When running your business, there may be times when something goes wrong with a sale. When this happens, your customer can issue a payment dispute by asking their credit card issuer to reverse the charge. If this happens, our team of disputes resolution specialists is here to help you navigate the process.

Payment Disputes Process Overview

When a buyer disputes a payment, their card issuer reaches out to us to get more information about the sale. We will then reach out to you to request any supporting evidence you have to assist us in challenging the dispute. 

We want your case resolved as swiftly as possible, but keep in mind that the timeframes and procedures surrounding the dispute process are managed by the card networks — not by Square. We will do our best to represent your case to the issuer, who will grant the final resolution. 

The Dispute Process

While the process with the card issuer may be lengthy, we’ve made it as easy as one, two, three. 

1. Notification

If the card issuer reaches out to us about a dispute, we’ll notify you via email. In the email, we’ll provide you a summary of why your customer requested the chargeback and exactly what the card issuer needs to resolve the case. 

A hold will also be placed on your account for the disputed amount. Don’t worry, this doesn’t mean we’ve refunded your customer. These held funds will simply remain in your Square balance until the case is resolved. 

2. Your Response

You’ll have 10 days to submit your response to our Information Response Form found in the notification email and your Square Dashboard

If you believe the charge is valid, select Yes on the first page of the form.
Chargeback payment details and challenge option selectedThen read over the details provided, collect your supporting information, and send it to us using the form. We’ll review the information you’ve sent us. If we think the card issuer may want more information, we’ll reach out.
Attache requested documentation and provide additional details in fields provided

Once we receive sufficient information from you, we’ll submit your case to the card issuer for review. If you are unable to send us information within the response period, we’ll review the payment and your account and submit a response to the credit card issuer.

If you want to return the funds to your customer, select No on the first page of the form.
To accept a chargeback, click

Once we receive your response, we’ll let the card issuer know and your customer will receive the funds in 3-5 business days.
Thank you for responding. We'll contact you if further information is needed.

3. Resolution

It’s now up to the credit card issuer to resolve the case. Though we submit your case immediately, the issuer can take up to 75 days to send us their decision.

If the card issuer resolves the case in your favor, your customer now has up to 60 days to file a re-dispute. However, please note that this timeline can vary between different card issuers. If after the 60 days your customer has not claimed a re-dispute, we’ll release the deferred funds back to your account.

If the card issuer decides the case in your customer’s favor, the transaction will be cancelled and your customer will receive a refund for the disputed amount. This decision is final – at this point, Square is unable to further challenge the payment dispute in the attempt to re-collect the funds from the card holder. If you do not have sufficient funds available to cover the cost of a lost payment dispute, click here to discuss your available repayment options with our Recovery Team.

If you would like to know the state of your case during the resolution process feel free to email us. We will be happy to let you know what’s going on. 

Dispute Reversals (Expediting the Process)

Typically, the fastest way for you to resolve a dispute is to contact your customer. If you’re able to communicate with them and come to an agreement, make sure to follow the directions below that relate to you.

For security reasons, we cannot share cardholders’ personal information. Any collection of your customers’ names, emails, or other personally identifiable information needed for reasons other than completing a purchase will have to occur outside of Square.

A. The Funds Need to be Returned to You

If you haven’t yet sent us your information for the card issuer, request that your customer cancel the dispute with their bank. After your customer cancels, their bank will send them a confirmation letter or email. Please collect that letter from your customer and email it to us as a PDF or JPG attachment. We’ll only be able to release the funds back to you if we receive this confirmation letter.

If you have already sent us your information for the card issuer and the case has not yet been resolved, we’ll need to wait for the issuer to resolve the case. Please email us to check on the status of your case. Once we receive the issuer’s resolution, we can guide you through the next steps. 

If your case has been resolved in your favor, but you’d like to receive your funds faster than the standard 60-day re-dispute period, you can speed up the process by asking your customer to re-dispute the case with their bank. Your customer’s card issuer will then re-pay the customer and they can then pay those funds to you outside the dispute process. Afterwards, let us know via email and we’ll accept the re-dispute to ensure your customer is not debited again. 

B. The Funds Need to be Returned to Your Customer

If you have already sent us your information for the card issuer and the case has not yet been resolved, we’ll need to wait for the issuer to resolve the case. Please email us to check on the status of your case. Once we receive the issuer’s resolution, we can guide you through the next steps. 

If your case has been resolved in your favor, but your customer still has 60 days to file a re-dispute, request your customer to re-dispute the case, and then let us know with an email. We’ll accept the re-dispute. 

If your case has been resolved in your favor and it’s after the 60 day re-dispute period, email us. We’ll release the funds back to your account so you can reimburse your customer.  

If you’ve come to an agreement with your customer and are still unsure what to do, send us an email. We’ll let you know what steps to take.

Holds on Disputed Funds

When the credit card issuer notifies us of your dispute, the card issuer also debits Square’s account. We let you know of the dispute right away and also place a hold on the disputed funds by either withholding funds from your Square balance or initiating a debit to your linked bank account. 

If the withholding or debit is successful, we’ll hold the funds until the case is resolved by the card issuer. 

If the withholding or debit is unsuccessful, we will place a hold on your Square balance for the disputed amount. Your Square balance will then reflect the negative disputed amount, and any future payments you take will go towards the outstanding balance.

If the card issuer resolves the case in your favor and we were unable to debit your account or collect the funds, we will release the deferred amount back to your Square balance. Your bank account will not be credited. Rather, your Square balance will be adjusted to reflect the resolution.

Per our Seller Agreement with you, we are not liable for any overdraft fees you may incur caused by the debit. To protect yourself from incurring an overdraft fee, please make sure you have enough funds in your linked bank account to cover a dispute on your largest transaction.

Preventing Disputes

While they don’t happen often, payment disputes are a risk you take when accepting payment cards. If you take the following precautions, you can reduce the likelihood of receiving a dispute and be prepared in the event that you do receive one.

Take a moment to learn about best practices for accepting payment cards and how to prevent fraud.

Present Your Refund, Return and Cancellation Policies on Your Receipts

Write out and present your return, refund, and cancellation policies on your receipts or any other agreements made at the point of sale. Presenting a no returns/refunds/cancellation sign at the point of sale is not sufficient to verify your business’s policies.

Make the Name on Your Customer’s Bank Statements Recognizable

Make sure your business name reflects the type of goods or service you provide. If you don’t have a business name, include your service followed by the name of the city where you provide your service (eg. Taxi - Ottawa, ON). Do not use your personal name as your business name. Your customer may not recognize this name when it appears on their statement.

Communicate with Your Customers

Initiate and maintain open communication channels with your customers. Clearly communicate expectations around pricing, sales tax, delivery and shipping.

Keep in mind that you can always re-send a receipt from your mobile device or from the Square Dashboard.

Improving the Payment Dispute Process

We’re constantly trying to make our payment dispute process better. If you have suggestions for improving it, please share them with us.