hate to break it to you but a pissy customer whos mad over $175 bucks only thinks hes a priority when it comes to square. Seriously how much cash are they transacting ... and hes flipping out over ( as pointed out earlier ) $180 profit for square? yeahh....
      - smackfu 14y ago
        If Square only cares about the big customers, why would small customers use them?
        delinquentme 14y ago
        welcome to automation. Its designed to work for the big guys. So there you go free motivation. If you want to be able to complain and stomp around like old ways of doing business you've got to get big. Otherwise you use the service that is provided.
    - pm24601 14y ago
      Tyler, that kind of lets all sort of bad behavior off the hook doesn't it? I rather like the high quality, low cost support I get from https://www.techcu.com/ https://www.techcu.com/ myself.
    - pm24601 14y ago
      @delinquentme - sure. Except how many people will look longer at square's competitors now? I certainly am now reluctant to use them.
    - Czarnian 14y ago
      Except it's not a very good idea. It's actually a very poor business practice. Dude's got no one else but himself to blame. If he's taking credit card transactions, he should be holding a reserve in the relevant account for exactly this sort of situation. His lack of foresight is the root cause of the entire mess. As the saying goes, "Lack of planning on your part does not constitute an emergency on my part."
- chpolk 14y ago
  I agree, I created an account whenever Square had first come out and for whatever reason my identification could never be verified allowing me to not be able to use Square. After an email to customer service, I was told "If we believe we erred in our assessment, we will reach back out and contact you", to basically say that my ID couldn't be verified and it would be that way into the extended future unless Square changed their minds. I understand things need to be safe and secure but at least ask for some other form of verification for my ID before telling me that I just can't use your service.
parfe 14y ago
I'm not sure why this guy had trouble understanding that he needed money in his account as collateral against the charge back. "Yeah, he'll probably send us the money if the charge back is upheld" is not a sustainable policy.
- pm24601 14y ago
  I'm not sure why you think it is a good idea to let random outside parties dip into his business's working capital? Ooops sorry about withdrawing $10,000 instead of $100. What's a decimal place among friends? Hope you can still make that tax payment and payroll while we futzy around on our end.
  - parfe 14y ago
    Except it isn't a random outside party. It's his credit card processor and it wasn't a random amount, it was the specific amount under dispute.
    - pm24601 14y ago
      Yes. A credit card processor that said they wouldn't act while he was disputing a charge --- but oops did. A credit card processor that makes it hard to contact them. A credit card processor that cannot be bothered to pick up the phone and call the customer. Might as well be random.
  - PeterisP 14y ago
    The alternative isn't "not dipping in working capital", the alternative is "freezing all received funds for a month, all the time". Chargebacks happen; and you shouldn't expect that you will get paid for 100% of your sales. Deal with it or don't accept credit cards - the rules of the credit card game favor the cardholder a lot, that's why customers want to use their cards.
    - guan 14y ago
      The policy is clear, and based on other comments here probably mandated by the payment networks, but that doesn’t mean it’s reasonable. It’s perfectly reasonable to expect merchants to be prepared for chargebacks and have a buffer for that. It would be reasonable to have a few days’ notice to pay the money, or be able to designate a different account for them to debit the amount from, or submit a credit card that Square can draw from as security. But if you are expected to have a month’s sales in the Square-linked bank account all the time, how is that different from simply “freezing all received funds for a month, all the time”?
admg 14y ago
It baffles me how any financial services company can afford to have such poor customer service.
bmj1 14y ago
I have to disagree (perhaps unfashionably) with the author's sentiment and the comment below "I really like Square, but I always have this feeling that this company is going to be oe (sic) more paypal and with this story it´s confirmed." - The customer service was pretty responsive and reasonably polite for a very fast growing company. - The author notes he has paid Square hundreds of dollars in transactions fees so we can guestimate he's done $13k+ of revenue through Square (based on $400 fees & 3% average fee), $180 was hardly a critical amount for him - What's the next best alternative, has anybody here experienced PayPal's customer service?
- inuhj 14y ago
  'PayPal' and 'customer service' should never be in the same sentence together.
  - dkrich 14y ago
    Heh, I called up once for help with the sandbox and the CSR told me that I was mistaken- there is no sandbox or any way to test transactions on the site. They must have a very rigorous training program there.
- Jacob4u2 14y ago
  I don't believe the customer service was polite. They shouldn't scold the person right up front about multiple emails; maybe it's just me, but the customer pays you, they can send as many emails as they want. Also, it's confusing that he is told to respond to the first email (and that it's time sensitive) and yet they do not respond to his prompt reply.
  - webwright 14y ago
    " maybe it's just me, but the customer pays you, they can send as many emails as they want" It's just you. Emails for a company at this scale enter a ticket queue, not somebody's inbox. Adding more tickets for the same issue impedes the company's ability to help other customers and doesn't get you help any faster. They didn't scold him. They told him facts-- that it didn't help anything and that the system (i.e. the software) might flag him as a spam if he hammered on it too hard. Regarding the core issue-- they have a stated policy on chargebacks. It isn't "guilty until proven innocent", it's "Square gets to hold the money in question until it's sorted out-- and when you set up your account, you connect an account and authorize us to debit $ to cover a negative balance". This is just how chargebacks work. It's somewhat dictated by the credit card companies-- I'm not sure Square has much flexibility to have a different policy even if it made sense to do so (IMO, their policy is perfectly reasonable).
leejw00t354 14y ago
I think Square could have tried to be more understanding of this use case. He did clearly explain that the linked account didn't keep a balance and that he was willing to pay the negative balance in his Square account with other sources. I don't see this as shockingly poor customer service, but Square should have just disabled the automatic debiting on his account as he was a long time trust worthy customer.
- aneth 14y ago
  Square was out the funds immediately. Jason could have avoided fees by funding his account the same day, or by simply keeping some reasonable amount in the account for potential chargebacks. Square should not be required to keep a person on call to handle special cases like this or to ask merchants nicely for funds for every chargeback to an unfunded Square account. Automated ECH transfer from a linked account is fair and efficient, and once it is initiated can't be stopped.
- eridius 14y ago
  Trustworthy? Jason already demonstrated he is not trustworthy, since he failed to keep the necessary amount of funds in his linked account to cover any chargebacks that may occur. He screwed up, and he expected Square to pay for it.
noonespecial 14y ago
It just goes to show that even with Square, charge-backs suck. People are going to look you right in the eye and steal from you. Its a business reality. The company that addresses this problem in the most painless way possible is going to win. We can thank payapl for demonstrating the worst way to handle it. The moral: be as least paypal like as possible. I don't think its possible to cure the charge-back. As a merchant, you're going to lose out. That just seems to be how it works. The win will come from making the process as clear and painless as possible. Automatic systems that keep overdrafting your bank while sending you robo-responses are not they way.
- dsterry 14y ago
  Well there is Bitcoin which has no chargebacks and for a face-to-face transaction there would be little need for an addon escrow service.
adgar 14y ago
I get nauseous when I see companies with 200 some-odd employees respond to a distressed individual with PR-drafted form letter ad libs. I can't wait to see what they do when they have 2,000 employees.
Navarr 14y ago
I read over this and all I can think is that OP didn't do what he should've. Their process of pulling in funds when you have a negative balance is automated. (check) He said he'd fund it from another source, but as far as I read (got really bored about halfway through) He didn't. So the automated process pulled in money from his linked account, as expected. This money was crucial because square has to be able to refund the chargeback should it end in the customer's favor. I don't understand OP's problem with Square. They handled this as best as they possibly could?
- RandallBrown 14y ago
  No, he told them he would fund it from elsewhere and they didn't respond to that at all. They told him that the issue could be considered closed. Then, later they tried to withdraw money again (after saying the issue was closed). Square took days to respond, then complained to him that emailing them more would get him marked as spam.
  - Navarr 14y ago
    Something that should've been incredibly clear here is that square required money be available as backup in the event that there was a disputed claim. SAYING that you'll fund it from elsewhere is not the same as doing so. And they said that the issue was "preliminarily closed." Followed up with Your funds are eligible for automated release on or around 30 April 2012 once additional confirmation is secured. That in no way implies that he doesn't have to have backup. It clearly states the process is ongoing. This is a long and painful process, and its OP's fault for not having a system in place for when this inevitably occurs. He should have had back up money for such an occurance and didn't. That's his fault. Finishing reading, there is that troublesome bit at the end about them not releasing his money as quickly as they should've - but all in all they did a damn good job considering their industry and their opponents. I find myself agreeing with the two comments that are now on the OP's page.
- pbreit 14y ago
  > They handled this as best as they possibly could? I disagree. Square handled it in a manner similar to waht we've come to expect from, say, PayPal. But I think many of us were expecting Square to be better than that. The tone of the support staff was unsympathetic, responses took too long, the reply about sending in multiple inquiries was obnoxious, there was an over-reliance on links to terms of service, funds recovery seemed over-aggressive considering the customer's legitimacy.
jseims 14y ago
What surprises me is Square doesn't hold a rolling percentage of transactions in reserve in case of charge backs. Seems like that would avoid this situation.
- deleted 14y ago
  [deleted]
staunch 14y ago
I would have just let them hold the money until the chargeback was settled. Who wouldn't? This customer was acting like an entitled brat for no reason.
aneth 14y ago
I have to land squarely on Square's side on this one. As far as I can tell, Square has handled this matter exactly as I would expect and hope. They communicated professionally and clearly with Jason. Jason responded with empty threats and demands, and clearly does not understand or respect his responsibilities in his business relationship. Getting money quickly from a merchant account is a privilege, not a right. That privilege is afforded in exchange for honoring the chargeback process, which for good reason initially favors the consumer by provisionally reversing the transaction. When a chargeback occurs - as clearly stated in Square's initial email - "The respective financial institution notifies Square and debits the funds from Square." Chargebacks are not fun, but they are a fact of life. When a consumer challenges are credit card charge, the consumer is entitled by law and contract to have their case heard, and in the meantime the middlemen must make sure they won't be left holding the empty moneybag. It is entirely reasonable for the Square to make sure funds are available to pay the consumer debt should the consumer prevail - Square will be out that money regardless of whether Jason pays up. To be frank, based on his attitude, Jason seems like the sort of guy who would refuse to pay up if the dispute had been decided against him and he disagreed with the determination. This is exactly the reason Square was and always will be justified in freezing the amount associated with any chargebacks. There is a process for handling chargebacks that you submit your self to in exchange for the convenience of getting money quickly from the credit card system. That money is only yours if the consumer does not challenge the charge - usually they don't, but you are responsible to pay if they do, and you are responsible for funding your account to cover whatever level of chargebacks your business sustains. It is entirely reasonable for: 1) Square to freeze funds associated with chargeback attempts. At this point, Square is out those funds. 2) Square to withdraw funds from a link account if the Square account is empty. It's the responsibility of the merchant to keep funds available to handle chargebacks, as I'm sure is clearly stated in their agreement. If the merchant has kept all funds out of reach of Square, by withdrawing all their money from the account and keeping the associated bank account empty, the merchant is indicating that they do not intend on fulfilling their end of the bargain on having a merchant account - namely honoring chargebacks and the determination process for chargeback disputes. If this withdraw results in NSF fees, particularly for a chargeback of such a small amount, that is the merchant's fault for not funding their account. Furthermore, NSF fees are easily avoidable by depositing funds the same day - why Jason did an electronic transfer is beyond me. Based on Jason's ignorance of his own responsibilities, his refusal to keep money available to handle chargebacks, his empty and immature threats to "go to the press" among other things, and his general disregard for his role in the business relationship, I would expect Square probably wants to terminate his account, but will decide against that as it would be more bad PR than it's worth. They would be justified, however, holding funds for a longer period of time, since it's clear he refuses to keep funds available to handle chargebacks and to honor the largely fair chargeback process. The only counter point I can think of is that, for a certain chargeback/total charge ratio, it does seem Square could take the risk and absorb any funds deficit. That is not traditionally how things work though, and since Square is doing their best to get merchants paid as quickly as possible, it only seems fair that merchants would do their best to ensure Square they intend to honor their end of the bargain. If Square did take on this risk for small chargeback amounts for merchants in good standing (say < 3% of total charges,) this would delay someone like Jason's understanding of the chargeback process until a real problem occurred - like a large number of customers demanding refunds. That might ultimately hurt Square more than it helps, both financially and in PR.
sauravc 14y ago
The author doesn't have a grounded view of the credit card chargeback process. Square seems to be pretty well behaved despite his whining.
RandallBrown 14y ago
Here's what should have happened. Square: There's a chargeback for 180 dollars. You can dispute it. OP: I want to dispute it. Here's the information you need. (no more than one day later) Square: Instead of just linking to our legal agreement we'll explain why we're taking money from your account. We have to withdraw the chargeback amount from your account because of regulations and stuff. There is more information at this legal link. OP: I keep that account empty to prevent fraud. The transaction will fail or I'll end up being charged. Can I pay it from another account or can you wait? (no more than one day later) Square: (if possible) Yes you can pay here (link to payment site). We will automatically try your account in a few days. You will here from us when we've decided on your dispute. OP: Ok, here is my payment (or) funds will be in my bank account shortly. (later on, after dispute is decided) Square:We ruled in your favor, the money is being debited back to your account. It will be available for withdrawal in a few business days.
- phillco 14y ago
  Verification of a new account would take up to 5 business days, so it would be no faster than sending an ACH for the money.
  - pbreit 14y ago
    What are you referring to?
    - phillco 14y ago
      When you link your bank account with Square, they have to send test deposits first to verify that it is indeed yours. These take up to 5 days, plus the time after that to actually transfer the overdrawn money. Asking Square to take the money from another account would be no faster than moving it yourself to your primary one, because of this verification stage. Even if you had the foresight to link it ahead of time, Square only supports being associated with one account at a time.
- jasonlotito 14y ago
  No. This screams of willing ignorance. You are dealing with money. Your customers money. You should have just a bit of respect to understand the agreements you are signing when dealing with your customers money. Damn right you should understand the T&C BEFORE using the service like this. Doing otherwise is damn right irresponsible and shoddy. The people running into these problems have no idea what they are doing, they haven't dealt with real processing, and are blaming everything everyone but themselves. Hell, even your comment is ignorant of the system that the customer agreed to use. Guess what? Credit card users have certain rights, and if you want to accept credit cards, you have to play within those rules. This means chargebacks happen. This means you don't get paid. There are ways to reduce it, but you are still on the hook for it. Hell, even if the chargeback gets reversed, it's still held against you. A shining example of this ignorant is right here: > Square:We ruled in your favor, That's not how chargebacks work. Square doesn't rule in any capacity. It's the banks. It's the client bank. Not Square. Not the merchant. Every time a story like this pops up, we get a whole bunch of fools complaining and making reference to PayPal, and not a one of them has any clue as to the realities and reasons why. And yes, I've done this. I've read the documents, and handled this. And it's always the same story. People whining about the company they deal with, when the reality is, the policy is in place to protect their customer.
gravitronic 14y ago
Sounds like Square has generic customer service reps handling the incoming queue of service requests item by item. Would it have a better result in terms of responsiveness if each new case was handled by a single CS rep until completed so that every response to an issue does not have to pass the entire queue before being dealt with? Or would that increase net response time?
- sirclueless 14y ago
  It's a well-known fact that CS requests have a really high abandonment rate. It saves a lot of money to hold off on answering requests for as long as possible, because it weeds out the non-urgent requests, and makes people loath to create more. If every request takes at least 24 hours, then a sizeable segment of the population will give up trying unless something really big comes up. Responding quickly sends the wrong signal that CS reps are an effective way to solve issues and your volume will probably shoot way up.
debacle 14y ago
Throughout the entire exchange, Square is relatively prompt and incredibly informative and professional. This guy doesn't know how electronic payments work, and has clearly never had to deal with managing a merchant account before.
- rhizome 14y ago
  He also didn't mention anything about hearing back on his inquiry to his customer company. Maybe only Square has to reply promptly?
- bosch 14y ago
  Irrespective of if the author was correct in his use of the service, how is not replying for days prompt and how is tersely worded e-mails informative and professional? The whole thing reminded me of PayPal.
  - debacle 14y ago
    When the author states something like "give me my money or I'm going to the press," he loses all good will I might have towards him.
  - eridius 14y ago
    What do you mean? Re-reading the post, Square always responded by the next business day. There was no "days" wait here. The only confusion was the OP tried to make it sound worse by saying "over 24 hours", but all that means is Square emailed him in the morning on one day, and on the afternoon on the next day. This part is also weird. He received a reply dated April 20th. He then says "the next morning" he received another email about the withdrawn funds, and he replied. Except his reply is dated the 24th. I have no idea what to think about this. Deliberate misrepresentation of facts? A bit later on we do finally see a multi-day gap in Square's responses, where he emailed them on the 25th and Square replied on the 30th. However, Jason's email didn't actually contain any questions or actionable statements, only complaints and accusations of "thinly veiled threats". So I don't see the response gap here as being significant.
benatkin 14y ago
Glad Square isn't wasting money (or time, or attention) on people who are misusing it so badly. Square is well-funded but that isn't what funding is for.
- bosch 14y ago
  Don't you think this is an awesome opportunity for Square to explain to the author how charge backs work and why he should have money in his account? Perhaps if they used something other than cryptic replies they could help him understand the entire process and help make him even more of a Square advocate than he was before? That would be a HUGE differentiator from PayPal. I would definitely say funding is for increasing customer service and trying to create as many advocates of your service as possible!
jsavimbi 14y ago
Man get all wacky about $175 transaction. IF you're playing that close to the bone, my advice would be to stick to cash sales and forget about banks and online escrow services like Square.
FuzzyDunlop 14y ago
The problem here isn't necessarily with Square, but with Jason being very quick to play the 'taking further action' card. Being irate and confrontational gets you absolutely nowhere, and I would never say Jason's exchange was an exemplary case of dealing with an unexpected situation professionally, and with a cool head. Having spent 7 years in customer service, I'd encounter such attitudes all the time. It achieves nothing, except to piss off the person you're mouthing off to.
twunde 14y ago
There are a few issues with this article 1) The author never understood that he has to keep some sort of balance to cover chargebacks. Square may need to better communicate this since they are targeting people who may have never dealt with credit card processors. The automated chargebacks themselves may be regulated by the government and if not are standard practice to prevent fraud. 2) Square needs to upgrade its customer service division. The division is obviously not able to respond in a timely manner at this moment. The first thing they should do is change their policy to reflect that it's more likely to be 24-48 hours before a response. Their response was factual and ok for a big bank. However since Square promised to be different they should be aspiring to be like Charles Schwaub's credit card service where you can get someone on the phone at any hour and have them explain what's going on and why and what you can do about it. That's the kind of service that most people who use Square expect and should get. And specifically they should be available by telephone.
rglover 14y ago
I didn't bother finishing this because the author persistently claims the Square reps have a rude tone when quite the opposite is taking place. This email stood out for me: For the record I have never received such "guilty until proven innocent" treatment from a company before and until now have sung the praises of square and happily paid the fees associated with your service. If this issue is not resolved immediately (today, 04/19/2012) I will no longer use or recommend Square and will close my account as soon as this situation has come to an end. I will also attempt to submit this request to your "support" system if I can figure out how to find a contact email address there. Your prompt response is appreciated, Jason J. Gullickson Nothing in the initial correspondence from Square prompted an acerbic response. It sounds like the author felt threatened even though nothing really happened. Sort of confused why you'd have a bank account with no money in it when you're actively running transactions. Chargebacks, fees, and other miscellaneous activity are par for the course. Be prepared. It's not Square's fault.
- rralian 14y ago
  If you would have finished it, you would have found that Square's service was professional throughout. They never treat him as if he is "guilty until proven innocent". The rep just tries to explain to him why repeatedly sending emails will actually make their response take longer, and it's reasonable. She could have used the passive voice in her explanation, "when someone [blah blah] they will naturally inhibit", which would be harder to read as hostile. But that's a pretty subtle point that I don't think can be expected for someone who is likely judged on responses/hour and messages in queue. Plus, he was being pretty hostile leading up to this, so I think her response shows poise. These reps are humans after all, and they deal with irate and unreasonable people all the time.
nwenzel 14y ago
Seems like both sides just needed to understand that there's a person at the other end of the email / support form. None of those emails really sounded like a person talking to another person. Imagine those notes as a transcript of an in person conversation rather than emails. Sounds like Square can take care of their core business with decent competency, but as with many young companies, they may not have all the kinks worked out when something gets outside their normal decision tree.
jakejake 14y ago
We all love retailers who have very low friction in order to let us buy things without hassles, one click, etc. And when you create your home business using a convenient service like Square of course you also want to offer this no-hassle payment service to your customers. But what many people don't realize that these businesses also often are eating chargebacks - considering them a necessary part of business in order - to offer the low friction purchasing. When you're an individual and a $175 chargeback stings your checkbook (as it would for many of us) then it sucks to have to learn this lesson the hard way. I will say at least with standard merchant accounts when a chargeback occurs the bank will often get you and the customer on the phone together to figure out the problem. It usually reverses most chargebacks. Many times it's simply a mistake because the customer didn't recognize the charge. If Square is not doing something like this then you probably are taking on a lot more risk using their service compared to a traditional merchant account.
jasongullickson 14y ago
This is simply a precautionary tale; if you don't mind being treated this way, by all means continue using Square. I didn't, and I was unable to resolve the situation by working with Square, so I shared my experience, warts and all, with others in the hope that others can learn from my experience. Could I have been more eloquent and professional? Certainly. But this is something I was dealing with in my "spare" time, (and for the record, as donated time and a favor to a nonprofit). If this was a business venture it would have been handled much differently, but I don't think Square is exclusively for serious business use (at least that's not what I get from their marketing). So please feel free to criticize my actions; had I ran across a similar story myself before I found myself in this situation, it might have turned out better, so I feel it is worth taking a few shots if it helps someone else down the road. Keep on hackin' Jason
koeselitz 14y ago
I'm of two minds on this; I think maybe Jason could have understood how chargebacks work a little better - but at the same time, I think Square could probably streamline this process. Most of all, this bit of one of the emails from Square kind of set off alarms in my head as bad practice: "It is our pleasure to inform you that this inquiry has been preliminarily closed in your favor. While this is promising, it is also conditional. Your funds are eligible for automated release on or around 30 April 2012 once additional confirmation is secured." I don't think "preliminary closure" of a chargeback even makes sense, does it? Either it's closed or it's not closed. I understand that they might have various steps in the inquiry, but letting the customer know ahead of time that everything is probably going to work out well for them, apparently in order to soothe them, is setting the situation up very badly in cases where the preliminary positive resolution doesn't actually get confirmation later on. What's more, it's clear that this didn't even set the correct expectation in the event of a positive finding. They named a date, and then promptly failed to meet it. If I were designing a system to do this, it seems like it would be best just to let the customer know you're inquiring, that it may be a few weeks, and that they must keep a certain amount of money in their account until the inquiry is over. (Obviously I haven't designed such a system, and I know it's difficult. This approach just seems inevitably problematic to me, though.)

I really like Square, but I always have this feeling that this company is going to be oe more paypal and with this story it´s confirmed. Hope they solve this issue and improve their customer service .

mrsteveman1 14y ago
As much as I like to hate on Paypal because they deserve it for a variety of reasons, I'm considering lately that for financial services startups like this, it's possible they CAN'T do certain things differently, though perhaps customer service could make up for it and may not have in this case. This phrase caught my eye in the story "Per the network regulations, the debit process is automated and will continue to attempt to hold the funds associated with the dispute until it is resolved.". Network regulations like the contracts they have with banks? Credit card processors? A relatively small startup may or may not be in a position to negotiate their own terms on such things, they're dealing with established players they have to do business with unlike a lot of other startups in other fields. Perhaps Squares own terms have been influenced or dictated to them in part by their own financial partners. On the other hand, this persons own bank was able to reverse the automated charge and the fees associated with it, which itself should give at least some measure of comfort in the system as it exists, even if it's frustrating to watch it all happen without much direct control. It should probably be obvious that having a buffer of funds to handle things like this is a good idea for any business, particularly if the terms of service for the payment processor note that things like this may happen.
- pm24601 14y ago
  Absolutely square could do things better. How about for starters picking up the goddamn phone and making a call to talk to the customer in person? It really shocks me that people are willing to entrust their business's finances with a company they cannot contact immediately. I do exactly what the OP poster did - have a account that receives the funds and is immediately swept to an entirely different institution. I would not have even funded the account when square tried to pull from it. I do not make my main business account directly accessible via visa card, or direct transfers. Two different financial institutions are involved. I especially am troubled by the assumption that because the OP is following this very good idea that square assumes that he is not viable.
  - TylerE 14y ago
    Low fees. High quality customer support. Pick one. You can't have it both ways.
  - delinquentme 14y ago
    Hate to break it to you but a pissy customer whos mad over $175 bucks only thinks hes a priority when it comes to square. Seriously how much cash are they transacting ... and hes flipping out over ( as pointed out earlier ) $180 profit for square? yeahh....
    - smackfu 14y ago
      If Square only cares about the big customers, why would small customers use them?
      - delinquentme 14y ago
        welcome to automation. Its designed to work for the big guys. So there you go free motivation. If you want to be able to complain and stomp around like old ways of doing business you've got to get big. Otherwise you use the service that is provided.
  - pm24601 14y ago
    Tyler, that kind of lets all sort of bad behavior off the hook doesn't it? I rather like the high quality, low cost support I get from https://www.techcu.com/ https://www.techcu.com/ myself.
  - pm24601 14y ago
    @delinquentme - sure. Except how many people will look longer at square's competitors now? I certainly am now reluctant to use them.
  - Czarnian 14y ago
    Except it's not a very good idea. It's actually a very poor business practice. Dude's got no one else but himself to blame. If he's taking credit card transactions, he should be holding a reserve in the relevant account for exactly this sort of situation. His lack of foresight is the root cause of the entire mess. As the saying goes, "Lack of planning on your part does not constitute an emergency on my part."
chpolk 14y ago
I agree, I created an account whenever Square had first come out and for whatever reason my identification could never be verified allowing me to not be able to use Square. After an email to customer service, I was told "If we believe we erred in our assessment, we will reach back out and contact you", to basically say that my ID couldn't be verified and it would be that way into the extended future unless Square changed their minds. I understand things need to be safe and secure but at least ask for some other form of verification for my ID before telling me that I just can't use your service.

parfe 14y ago

I'm not sure why this guy had trouble understanding that he needed money in his account as collateral against the charge back. "Yeah, he'll probably send us the money if the charge back is upheld" is not a sustainable policy.

pm24601 14y ago
I'm not sure why you think it is a good idea to let random outside parties dip into his business's working capital? Ooops sorry about withdrawing $10,000 instead of $100. What's a decimal place among friends? Hope you can still make that tax payment and payroll while we futzy around on our end.
- parfe 14y ago
  Except it isn't a random outside party. It's his credit card processor and it wasn't a random amount, it was the specific amount under dispute.
  - pm24601 14y ago
    Yes. A credit card processor that said they wouldn't act while he was disputing a charge --- but oops did. A credit card processor that makes it hard to contact them. A credit card processor that cannot be bothered to pick up the phone and call the customer. Might as well be random.
- PeterisP 14y ago
  The alternative isn't "not dipping in working capital", the alternative is "freezing all received funds for a month, all the time". Chargebacks happen; and you shouldn't expect that you will get paid for 100% of your sales. Deal with it or don't accept credit cards - the rules of the credit card game favor the cardholder a lot, that's why customers want to use their cards.
  - guan 14y ago
    The policy is clear, and based on other comments here probably mandated by the payment networks, but that doesn’t mean it’s reasonable. It’s perfectly reasonable to expect merchants to be prepared for chargebacks and have a buffer for that. It would be reasonable to have a few days’ notice to pay the money, or be able to designate a different account for them to debit the amount from, or submit a credit card that Square can draw from as security. But if you are expected to have a month’s sales in the Square-linked bank account all the time, how is that different from simply “freezing all received funds for a month, all the time”?

admg 14y ago

It baffles me how any financial services company can afford to have such poor customer service.

bmj1 14y ago

I have to disagree (perhaps unfashionably) with the author's sentiment and the comment below "I really like Square, but I always have this feeling that this company is going to be oe (sic) more paypal and with this story it´s confirmed." - The customer service was pretty responsive and reasonably polite for a very fast growing company. - The author notes he has paid Square hundreds of dollars in transactions fees so we can guestimate he's done $13k+ of revenue through Square (based on $400 fees & 3% average fee), $180 was hardly a critical amount for him - What's the next best alternative, has anybody here experienced PayPal's customer service?

inuhj 14y ago
'PayPal' and 'customer service' should never be in the same sentence together.
- dkrich 14y ago
  Heh, I called up once for help with the sandbox and the CSR told me that I was mistaken- there is no sandbox or any way to test transactions on the site. They must have a very rigorous training program there.
Jacob4u2 14y ago
I don't believe the customer service was polite. They shouldn't scold the person right up front about multiple emails; maybe it's just me, but the customer pays you, they can send as many emails as they want. Also, it's confusing that he is told to respond to the first email (and that it's time sensitive) and yet they do not respond to his prompt reply.
- webwright 14y ago
  " maybe it's just me, but the customer pays you, they can send as many emails as they want" It's just you. Emails for a company at this scale enter a ticket queue, not somebody's inbox. Adding more tickets for the same issue impedes the company's ability to help other customers and doesn't get you help any faster. They didn't scold him. They told him facts-- that it didn't help anything and that the system (i.e. the software) might flag him as a spam if he hammered on it too hard. Regarding the core issue-- they have a stated policy on chargebacks. It isn't "guilty until proven innocent", it's "Square gets to hold the money in question until it's sorted out-- and when you set up your account, you connect an account and authorize us to debit $ to cover a negative balance". This is just how chargebacks work. It's somewhat dictated by the credit card companies-- I'm not sure Square has much flexibility to have a different policy even if it made sense to do so (IMO, their policy is perfectly reasonable).

leejw00t354 14y ago

I think Square could have tried to be more understanding of this use case. He did clearly explain that the linked account didn't keep a balance and that he was willing to pay the negative balance in his Square account with other sources. I don't see this as shockingly poor customer service, but Square should have just disabled the automatic debiting on his account as he was a long time trust worthy customer.

aneth 14y ago
Square was out the funds immediately. Jason could have avoided fees by funding his account the same day, or by simply keeping some reasonable amount in the account for potential chargebacks. Square should not be required to keep a person on call to handle special cases like this or to ask merchants nicely for funds for every chargeback to an unfunded Square account. Automated ECH transfer from a linked account is fair and efficient, and once it is initiated can't be stopped.
eridius 14y ago
Trustworthy? Jason already demonstrated he is not trustworthy, since he failed to keep the necessary amount of funds in his linked account to cover any chargebacks that may occur. He screwed up, and he expected Square to pay for it.

noonespecial 14y ago

It just goes to show that even with Square, charge-backs suck. People are going to look you right in the eye and steal from you. Its a business reality. The company that addresses this problem in the most painless way possible is going to win. We can thank payapl for demonstrating the worst way to handle it. The moral: be as least paypal like as possible. I don't think its possible to cure the charge-back. As a merchant, you're going to lose out. That just seems to be how it works. The win will come from making the process as clear and painless as possible. Automatic systems that keep overdrafting your bank while sending you robo-responses are not they way.

dsterry 14y ago
Well there is Bitcoin which has no chargebacks and for a face-to-face transaction there would be little need for an addon escrow service.

adgar 14y ago

I get nauseous when I see companies with 200 some-odd employees respond to a distressed individual with PR-drafted form letter ad libs. I can't wait to see what they do when they have 2,000 employees.

Navarr 14y ago

I read over this and all I can think is that OP didn't do what he should've. Their process of pulling in funds when you have a negative balance is automated. (check) He said he'd fund it from another source, but as far as I read (got really bored about halfway through) He didn't. So the automated process pulled in money from his linked account, as expected. This money was crucial because square has to be able to refund the chargeback should it end in the customer's favor. I don't understand OP's problem with Square. They handled this as best as they possibly could?

RandallBrown 14y ago
No, he told them he would fund it from elsewhere and they didn't respond to that at all. They told him that the issue could be considered closed. Then, later they tried to withdraw money again (after saying the issue was closed). Square took days to respond, then complained to him that emailing them more would get him marked as spam.
- Navarr 14y ago
  Something that should've been incredibly clear here is that square required money be available as backup in the event that there was a disputed claim. SAYING that you'll fund it from elsewhere is not the same as doing so. And they said that the issue was "preliminarily closed." Followed up with Your funds are eligible for automated release on or around 30 April 2012 once additional confirmation is secured. That in no way implies that he doesn't have to have backup. It clearly states the process is ongoing. This is a long and painful process, and its OP's fault for not having a system in place for when this inevitably occurs. He should have had back up money for such an occurance and didn't. That's his fault. Finishing reading, there is that troublesome bit at the end about them not releasing his money as quickly as they should've - but all in all they did a damn good job considering their industry and their opponents. I find myself agreeing with the two comments that are now on the OP's page.
pbreit 14y ago
> They handled this as best as they possibly could? I disagree. Square handled it in a manner similar to waht we've come to expect from, say, PayPal. But I think many of us were expecting Square to be better than that. The tone of the support staff was unsympathetic, responses took too long, the reply about sending in multiple inquiries was obnoxious, there was an over-reliance on links to terms of service, funds recovery seemed over-aggressive considering the customer's legitimacy.

jseims 14y ago

What surprises me is Square doesn't hold a rolling percentage of transactions in reserve in case of charge backs. Seems like that would avoid this situation.

deleted 14y ago
[deleted]

staunch 14y ago

I would have just let them hold the money until the chargeback was settled. Who wouldn't? This customer was acting like an entitled brat for no reason.

aneth 14y ago

I have to land squarely on Square's side on this one. As far as I can tell, Square has handled this matter exactly as I would expect and hope. They communicated professionally and clearly with Jason. Jason responded with empty threats and demands, and clearly does not understand or respect his responsibilities in his business relationship. Getting money quickly from a merchant account is a privilege, not a right. That privilege is afforded in exchange for honoring the chargeback process, which for good reason initially favors the consumer by provisionally reversing the transaction. When a chargeback occurs - as clearly stated in Square's initial email - "The respective financial institution notifies Square and debits the funds from Square." Chargebacks are not fun, but they are a fact of life. When a consumer challenges are credit card charge, the consumer is entitled by law and contract to have their case heard, and in the meantime the middlemen must make sure they won't be left holding the empty moneybag. It is entirely reasonable for the Square to make sure funds are available to pay the consumer debt should the consumer prevail - Square will be out that money regardless of whether Jason pays up. To be frank, based on his attitude, Jason seems like the sort of guy who would refuse to pay up if the dispute had been decided against him and he disagreed with the determination. This is exactly the reason Square was and always will be justified in freezing the amount associated with any chargebacks. There is a process for handling chargebacks that you submit your self to in exchange for the convenience of getting money quickly from the credit card system. That money is only yours if the consumer does not challenge the charge - usually they don't, but you are responsible to pay if they do, and you are responsible for funding your account to cover whatever level of chargebacks your business sustains. It is entirely reasonable for: 1) Square to freeze funds associated with chargeback attempts. At this point, Square is out those funds. 2) Square to withdraw funds from a link account if the Square account is empty. It's the responsibility of the merchant to keep funds available to handle chargebacks, as I'm sure is clearly stated in their agreement. If the merchant has kept all funds out of reach of Square, by withdrawing all their money from the account and keeping the associated bank account empty, the merchant is indicating that they do not intend on fulfilling their end of the bargain on having a merchant account - namely honoring chargebacks and the determination process for chargeback disputes. If this withdraw results in NSF fees, particularly for a chargeback of such a small amount, that is the merchant's fault for not funding their account. Furthermore, NSF fees are easily avoidable by depositing funds the same day - why Jason did an electronic transfer is beyond me. Based on Jason's ignorance of his own responsibilities, his refusal to keep money available to handle chargebacks, his empty and immature threats to "go to the press" among other things, and his general disregard for his role in the business relationship, I would expect Square probably wants to terminate his account, but will decide against that as it would be more bad PR than it's worth. They would be justified, however, holding funds for a longer period of time, since it's clear he refuses to keep funds available to handle chargebacks and to honor the largely fair chargeback process. The only counter point I can think of is that, for a certain chargeback/total charge ratio, it does seem Square could take the risk and absorb any funds deficit. That is not traditionally how things work though, and since Square is doing their best to get merchants paid as quickly as possible, it only seems fair that merchants would do their best to ensure Square they intend to honor their end of the bargain. If Square did take on this risk for small chargeback amounts for merchants in good standing (say < 3% of total charges,) this would delay someone like Jason's understanding of the chargeback process until a real problem occurred - like a large number of customers demanding refunds. That might ultimately hurt Square more than it helps, both financially and in PR.

sauravc 14y ago

The author doesn't have a grounded view of the credit card chargeback process. Square seems to be pretty well behaved despite his whining.

RandallBrown 14y ago

Here's what should have happened. Square: There's a chargeback for 180 dollars. You can dispute it. OP: I want to dispute it. Here's the information you need. (no more than one day later) Square: Instead of just linking to our legal agreement we'll explain why we're taking money from your account. We have to withdraw the chargeback amount from your account because of regulations and stuff. There is more information at this legal link. OP: I keep that account empty to prevent fraud. The transaction will fail or I'll end up being charged. Can I pay it from another account or can you wait? (no more than one day later) Square: (if possible) Yes you can pay here (link to payment site). We will automatically try your account in a few days. You will here from us when we've decided on your dispute. OP: Ok, here is my payment (or) funds will be in my bank account shortly. (later on, after dispute is decided) Square:We ruled in your favor, the money is being debited back to your account. It will be available for withdrawal in a few business days.

phillco 14y ago
Verification of a new account would take up to 5 business days, so it would be no faster than sending an ACH for the money.
- pbreit 14y ago
  What are you referring to?
  - phillco 14y ago
    When you link your bank account with Square, they have to send test deposits first to verify that it is indeed yours. These take up to 5 days, plus the time after that to actually transfer the overdrawn money. Asking Square to take the money from another account would be no faster than moving it yourself to your primary one, because of this verification stage. Even if you had the foresight to link it ahead of time, Square only supports being associated with one account at a time.
jasonlotito 14y ago
No. This screams of willing ignorance. You are dealing with money. Your customers money. You should have just a bit of respect to understand the agreements you are signing when dealing with your customers money. Damn right you should understand the T&C BEFORE using the service like this. Doing otherwise is damn right irresponsible and shoddy. The people running into these problems have no idea what they are doing, they haven't dealt with real processing, and are blaming everything everyone but themselves. Hell, even your comment is ignorant of the system that the customer agreed to use. Guess what? Credit card users have certain rights, and if you want to accept credit cards, you have to play within those rules. This means chargebacks happen. This means you don't get paid. There are ways to reduce it, but you are still on the hook for it. Hell, even if the chargeback gets reversed, it's still held against you. A shining example of this ignorant is right here: > Square:We ruled in your favor, That's not how chargebacks work. Square doesn't rule in any capacity. It's the banks. It's the client bank. Not Square. Not the merchant. Every time a story like this pops up, we get a whole bunch of fools complaining and making reference to PayPal, and not a one of them has any clue as to the realities and reasons why. And yes, I've done this. I've read the documents, and handled this. And it's always the same story. People whining about the company they deal with, when the reality is, the policy is in place to protect their customer.

gravitronic 14y ago

Sounds like Square has generic customer service reps handling the incoming queue of service requests item by item. Would it have a better result in terms of responsiveness if each new case was handled by a single CS rep until completed so that every response to an issue does not have to pass the entire queue before being dealt with? Or would that increase net response time?

sirclueless 14y ago
It's a well-known fact that CS requests have a really high abandonment rate. It saves a lot of money to hold off on answering requests for as long as possible, because it weeds out the non-urgent requests, and makes people loath to create more. If every request takes at least 24 hours, then a sizeable segment of the population will give up trying unless something really big comes up. Responding quickly sends the wrong signal that CS reps are an effective way to solve issues and your volume will probably shoot way up.

debacle 14y ago

Throughout the entire exchange, Square is relatively prompt and incredibly informative and professional. This guy doesn't know how electronic payments work, and has clearly never had to deal with managing a merchant account before.

rhizome 14y ago
He also didn't mention anything about hearing back on his inquiry to his customer company. Maybe only Square has to reply promptly?
bosch 14y ago
Irrespective of if the author was correct in his use of the service, how is not replying for days prompt and how is tersely worded e-mails informative and professional? The whole thing reminded me of PayPal.
- debacle 14y ago
  When the author states something like "give me my money or I'm going to the press," he loses all good will I might have towards him.
- eridius 14y ago
  What do you mean? Re-reading the post, Square always responded by the next business day. There was no "days" wait here. The only confusion was the OP tried to make it sound worse by saying "over 24 hours", but all that means is Square emailed him in the morning on one day, and on the afternoon on the next day. This part is also weird. He received a reply dated April 20th. He then says "the next morning" he received another email about the withdrawn funds, and he replied. Except his reply is dated the 24th. I have no idea what to think about this. Deliberate misrepresentation of facts? A bit later on we do finally see a multi-day gap in Square's responses, where he emailed them on the 25th and Square replied on the 30th. However, Jason's email didn't actually contain any questions or actionable statements, only complaints and accusations of "thinly veiled threats". So I don't see the response gap here as being significant.

benatkin 14y ago

Glad Square isn't wasting money (or time, or attention) on people who are misusing it so badly. Square is well-funded but that isn't what funding is for.

bosch 14y ago
Don't you think this is an awesome opportunity for Square to explain to the author how charge backs work and why he should have money in his account? Perhaps if they used something other than cryptic replies they could help him understand the entire process and help make him even more of a Square advocate than he was before? That would be a HUGE differentiator from PayPal. I would definitely say funding is for increasing customer service and trying to create as many advocates of your service as possible!

jsavimbi 14y ago

Man get all wacky about $175 transaction. IF you're playing that close to the bone, my advice would be to stick to cash sales and forget about banks and online escrow services like Square.

FuzzyDunlop 14y ago

The problem here isn't necessarily with Square, but with Jason being very quick to play the 'taking further action' card. Being irate and confrontational gets you absolutely nowhere, and I would never say Jason's exchange was an exemplary case of dealing with an unexpected situation professionally, and with a cool head. Having spent 7 years in customer service, I'd encounter such attitudes all the time. It achieves nothing, except to piss off the person you're mouthing off to.

twunde 14y ago

There are a few issues with this article 1) The author never understood that he has to keep some sort of balance to cover chargebacks. Square may need to better communicate this since they are targeting people who may have never dealt with credit card processors. The automated chargebacks themselves may be regulated by the government and if not are standard practice to prevent fraud. 2) Square needs to upgrade its customer service division. The division is obviously not able to respond in a timely manner at this moment. The first thing they should do is change their policy to reflect that it's more likely to be 24-48 hours before a response. Their response was factual and ok for a big bank. However since Square promised to be different they should be aspiring to be like Charles Schwaub's credit card service where you can get someone on the phone at any hour and have them explain what's going on and why and what you can do about it. That's the kind of service that most people who use Square expect and should get. And specifically they should be available by telephone.

rglover 14y ago

I didn't bother finishing this because the author persistently claims the Square reps have a rude tone when quite the opposite is taking place. This email stood out for me: For the record I have never received such "guilty until proven innocent" treatment from a company before and until now have sung the praises of square and happily paid the fees associated with your service. If this issue is not resolved immediately (today, 04/19/2012) I will no longer use or recommend Square and will close my account as soon as this situation has come to an end. I will also attempt to submit this request to your "support" system if I can figure out how to find a contact email address there. Your prompt response is appreciated, Jason J. Gullickson Nothing in the initial correspondence from Square prompted an acerbic response. It sounds like the author felt threatened even though nothing really happened. Sort of confused why you'd have a bank account with no money in it when you're actively running transactions. Chargebacks, fees, and other miscellaneous activity are par for the course. Be prepared. It's not Square's fault.

rralian 14y ago
If you would have finished it, you would have found that Square's service was professional throughout. They never treat him as if he is "guilty until proven innocent". The rep just tries to explain to him why repeatedly sending emails will actually make their response take longer, and it's reasonable. She could have used the passive voice in her explanation, "when someone [blah blah] they will naturally inhibit", which would be harder to read as hostile. But that's a pretty subtle point that I don't think can be expected for someone who is likely judged on responses/hour and messages in queue. Plus, he was being pretty hostile leading up to this, so I think her response shows poise. These reps are humans after all, and they deal with irate and unreasonable people all the time.

nwenzel 14y ago

Seems like both sides just needed to understand that there's a person at the other end of the email / support form. None of those emails really sounded like a person talking to another person. Imagine those notes as a transcript of an in person conversation rather than emails. Sounds like Square can take care of their core business with decent competency, but as with many young companies, they may not have all the kinks worked out when something gets outside their normal decision tree.

jakejake 14y ago

We all love retailers who have very low friction in order to let us buy things without hassles, one click, etc. And when you create your home business using a convenient service like Square of course you also want to offer this no-hassle payment service to your customers. But what many people don't realize that these businesses also often are eating chargebacks - considering them a necessary part of business in order - to offer the low friction purchasing. When you're an individual and a $175 chargeback stings your checkbook (as it would for many of us) then it sucks to have to learn this lesson the hard way. I will say at least with standard merchant accounts when a chargeback occurs the bank will often get you and the customer on the phone together to figure out the problem. It usually reverses most chargebacks. Many times it's simply a mistake because the customer didn't recognize the charge. If Square is not doing something like this then you probably are taking on a lot more risk using their service compared to a traditional merchant account.

jasongullickson 14y ago

This is simply a precautionary tale; if you don't mind being treated this way, by all means continue using Square. I didn't, and I was unable to resolve the situation by working with Square, so I shared my experience, warts and all, with others in the hope that others can learn from my experience. Could I have been more eloquent and professional? Certainly. But this is something I was dealing with in my "spare" time, (and for the record, as donated time and a favor to a nonprofit). If this was a business venture it would have been handled much differently, but I don't think Square is exclusively for serious business use (at least that's not what I get from their marketing). So please feel free to criticize my actions; had I ran across a similar story myself before I found myself in this situation, it might have turned out better, so I feel it is worth taking a few shots if it helps someone else down the road. Keep on hackin' Jason

koeselitz 14y ago

I'm of two minds on this; I think maybe Jason could have understood how chargebacks work a little better - but at the same time, I think Square could probably streamline this process. Most of all, this bit of one of the emails from Square kind of set off alarms in my head as bad practice: "It is our pleasure to inform you that this inquiry has been preliminarily closed in your favor. While this is promising, it is also conditional. Your funds are eligible for automated release on or around 30 April 2012 once additional confirmation is secured." I don't think "preliminary closure" of a chargeback even makes sense, does it? Either it's closed or it's not closed. I understand that they might have various steps in the inquiry, but letting the customer know ahead of time that everything is probably going to work out well for them, apparently in order to soothe them, is setting the situation up very badly in cases where the preliminary positive resolution doesn't actually get confirmation later on. What's more, it's clear that this didn't even set the correct expectation in the event of a positive finding. They named a date, and then promptly failed to meet it. If I were designing a system to do this, it seems like it would be best just to let the customer know you're inquiring, that it may be a few weeks, and that they must keep a certain amount of money in their account until the inquiry is over. (Obviously I haven't designed such a system, and I know it's difficult. This approach just seems inevitably problematic to me, though.)