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Home>Disputes Process

Payment Disputes FAQ

We want to help your business through the dispute process swiftly and successfully. Here are a few answers to help you better understand and navigate the procedure. If you have any other questions after reading this, feel free to send us an email.

Payment Disputes Process

What is the dispute process timeline?

When your customer files a dispute with their bank, we let you know of the dispute right away. We will also set aside and place a hold on the disputed funds for the duration of the dispute process.

  • If the funds in your Square balance aren’t enough to cover the amount of the dispute, we will debit your linked bank account to cover the disputed amount.
  • If there are not sufficient funds to cover the amount of the dispute in your Square balance or in your bank account, your Square balance will reflect the negative disputed amount. Any future payments you take will go towards the outstanding balance.

We will release the funds back to you if we receive notice that the dispute has been resolved in your favor. If the case is resolved in your customer’s favor, the held funds will be returned to your customer.

We’ll provide you with an information request form in your Square Dashboard that we will then pass along to your customer’s bank. As soon as you send us your information, we’ll forward it to your customer’s bank. The bank will review and consider the documentation and information you provide as they make their decision about the resolution of the dispute. Your customer’s bank will resolve the case, and this process can take up to 90 days.

Once the bank informs Square of their decision, we’ll notify you of the ruling by email and via your Disputes Dashboard. Learn more about the dispute process timeline.

How do I view a disputed payment in my Dashboard?

You can view a detailed report of your dispute in your Square Dashboard by selecting Reports > Disputes. From here, you can view a full breakdown of each disputed charge, submit your response, and provide documentation to help the Disputes Team build a case on your behalf. You can track the status of your dispute, so you’ll know when there is an update to your case.

You can also click the link in the dispute notification email we send. This will take you directly to the disputed payment within the transactions section of your Dashboard.

What is an EMV payment dispute?

Over 90% of Square customers use EMV chip cards. To correctly process a transaction using an EMV-enabled chip card, the card will need to be inserted - or “dipped” - so the chip can be read.

The EMV chip provides a layer of protection against fraud when the card is dipped or tapped. Now, liability for fraud or payment disputes goes to whichever party is least compliant with the new EMV system. So, if you swipe a chip card when you should have dipped, issuers won’t reimburse you if the customer claims their card was used fraudulently.

What is an ACH payment dispute?

Automatic Clearing House (ACH) payments are essentially an electronic version of paying by check. An ACH dispute can occur when the buyer questions the transaction and requests that their bank reverses the debit.

Unlike credit card disputes, all ACH disputes are final. Nacha is the governing body that defines rules and standards for ACH payments, and it does not allow a formal process for challenging ACH disputes. Per Nacha regulations, Square cannot challenge an ACH dispute.

Learn more about ACH payment disputes.

Why is the disputed amount higher than the original payment?

In cases when you accept a payment from an international card in a different currency, the discrepancy in the amount of your dispute is due to the difference in the currency conversion rates at the time of the original payment versus the time the payment is disputed

Can you send me my customer’s information?

For security reasons, we can’t share cardholders’ personal information. If you do not recognize the customer filing the dispute, send Square any other information about the sale or your business that may help your case.

Can my team members view and respond to disputes?

Yes; if you don’t have the time to manage the dispute process or you want to focus on other areas of your business, you can grant team members permission to view or respond to open disputes.

Respond to open disputes

For a team member to view and respond to open disputes, you must make them a Full Access Team Member. These team members will be granted all permissions except adding or editing bank accounts for transfers, adding Authorized Representatives, and performing OAuth for Square APIs — only the account owner can perform these tasks.

From your Square Dashboard, go to Account & Settings > Account > Authorized Representatives.

  1. Click Create Authorized Representative.
  2. Select an existing team member or add a new team member by filling out the form with their name and email address or mobile phone number.
  3. From here, choose the location(s) the Authorized Representative can discuss.
  4. Click Save.

View open disputes

If you want your team members to be able to view open disputes but restrict them from responding to a dispute, you can grant them permission to view open disputes.

  1. From your Square Dashboard, select Team > Team Members.
  2. Select the team member, and click Edit under Permissions.
  3. Under Permission set, click Edit.
  4. Select Reports, then check View dispute reporting.
  5. Click Continue > Save.

If you do not want a team member to be able to view or respond to disputes, you can uncheck the permission boxes before saving.

Learn more about how to get started with Team Management.

Held or Debited Funds

Why are my funds not being transferred?

When your customer files a dispute with their bank, we let you know of the dispute right away. We will also place a hold on the disputed funds for the duration of the dispute process and will release the funds back to you if we receive notice that the dispute has been resolved in your favor. If the case is resolved in your customer’s favor, the held funds will be returned to your customer.

Why was my linked bank account debited?

When the card issuer notifies us of your dispute, they immediately debit Square’s account. We let you know of the dispute right away and also place a hold on the disputed funds in your Square balance.

If the funds in your Square balance aren’t enough to cover the amount of the dispute, we will debit your linked bank account to cover the disputed amount. If we are unable to successfully hold the disputed amount from your Square balance or by debiting your bank account, your balance will then reflect the negative disputed amount. Any future payments you take will go towards the outstanding balance.

Note: Per our Seller Agreement, Square is not liable for any overdraft fees you may incur from debits to your bank account. To prevent any unwanted fees, be sure to keep sufficient funds in your linked bank account to cover your largest transaction.

Why is my bank account no longer linked to Square?

Square may have been unable to debit your bank account due to the deferred funds from the disputed amount. If an attempted debit fails, Square will be unable to communicate with your bank, and it will not be possible to send transfers to that bank account.

You will need to link your bank account to re-establish two-way communication with your bank. You can use your existing bank account again, but you will need to go through the verification process, which can take up to four business days (excluding weekends and holidays).

Once your bank account is verified, you can expect to see transfers according to our normal transfer schedule.

Dispute Information Request Form 

Why do I need to fill out an information request form?

When your customer initiates a payment dispute, their bank contacts Square to get more information about the transaction. We will let you know that your customer has disputed a payment and provide you with an information request form that we will then pass along to your customer’s bank.

Their bank will review and consider the documentation and information you provide as they make their decision about the resolution of the dispute, so you need to provide as much detail as possible. The bank is looking for any supporting evidence you may have about the transaction, such as contracts, invoices, email correspondence, and signed proof of delivery.

Why does the form need to be completed in English?

The reviewing banks require dispute responses to be provided in English.
For liability reasons, we are not able to translate responses on your behalf.

What type of information should I send?

The information we’re typically looking for is:

  • Signed agreement or invoice
  • Refund or cancellation policy
  • Proof of delivery or services rendered
  • Evidence of effort taken by you to resolve the issue
  • Descriptive paragraph of the items or services purchased

What if I don’t have all the requested information?

We recommend that you fill out the form to the best of your ability.

Providing evidence that clearly and directly disproves your customer’s claim will increase your chances of winning the dispute. Be sure to select Submit when you have finished filling out the form. Once you submit the information request form to Square, additional information can not be shared with the bank.

I’m unable to upload files to the form. What should I do?

To access the form and upload files, sign in to your Square Dashboard. Submit only HEIC, JPEG, PDF, PNG, or TIFF file types. We’re unable to successfully download any other file types.

You can also submit your documentation from your smartphone. Tap Choose file in the form, and either take a photo of the documentation or select a photo you’ve previously taken.

If you are not able to view the form, make sure JavaScript is enabled in your browser and is fully up to date. To enable JavaScript, follow the instructions based on your browser: Firefox, Chrome, or Safari. If you continue to have issues uploading documents, try using a different browser.

How do I send more information?

You can upload additional information from your online Square Dashboard at any time within the seven-day timeframe. Once you submit the information request form to Square, additional information can not be shared with the bank.

Dispute Cancellation 

Can I cancel a dispute on my customer’s behalf?

No, the customer will need to contact their card-issuing bank directly to cancel the dispute.

My customer wants to cancel a dispute. What next?

If your customer decides they no longer want to dispute a payment, they can contact their bank and ask for a previously opened dispute to be canceled. Customers may cancel a dispute if they unintentionally disputed a transaction or if you have been in touch with your customer directly and came to an agreement.

While a customer may state that they intend to cancel a dispute, we recommend that you respond to the dispute with evidence as if the normal dispute process will be followed. You want to be prepared in the event that your customer changes their mind or forgets to reach out to their bank to cancel the dispute.

If your customer agrees to cancel the dispute, the next steps will vary depending on what kind of card your customer used for the disputed transaction. You can track the progress of the cancellation in your Disputes Dashboard.
Learn more about dispute cancellations and the Payment Disputes Process.

What happens after I inform Square of a dispute cancellation?

Once you’ve let us know that your customer has contacted their bank to cancel a dispute, the next steps will vary depending on the brand of card the customer used.

American Express: If you notify us about an American Express dispute cancellation, we will contact the customer’s bank and update you within five business days. If the bank confirms the cancellation, we will release the respective payment hold on your account.

Mastercard, Visa, or other non-American Express card: If you submitted a cancellation letter for a dispute related to a non-American Express card, we will provide an update letter within five business days. If the letter confirms the dispute has been canceled, we will release the respective payment hold on your account.

Where can I check the status of the cancellation?

You can track the progress of a dispute cancellation in your Disputes Dashboard.
If you’re unsure whether a resolution has been reached, email us to check on the status of your case.

Dispute Resolution

What is the status of my dispute?

Our team will reach out to you as soon as the card issuer reaches a final resolution.

You can also visit your Square Dashboard to view the status of a dispute at any time, view all the documents you uploaded, and see what’s next in the dispute process.

The dispute was resolved in my favor. Where are my funds?

When the card issuer notifies us of your dispute, we place a hold on the disputed funds by either withholding the funds from your Square balance or initiating a debit to your linked bank account.

  • If the initial withholding or debit was successful, the funds will be released as a credit to your bank account three to five business days after the case is resolved.
  • If the initial attempt to debit your bank account was unsuccessful and/or your Square balance was used to cover the dispute, the deferred funds will be released back to your Square balance. You can then transfer or spend your Square balance as normal.

My dispute was not resolved in my favor. What can I do now?

Unfortunately, once the bank makes their decision, it is final — Square will not be able to continue challenging this dispute on your behalf, and cannot assist further.

Your customer will receive a refund for the disputed amount. If you don’t have enough funds to cover the cost of a lost payment dispute, you can discuss your available repayment options with our Recovery Team.

Note: If you want to pursue the case further, you’ll need to resolve it with your customer directly or seek legal recourse.

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