Understanding Hidden Fees in Your Square Statement

If Square is hiding fees in your bill, you may have legal options.

If you looked over your most recent Square statement and found some things that didn’t make sense, you might wonder what they are for and who to contact if they shouldn’t be there. 

Square is a financial services and digital payments company that makes it easy for small businesses and individuals to accept debit and credit card payments directly from their smartphones. Now consumers can shop at a farmer’s market on the side of the road and not worry about having cash for organic berries and honey. But that still doesn’t help you when you have used Square and found fraudulent accounts or hidden fees. What does?

Let’s take a look at their regular fees first:

Square has gained popularity by claiming there are no fees for cash, check, or gift certificate payments, nor are there monthly fees for maintaining your account. Compared to a traditional bank, this might save you between ten and twenty dollars per month. However, while they do not charge you hidden fees for maintaining your account or signing up for the service, Square does charge you each time a transaction is processed, no matter how small. 

Reviewing Your Statement

You can review your Square statement or history of transactions using the online Square Dashboard, where you can look at monthly breakdowns or access all of your sales and fees paid to date. By reviewing this statement, you can check whether there are fees that shouldn’t be there. If there are, you have to start by contacting Square

Pricing Tiers

There are also differences in terms of hidden fees and transaction costs based on the business plan you have. Square has three business plans which all have the same cost per transaction. Where they differ are things like PayPal options, gifting options, real-time shipping, free domain names, and ad-free experiences. 

If you had the free version and switched to an upgraded “performance” plan, you might see a $26 charge each month. Similarly, if you downgrade from Premium to Performance, you might still see the Premium rate of $72 per month charged on the month you change your service, based on the date you switch. 

Standard Processing Fees

Square uses a standard processing fee for all transactions. This includes any time a card is inserted into the Square devices, swiped, or used for contactless payment. They charge 2.6% of the total transaction plus an extra ten cents. 

If you use a virtual terminal, a card stored on file, or a manually entered transaction, the fee increases to 3.5% plus a fifteen-cent fee. 

Square explains that manually entered transactions have a higher fee because neither the cardholder nor the card has to be present for the transaction to occur. If, for example, you have a card saved on file that you use, there is a higher risk that the issue might be argued over later. 

If you use Square to process and send invoices for digital payment, the invoices cost you 2.9% of the total amount plus thirty cents per transaction OR 3.5% plus fifteen cents per transaction if you use a stored card on file to process the payment. 

Things get more complicated when you process payments for CBD transactions. If you are selling CBD products, your prices are 3.5% plus ten cents for regular, swiped, or inserted transactions. The rate increases to 4.4% of the total transaction plus fifteen cents if you use a card stored on file. If you use Square online, Square invoices, or API transactions, the rate is 3.8% plus thirty cents per transaction. 

You shouldn’t see any additional charges from the credit card companies themselves, as that is built into the fees for using Square, and every card comes with the same rate. Still, there might be times when you find something that doesn’t make sense. 

What can I do if I was incorrectly charged a fee by Square?

If you find something on your fees or statement that shouldn’t be there, and getting ahold of customer service isn’t working, you might try contacting the Square corporate office. If they don’t help, you have two other legal options:

  1. The first is to use small claims court to sue Square. This is something usually described in your user agreement, and it takes a lot of time and effort. The amount of money you can get in compensation is based on the state where you live. However, it might be a viable option. 
  2. The second is to use consumer arbitration. Consumer arbitration is legally binding and usually gets faster results.

Share your complaint about Square with FairShake today. 

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