"free" plan seems to be lacking basic features?

[Hcwe]

We have the Square for Retail ("free") plan, where we pay a flat 2.6% per transaction. We have two stores, a Square Terminal in each store, and we keep a backup Square Terminal handy in case of any catastrophic failure with one of the others.

We came from Chase Paymentech very recently, but left Chase because they had a major terminal software failure in their POS equipment just a month or two before Christmas. Chase's Tech Support couldn't handle the nation-wide support calls, so they stopped answering all support calls. I sat on hold two days running, for 5 hours-plus each day, and was finally disconnected each time. Needless to say, Chase had become undependable. A shame, because they were always professional, and reliable, with easy monthly statement reconciliation.

Using Square has been refreshing, and enlightening. I can see why so many small startup retail companies have gone with them. Support is good, setup is easy, and their statements are easy to deal with (after running the statement through a spreadsheet macro!), and simple.

Sadly, I'm beginning to see a pattern, however. There have be a number of simple, small features that would be very helpful to have access to, but they all seem to require an upgrade to a higher priced plan! $89/mo per location for the "Retail Plus" plan!

Currently our "free" plan has a 2.6% surcharge on each transaction. Great! Simple. No Amex extra surcharge, no Corporate card extra surcharge, no debit card fees, etc. (although there are no surcharge-free "Test" charges, to train your employees! Every refunded $1 charge, costs 25-cents or so in fees!)

But actually, after taking the average of all our Chase fees over the last 4 years, including Amex fees and corporate card surcharges, debit card fees etc, it turns out we were paying about 2.6% for Chase as well!

With Square. the latest 'missing capability' I've searched for, which took me days to track down because it turns out it's a feature in "BETA testing", raises its ugly head due to the fact that we have two stores. Because we have two locations, we need the ability to process a return in a location other than where the item was originally purchased. ie: A customer purchased the item in Store A, but wants to return the item at Store B.

With Chase, or with any of our previous card processors (we've had a number of processors over the years - we've been in business for 45 years), we could simply refund the customer in either store, and the refund amount would be deducted from the returning store's end-of-day net card sales. This makes it fairly easy to reconcile the day's sales/returns with all card transactions for that specific store. This is not possible with Square. Square requires that the return be made on the Transaction list of the store at which the sale was originally processed. You can select which store to apply the return to, using the "Location" option in the Transactions list, but the Net sum of the Card Transactions at the end of the day does not then correspond to the actual sales/returns sum for that store location!

The only way to reconcile the totals of sales/returns with card Transactions is for one store to call the other and let them know that their numbers will be off, and make note of these differences for their end-of-day. Tough when really busy and dealing with lots of returns after Christmas!

It appears that Square is "BETA testing" a feature for processing "Unlinked Refunds" (first mentioned in the BETA program in March of 2024). This would make it possible to run a return transaction through which was originally processed on a different terminal. This would solve my problem, but Square makes it available only to businesses that 'subscribe' to the Retail Plus plan, at $89/mo per location. That would cost me $2136 per year! 

All the other services and features that Square also offers, payroll, business loans, marketing, I have no need for. Just their card processing.

Hopefully someone at Square can steer me in the right direction, to not be so disappointed with the service. My sales-rep stopped responding about this, perhaps because the problem is so unique, and not in line with Square's normal customers' needs. Maybe Square is mainly a service for smaller one-location companies, or those that are willing to buy the whole package, payroll, marketing, et al.

[TheRealChipA]

Hey there @Hcwe.  First, it is probably a good idea to clarify a common misconception.

The 2.6% + $0.10 fee is ONLY for credit card processing.  This fee allows Square to smooth out the complicated traditional card processing fees (interchange, swipe, etc, etc, etc) so that we pay a flat fee no matter what card the customer chooses to use.  Besides giving us credit card processing and most “basic” features, it also gives us a free POS, should we choose to use it, in the form of the standard Square POS app.  The point here is that your “free” plan is just free as far as the retail features ABOVE AND BEYOND card processing are concerned.

Otherwise, Square chooses to charge subscription fees for all of the ala-carte, optional, things we might want.  In your case, retail as a free tier for basic retail functions, and then charges more per month if you need more advanced functionality.  As more features are added, more back-end costs come up for things like server processing time, server storage, and so forth.  Square does an analysis of all of these factors when they decide how to price tiers and which features go in which tiers.

I’ll agree that sometimes it is confusing why a feature we need is not considered “basic,” but the fact is that is how they have structured their tiers.  Unfortunately, while you might consider “unlinked refunds” to be a basic tier function, some sellers like me would never have a need for that and would complain about all of the “useless” functions in the basic tier.  That is the tight-rope that Square walks when playing the pricing game.  Obviously, they have to make money and they have to pay for the engineers and support staff and servers.  But they also have to balance that with retaining and growing their seller base.  

As for your issue about returns messing up historical sales, you are not the first nor the last to bring this up.  However, it might seem simple to you, but this change would be a fundamental change for Square.  They have always held firm to the rule that the past is the past.  Once a transaction is closed, once a day is closed, that is set in stone.  I have no way of knowing that they will ever change this rule, but even if they did I’m pretty sure that we all could expect significant increases in our fees for such a huge retooling of pretty much everything in the Square ecosystem.

I know that you didn’t ask for the thoughts of another seller, but there they are anyway.  I’m someone who has been with Square over a decade now.  At one point about five years ago, I did try another processor and found out that between all of the processing fees and statement fees and dispute fees, etc, that 2.6% is a great deal.  My average while I was gone was more like 4-5%.  These days, I just be sure to price my products to include the processing fees so that all customers pay those fees, regardless.  My cash customers haven’t complained and my card customers are clueless.  And, to make it better, I usually end up making a little money on fees.  That’s why I’m in business.

[Hcwe]

Thanks Chip, all good points. 

Basically then, for me it comes down to whether the PITA that Chase created for us, with their days-long network failure, outweighs the niggling little features that Square has withheld. 

As I said, I've paid the same 1.95% rate with Chase for ten years or more now, and my average percentage each year, after all the extra fees are added in (like those that you've mentioned), comes out to approx 2.6% overall. That includes the ridiculous surcharge that Amex charges. We've only had maybe two chargebacks in the last 15 years.

So it seems that the mainstream 'old-school' card processors (our previous processor had similar rates), compete just fine with what Square offers, but Square actually charges extra for 'subscribing' to basic features. 

Just looks that way, on the face of it.

On the plus side, Square was much easier to set up than any processor we've ever had, much more friendly, much easier to deal with customer support and sales, but I wonder if Square doesn't take the 'banking responsibility' that the other processors do, in handling the money, security of each transaction, etc. don't know. Just supposing here. 

Thanks for your input about it. If it ends up that this is the final 'missing feature' that we find lacking, we'll probably stick with it. We've come up with a workaround for it. But again, $178/mo is not gonna happen.