Does the Square POS protect me from customer disputes?

[Kalista]

I had a customer purchase several items in my store recently. I scanned the credit card (with a smart chip), it was approved by Square POS and the transaction was completed. A few days later the customer then disputed the charge and said they did not recognize the purchase. Square told me the customer's bank will make the final decision as to whether I get my money or the customer gets their money back. 

I do not have a photo of the person in my shop or any other proof of the purchase other than my Square receipt which clearly shows I scanned the credit card and lists the items the customer purchased. I thought I was protected by scanning a credit card with a smart chip. It did not come up as stolen or any other problems with the card. Does the Square POS system and scanning the smart chips in the credit card actually protect me?

[_Violet]

Hi @Kalista - Thanks for reaching out to us here on the Square Seller Community.

In the past, we offered a program called “Chargeback Protection” that would cover sellers’ dispute losses of up to $250 per month. However, as of April 19th, 2019, we no longer offer this coverage.

Why did we make this change?

After collecting information from, and speaking to, thousands of sellers, we learned that our other dispute management features (listed below) are more valuable to you than the Chargeback Protection program.

What does this change mean for you?

Although Chargeback Protection is no longer available, we’re still focused on saving you time and money throughout the disputes process, at no added cost. We plan to do this by further investing in the following features:

• Dedicated disputes experts to deal with banks on your behalf, so you can focus on your next sale.
• Our Disputes Dashboard to help you keep track of active and past disputes all in one place.
• Build Your Contract to help you set expectations with customers, and avoid potential disputes altogether.

With these features, we’ve been able to save Square sellers more than $330 million in won disputes since 2011. If a cardholder disputes one of your payments somewhere down the line, we’ll still be here to help you build the best challenge case possible. We’ve also compiled a few actions you can take to prevent chargebacks ahead of time.

I hope this information is helpful but please do let us know if you have any additional questions. Always happy to help! 😊

[Kalista]

Hello Alanah,

Thank you for your response. We currently follow all the practices listed under "a few actions you can take to prevent chargebacks" with the exception of requiring a signature. I was under the impression that we did not need to require a signature if the card has a smart chip. Is this correct?

Or, should I be requiring a signature from everyone who purchases something? This would be difficult to do since we make a lot of sales at festivals and it gets a little busy ringing up sales. 

Please advise.

Linda

[Ria]

Hi Linda- Great Question.

That is correct.

Requiring a signature is not a requirement but it does help to be able to provide proof of a signature in the event of a chargeback. 

[Candlestore]

In my store we setup Square to require a signature on sales over X amount.  The weird thing is that it only asks for signatures on Swiped or inserted chip cards, and does not ask for the WIFI, Apple Pay nor Google Pay type payments (Tap Payments)  We do have security cameras around our store but not sure how long the video stays before it is over written for things like what your describing.

[DesertShop]

Hi there, 
This is disappointing news. I've only had two chargebacks in ten years. One I lost for whatever wacko reason and Square chargeback protection covered me, and the other one I won so no coverage needed. 
Out of the 3 programs listed, 2 were always available afaik. Definitely the disputes dashboard. It seems like Square just keeps on getting more expensive while removing features that justified its extra cost over other merchant service providers and POS systems. Bummer.