Hey @go-rent-a-ride. Welcome to the Square Seller Community. Your question is a good one. Disputes and chargebacks are just a fact of life if you are going to accept cards from your customers. I know business owners who have decided to remain cash only mostly because of this fact. The fact is that human beings are human beings — and for many of us dishonesty and deceit are just part of who they are. No card processor, including Square, can protect us from that. Also, as we all know, card issuers tend to always favor their customers (the card holders) over businesses, even in the fact of evidence that they shouldn’t. They don’t want to lose business, so they make us pay for their cowardice. Again, that’s just a fact of life in our weird version of capitalism. That being said, we do have options.
For our online stores and purchases made there, Square provides Risk Manager. These tools give us the ability to set up rules and verification steps to help us ensure that the person using a card is, indeed, authorized to use that card. Risk Manager has lots of bells and whistles, so I would recommend spending some quality time reading the help articles, watching the videos, etc. If you do, it will be worth it as it will help with this part of your exposure.
I think I can guess your business model from your screen name, but it would help if you could tell us what you do. That might allow us to give you more suggestions. For example, contracts are often a good line of defense, if they make send for your business model. Keeping or memorializing every conversation you have with a customer is a no-brainer. Never delete texts or emails. Keep a log of phone calls (or record them, per the laws and regulations in your state). While you don’t want to act like your customers are out to get you, being prepared for those that are is wise.
If you don’t have one, get a good attorney for the times you have to take something to court. Also, a good attorney on speed dial is a great resource, in general.
Another thing. When a dispute happens, Square will help you collect and submit your evidence and your case. However, beyond that Square can’t do much. Remember that we are using Square’s merchant account. As such, Square is required to be bound by the decision of the card issuer. This means that if something does not go your way — which is often the case — you will have to decide how to proceed, how much you want to spend to be right, etc.
Lastly, since you mentioned insurance, I have a suggestion. Make this a reason that you use automatic Square Savings. I know sellers who set aside a small percentage (1/2%, 1%…) of their card sales in a savings folder as a dispute insurance fund. Then, if they lose a dispute, they have a fund they can dip into to help cover the loss. As an added bonus, Square Savings earn 1.75% interest currently. And, if you really want to insure yourself, Google “chargeback insurance.” There are companies that specialize in this, and for some business models they are essential. Just be prepared for sticker shock — insurance against theft and deceit doesn’t come cheap.
Best,
Hey @go-rent-a-ride. Welcome to the Square Seller Community. Your question is a good one. Disputes and chargebacks are just a fact of life if you are going to accept cards from your customers. I know business owners who have decided to remain cash only mostly because of this fact. The fact is that human beings are human beings — and for many of us dishonesty and deceit are just part of who they are. No card processor, including Square, can protect us from that. Also, as we all know, card issuers tend to always favor their customers (the card holders) over businesses, even in the fact of evidence that they shouldn’t. They don’t want to lose business, so they make us pay for their cowardice. Again, that’s just a fact of life in our weird version of capitalism. That being said, we do have options.
For our online stores and purchases made there, Square provides Risk Manager. These tools give us the ability to set up rules and verification steps to help us ensure that the person using a card is, indeed, authorized to use that card. Risk Manager has lots of bells and whistles, so I would recommend spending some quality time reading the help articles, watching the videos, etc. If you do, it will be worth it as it will help with this part of your exposure.
I think I can guess your business model from your screen name, but it would help if you could tell us what you do. That might allow us to give you more suggestions. For example, contracts are often a good line of defense, if they make send for your business model. Keeping or memorializing every conversation you have with a customer is a no-brainer. Never delete texts or emails. Keep a log of phone calls (or record them, per the laws and regulations in your state). While you don’t want to act like your customers are out to get you, being prepared for those that are is wise.
If you don’t have one, get a good attorney for the times you have to take something to court. Also, a good attorney on speed dial is a great resource, in general.
Another thing. When a dispute happens, Square will help you collect and submit your evidence and your case. However, beyond that Square can’t do much. Remember that we are using Square’s merchant account. As such, Square is required to be bound by the decision of the card issuer. This means that if something does not go your way — which is often the case — you will have to decide how to proceed, how much you want to spend to be right, etc.
Lastly, since you mentioned insurance, I have a suggestion. Make this a reason that you use automatic Square Savings. I know sellers who set aside a small percentage (1/2%, 1%…) of their card sales in a savings folder as a dispute insurance fund. Then, if they lose a dispute, they have a fund they can dip into to help cover the loss. As an added bonus, Square Savings earn 1.75% interest currently. And, if you really want to insure yourself, Google “chargeback insurance.” There are companies that specialize in this, and for some business models they are essential. Just be prepared for sticker shock — insurance against theft and deceit doesn’t come cheap.
Best,
