Someone Filed a Chargeback Against You: Now What?

[Kpay]

The idea of fighting a chargeback, or dispute, can be intimidating for some business owners. If you’re faced with a dispute, we’ll ask you for some information, and we’ll take care of the rest.

Remind me: what’s a chargeback again?
A chargeback occurs when a cardholder contacts their bank and asks that a payment be reversed. This may happen if the cardholder doesn’t recognize the charge on their statement, or believes they didn’t get the item or service they paid for.

What happens after a chargeback is initiated?
As soon as Square is notified of a payment dispute, we’ll reach out to you to see if you would like to either challenge the dispute or issue a refund to your customer. For some sellers, depending on the dollar amount of the transaction, issuing a refund may be the easiest resolution.

If you choose to challenge the dispute, you’ll be asked to provide some case-specific evidence to support your claim. Some examples of things we might ask for: contracts, proof of delivery, and signed invoices or certificates of completion. We’ll send you a form via your Square Dashboard (and via email). We'll use the info you provide to fight the dispute on your behalf.

Will my funds be held during an ongoing dispute?
We’ll place a hold on funds related to the dispute, just in case those funds must be returned to the cardholder when the dispute is finalized. If there aren’t enough funds in your Square balance to cover the disputed amount, that amount will be debited from your linked bank account.

Who makes the final decision?
The final decision of who wins the dispute will be made by the card-issuing bank, not by Square. If you challenge a dispute, our Square Secure team will do whatever we can to best represent you throughout this process. Payment disputes can take up to 90 days to resolve, but since Square doesn’t make the final decision, one thing to keep in mind is that timeframes and regulations can vary between different banks.

For most sellers, an occasional dispute just comes with the territory of doing business. If you find yourself facing a chargeback, know that we’ll be here to help you out. There are also a few things you can do to prevent chargebacks.

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We’d love to hear from you. If you’ve been through the process, how’d it go? Did anything about the chargeback process suprise you?

[#2]

The idea of fighting a chargeback, or dispute, can be intimidating for some business owners. If you’re faced with a dispute, we’ll ask you for some information, and we’ll take care of the rest.

Remind me: what’s a chargeback again?
A chargeback occurs when a cardholder contacts their bank and asks that a payment be reversed. This may happen if the cardholder doesn’t recognize the charge on their statement, or believes they didn’t get the item or service they paid for.

What happens after a chargeback is initiated?
As soon as Square is notified of a payment dispute, we’ll reach out to you to see if you would like to either challenge the dispute or issue a refund to your customer. For some sellers, depending on the dollar amount of the transaction, issuing a refund may be the easiest resolution.

If you choose to challenge the dispute, you’ll be asked to provide some case-specific evidence to support your claim. Some examples of things we might ask for: contracts, proof of delivery, and signed invoices or certificates of completion. We’ll send you a form via your Square Dashboard (and via email). We'll use the info you provide to fight the dispute on your behalf.

Will my funds be held during an ongoing dispute?
We’ll place a hold on funds related to the dispute, just in case those funds must be returned to the cardholder when the dispute is finalized. If there aren’t enough funds in your Square balance to cover the disputed amount, that amount will be debited from your linked bank account.

Who makes the final decision?
The final decision of who wins the dispute will be made by the card-issuing bank, not by Square. If you challenge a dispute, our Square Secure team will do whatever we can to best represent you throughout this process. Payment disputes can take up to 90 days to resolve, but since Square doesn’t make the final decision, one thing to keep in mind is that timeframes and regulations can vary between different banks.

For most sellers, an occasional dispute just comes with the territory of doing business. If you find yourself facing a chargeback, know that we’ll be here to help you out. There are also a few things you can do to prevent chargebacks.

---

We’d love to hear from you. If you’ve been through the process, how’d it go? Did anything about the chargeback process suprise you?

[rchernz777]

All I can tell you is that I will never use square again and I will not recommended to no one, you took $140.00 out of my bank account for some guy that got in my cab for 4 hour ride and I work hard for you guys to returned this money back to him. Forget you guys

[EJ_]

@rchernz777 Check out the information in this thread, as it sounds like you've experienced a dispute or chargeback with one of your customers. 

It's important to note that Square does not control this process. Disputes and Chargebacks are initiated by your customer with their card issuing bank 

[jimwh1]

Gotta love it when Square LOSES a dispute with a customer's bank over a chargeback, when they can show a SIGNED receipt, show that the card was actually SWIPED, and send you a link showing this.  Square reps must be a complete joke!!!  How in the world do you lose these disputes?!?!?!?!  Continues to happen more often than not!!!  Thought you were "here to help protect me" as you put it below.  HOW?!?!?  With protection like you offer, I might as well do this on my own!!!

[personal information redacted]

[unhappyseller]

So..I produce custom videos. Produced one for a client a month ago..I can PROVE I delivered it, and he was happy with it. Now he's initiating a dispute, and all I get from Square is an email saying "we are refunding the customer's money."

No investigation. No opportunity for me to dispute it. 

IS THIS HOW YOU DO BUSINESS??

If so, I will never use you again.

I've sent an email to customer support and I better hear back PRONTO.

I have tons of documentation that I can prove this jerk RECEIVED his product and is not entitled to a refund.

[Crockett1]

See, here is the concern. Square will not hold the bank's feet to the fire on your behalf. This also happened to me, and here's how it works. A customer disputes, bank refunds debit card, bank does investigation.....Bank is not gonna ever rule against customer...Either the bank's Ins, or (you) the vendor is giving back the money....Now if Square says to bank, no way, we have signed receipt and our client is in good standing on this, then the bank's Insurance covers loss.....Square just don't do that....The question is WHY?

[DaoDeJing]

@jimwh1 @unhappyseller

Unfortunately this is generally how things work out, regardless of pay processor. Square has no say in what happens, they just provide as much data as they can to the bank. The bank allows no negotiation or discussion, just data. And then, regardless of what the evidence shows, the bank almost inevitably sides with the customer.

In my industry, in addition to all the payment proof, we often have security footage of customers receiving the good or service, as well as audio of them confirming their identity, their signature on a receipt, and even a scan of their photo ID. Still, the bank almost always allows the chargeback.

Sadly, chargebacks are a cost of doing business. Extremely frustrating, yes. But failing to dispute a chargeback is not Square’s fault. They have basically no power in the matter.

If a customer scams you, your only real recourse is to sue them for theft of services or goods.

[TireRich]

I got notice a customer requested a refund. I tried uploading my proof with signature confirmation and apparently my upload wasn't accepted and the customer now has the product and the refund. 

[ashc]

Hey @TireRich,

Sorry to hear you received a dispute from one of your customers.

I moved your post to an existing thread to the Community on how the disputes process works for more clarity.

We're not able to help much with anything chargeback-related here but we can explain the process and what you can do. 

[britto106]

Received an unauthorized return yesterday and today we received a chargeback notice. We have no problem issuing a refund on a return. Can I just issue a refund to eliminate the chargeback issue or do i have to handle it different now there is a chargeback? We usually don't refund the shipping cost. 

[ashc]

Hi @britto106,

Sorry to hear you received a chargeback from one of your customers.

I moved your post to an existing thread in the Community about the chargeback process.

You unfortunately can't issue a refund once the chargeback has been initiated but you can accept the dispute to refund the customer and not go through the challenge process.

[Lisa22]

I have now lost 4 charge back dispute because Square will not support me.  I have my "No Refund" policy on my receipt and my customers sign their receipts but yet Square will not fight for me. 

[LOoe]

Yikess, not one person on here has won a dispute. Hopefully I don't loose $600 today.

[4boysice]

Someone requested a refund and square automatically give them the refund?? I have an Italian Ice cart and so they had no issues before walking away. So how do I prevent this 

[JustinC]

Hey @4boysice - Seems like you're dealing with a chargeback. I merged you to a thread that goes over the dispute process and provides best practices for preventing chargebacks in the future. 

I hope this helps

[Rayg]

I should have a transfer available from most recent transaction. Not in bank , and transfer option not present

[AshleyK]

Hi @Rayg! I've merged your post to an existing thread. It looks like there was a chargeback on your account. You can address this in your Square Dashboard. Please follow the steps from @Kpay's post and you should be go to go. 

If you have any other questions, don't hesitate to ask. Thank you!

[PhotoPaul]

Why is it that only 2 of the last 5 charge back disputes have been awarded in my favor even though I have a signed order form with their name, address, phone and email proving the charge? I have provided the exact same paperwork in each instance. What gives?

[Gumina]

We are leaving Square after today and I hope you all do as well! PLEASE READ!

Customer purchased items from us and leaves store WITH ITEMS in March, like everyone else we were forced to close. We explained multiple times we weren't allowed in our building to refund items that would apply for return if they were unused. Customer files charge back against us totaling $400+.

We supplied Square with the following:

- a text FROM THE CUSTOMER sending us a picture showing they still had the product

- a letter headed letter describing the interaction with customer and that we were forced to be closed

- Our return policy sign in-store and on our website.

BUT IT GETS WORSE - Last week, we received an email from Square saying WE WON our case and the money was actually returned to our account. SIX DAYS LATER, the money that was returned was taken BACK OUT of our account and Square says that the decision was reversed?!?!?!

We are now out of our money, that was returned and then taken back again. As well, as our product that the customer still has. 

[PhotoPaul]

WOW! How on earth do they substantiate a reversal!

No replies or help from square on my end. looks like im shopping around for an alternative. Where are you guys looking to move to?

Thanks for the heads up!!

[lashedbyronni]

I have grown so tired of the lack of protection from Square when fighting customer disputes. 

They offer NO true help or protection. 

I have been with Square for over 3 years and have had 12 chargebacks, all of which have been initiated by clients that I have actually serviced successfully yet most of the disputes were awarded to the buyer.

Square need to re-evaluate their Seller Protection Program because it does not work for the merchants that use your payment processing.

Square is offering open opportunities to scammers and leaving their merchants vulnerable. 

I have just received yet another chargeback for $950 for a training that I did in fact provide to the client and Square immediately went into my balance and removed the funds.

I have the clients license and card that she emailed to me, I have photos and videos of the client taking the course and graduating but I can almost guarantee that this scammer will be awarded the dispute and I will be out of nearly $1,000 with no help from Square.

Square, please consider reevaluating your seller protection in the very near future.

Especially for service providers.