What It Means When We Reach Out For More Information

Sad merchant hit with a chargeback

This post was written by Rucha Tatke, a Fraud Analyst on Square’s Risk Team.

Our goal is for all sellers to set up their readers, start taking payments, and never have to think twice about it. But the reality of running a business is that you sometimes encounter issues with your payments. And when that happens, we might reach out and request more information.

You might hear from us if a buyer was unhappy with a purchase, and instead of requesting a refund, decided to ask the bank to dispute the charge. Other times, it’s not a picky buyer, but a fraudulent one.

This may be someone using a stolen credit card or someone who never intended to pay for the purchase at all. Fraudsters are also getting more sophisticated, and you may be a victim of account takeover.

Our Square Risk team is the group that monitors all this activity; we’re here to help insulate your business from risk. It’s similar to the way that your bank tries to protect your credit card accounts. So, when we request additional details about your business, we’re just looking for information to protect your business from fraud.

Here’s what’s happening behind the scenes:

Our system monitors unusual activity 24 / 7

Our algorithms flag bad payments as soon as they enter our system, letting us know that your account may be at risk of a dispute.

We may reach out to you once we’ve seen a flag

A member of our team may reach out to you to request more information (see below for the kind of documentation we look for). Expertise is also added to the process in order to make sure your account is treated correctly.

We try to prevent any loss to your account

When we request information, we may simultaneously suspend deposits and place your funds on hold, just in case the payment is confirmed as fraudulent. You can be sure that we’re working behind the scenes to keep your account safe from fraud.

We use the information you provide to protect your account

The information you provide helps us continue to make better decisions when we catch suspicious activity. Well-documented, timely responses go a long way in resolving payment disputes or fraudulent transactions. This enables us to understand your business better so that we can continuously improve our detection process.

How to take charge of your security:

Worrying about fraud and disputes can take up your valuable time and energy. While we are constantly working to keep your business secure, there are steps you should take to be proactive too. Here are a few best practices to help you better understand how to keep your payments (and business) secure:

Know your customers

Just like Square strives to understand your business, it’s important you know who your typical customer is as well. If you ever feel nervous about a customer’s legitimacy for in-person transactions, you can request a customer ID to verify against their credit or debit card.

When you’re handling large online or card-not-present transactions, it’s important to make sure the customer’s purchases and requests make sense. Examples of strange online transaction behaviour include international credit card payments processed for local orders, or unusually large quantities of expensive items for new-to-business customers. More than anything, trust your gut. If you get strange requests (a money transfer request, for instance), don’t proceed with the transaction.

Documentation and proof of service are your best friends

Keep records of your receipts, invoices, and proof of service contracts up to 18 months after a sale. For larger transactions or when you’re accepting a card not present payment, retaining postage and proof of delivery documents is also a safe bet. That way, if you ever need to challenge a chargeback, you have all of the evidence you and the credit card company will need.

If your business doesn’t currently keep this kind of documentation to track your transactions, Square Invoices is a simple tool that enables you to send customisable, digital invoices to your customers. Every invoice or transaction you generate with Square will be recorded in Square Dashboard to ensure you’ve always got access to verifiable transaction evidence.

Reduce the risk of chargebacks with payments hardware

Using a payment reader that accepts card present payments whenever possible (rather than manually keying in card numbers - also known as card not present payments), and including as much level of detail about what items your customer has purchased on the receipt, can help reduce your risk of chargebacks. Purchase the Square Reader for contactless and chip for just $59 — a small investment that ensures you’re always ready to accept card present payments, and will go a long way in protecting your business against possible losses.

Rest assured the Square Risk team is here to protect your business so you can focus on your next sale. Learn more about Square Secure here.

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