Report: Square Holding Funds on Business For 120 Days With No Chargebacks or Problems


A small business owner forwarded us an email they received from Square that describes a policy to protect its cash flow in favor of small businesses maintaining liquidity during this coronavirus crisis.

The business owner noted he has no payment disputes or chargebacks, and even after contacting Square’s customer service regarding this issue, they confirmed his account is in good standing with no issues.

Furthermore, he said that none of the links provided by Square worked nor do the directions the payment processor provided to find the “Reserve Report” on his home page or dashboard work.

Square’s Email

We realize this is a challenging time for many business owners, and we remain committed to supporting you.

Like other payment processors, we periodically review your sales to assess the risk of payment disputes. In a recent review of your account, we determined that we have to hold a portion of your transfer in a reserve balance. Beginning <redacted>, 30% of each transaction on your Square account will be stored in your reserve balance, and will be released 120 days after the original transaction date.

What is the function of a reserve?
This reserve is a percentage of your processing volume that is set aside for a specific period of time to protect you and Square from unexpected loss events.

How do we make this decision?
We apply a reserve based on several different factors, including but not limited to:
• Goods or services that may be more prone to receiving payment disputes
• Length of time you’ve been processing payments with Square
• Business documents we may have on file

How does this affect my business?
This does not affect your ability to accept payments in any way. Your reserve balance exists as added protection in the event you receive a payment dispute from a customer and there aren’t enough funds in your linked bank account and available Square balance. That’s when the reserve balance is there to help.

Where can I learn more?
You can find more information along with the current balance of your reserve in your Reserve Report.

Can my reserve change at any point?
We’ll keep an eye on your account and conduct periodic reviews to determine if your reserve should be modified or removed entirely. Of course, we will always notify you of any changes. And you can also find more detail in our Terms of Service.

Why is This Email Troubling?

When the business owner contacted Square’s customer service, he told us they provided no additional information regarding this matter. He wondered why a business with no chargebacks or payment problems is singled out under this policy.

According to him, the company did not give him a specific reason or performance metric that should have triggered the policy, an apparent complete lack of transparency by Square on this matter.

During a time when many companies are trying to help small businesses survive these challenging times, it appears Square is applying non-challengeable actions against small companies with little notice and provides no recourse or actionable details.

This begs the question, why does Square feel the need to hold funds in a reserve account (escrow account) when the merchant account is in good standing?

Recently, Square warned investors it was facing a declining payment processing environment due to the coronavirus outbreak.

Square is a popular payment processor for many small and micro-businesses that require point-of-purchase and online payment processing.

The company’s payment processing service has become a go-to solution for many entrepreneurs as it provides modern integrated off- and online services.

Presumably, many of its customers fall into non-essential business categories and are dealing with rapidly declining sales or a complete business shut-down because of coronavirus stay-at-home orders.

Therefore, Square’s warning about its declining gross processing volume (GPV) may show the company is concerned about its cash balance as it is expecting a larger than normal refund and chargeback volume.

Square Policy Appears to Favor Its Liquidity Over Small Businesses

Since none of the links or directions provided to the business owner to access this “Reserve Report” work, this seems to suggest this is a new policy, hastily enacted by Square.

Unlike small businesses who have to box their way through the narrow door to SBA coronavirus relief programs, public companies have access to capital markets to raise cash if needed.

While card processors and banks may have to deal with more chargebacks during this time of crisis, even in its warning to investors Square still expected a profit.

It doesn’t make any sense for Square to hold funds on accounts that have a perfect record and it seems to be a very Draconian and not a very well thought out plan.

The only conclusion that can be drawn from this action is that Square is more concerned about its liquidity than the liquidity of the small businesses it serves.

READ MORE: Credit Card Processor Square Faces Lawsuit Over Merchant Payment Holds

Have you received a similar notice from Square? We would love to hear from you and we’ll keep your identity confidential.

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  1. I am dealing with issues with Square. They are hold 100% of my transactions for over a week now with not 1 communication explaining why. I have nearly 10k be held or “ suspended “ for no reason. I have emailed just to get an email back after waiting over 24 hours that said they would have someone email me. I have tried every kind of communication platforms to reach out and have no response. As a small business this is putting me in a financial nightmare not being able to use these payments to pay my bills. Not having any idea when or if I will ever be able to get my money. With no explanation why they are holding funds.

    1. I have the same issue. My account was suspended with no explanation. 7606.00$. Been trying to talk to a human for three weeks. Zero results.

      I’m not wealthy, I’m not tach savvy. Just a small business guy that needs that money to take care of expenses. It’s not crippling, but is close.

      The lack of service from one of the worlds giants is telling. Hopefully I’ll find a solution ASAP.

      Done with apple and any product related to them.

      1. Did u talk to anyone yet. Do u have a number to call. My money been on hold for over 90 days now

      2. They did the same thing to me, they even sent me a tax form to file with my taxesas of I really received the money, this was 2 years ago. I filed a complaint with the better business Bureau and the very next day I recieved an email from square I replied questioning why I never recieved my funds after the waiting period and they instructed me on what to do and I recieved my funds the very next day

    2. Same thing happening to me, don’t understand why they let me open an account and accepted my payments only to hold my funds, cancel my account without a clear explanation… I only talk to bots, my money has been in hold with them for 30 days… They don’t reply my emails, and don’t let me message them. When I call, they say my account has been canceled and Im not able to talk to a real person

      1. Darina Weathers says:

        They did the same to me. I opened my account over 30 days ago, and transferred money from my personal to square. They closed my account, without explanation, and is STILL holding my money.

    3. Eric Armada says:

      Same here. I have small handyman business and square is holding my $3,100.00 for 120 days!! I’m going to seek legal counsel!! This company disregard for small business owners is not gonna going to go unnoticed or unchecked!

      1. Elizabeth McQueen says:

        How was the outcome, did you get help?

    4. Cheri Henry says:

      I received a email from square that said they deactivated my account and there was know reason. I have to girls on there way to college and, I my be evicted and not have any car insurance because of this and I don’t know what to do. I’m lost at this point. Crying out for help asap.

    5. TeiAndra Simmons says:

      I’m going through this same exact thing, square is holding my funds for 30 days but will not reply to me through email or answer the phone for me. This is very devastating for me and my business. I have no clue how I’m about to pay my bills. I also believe this is illegal.

      1. *Update* thank God I had a separate business account but this was a huge inconvenience however it did take me about 6+ months to get my funds.

    6. Troy flora says:

      I have had all funds held since March 25 2021, now and of October. No notice, no customer service. I’ve even mailed correspondence to square.
      Can call me 7573595245
      Troy flora

    7. Omg
      I was on the phone with customer service
      Everything you said, is what my son is experiencing.
      The customer Service person was doing a mantra
      Of sorry I cannot get hold of a supervisor, I can only escalate this complaint.
      He repeated his training over and over.
      My son was so upset, swore and hung up.
      I looked this site up for help for him.
      I see this really is not a good fit anymore.

      I had a friend who used some years ago, but this company has made their own rules without the need to be transparent these days.
      This square sounds more like a mafia.

    8. I just had a transaction totaling almost $13,000 held and would be happy to provide details. This is an abusive financial practice and it needs to be called out.

      1. Pamela Watson says:

        Since Feb. 2022, Square has held my funds of $24,488, same mantra and bs. Good account, funds were available for transfer and I forgot my bank had a deposit limit of $5000. When my scheduled deposit wasn’t transferred I tried to instantly transfer $10,000 so it threw it back under review and now they’re withholding my money and not communicating with me. This is a complete devastation to me. That was a one time payment for a year of work with a hospice patient whom provided payment to me through his trust after his death. Now, he’s dead, the trust account is closed, I have no money, I had to get food stamps to eat and my device blew up from a bad battery. I am completely f…d and have no words. They just don’t communicate. They seem to only care that they have funds available to them if they need to bailout and we can piss off.

    9. This platform stole a lot of money from me. Do NOT use this app..

    10. wow talk about being ripped off, just found out my card payment provider SQUARE has not paid me what iam owed since 10th jan, they owe me over 2500 pounds, and it seems they are not in hurry to forward the funds, this is daylight robbery, i see lots of other small businesses are having same problem, and some are signing petition, and trying to raise a law case, im gutted. AVOID SQUARE !

    11. I have had this going on now for 2 weeks it’s $30k I’m at a loss as to what to do.

  2. Any sane person shouldn’t deal with square, cos they just foul you and ridiculously hold you up for 90 days and when you call after 90 days , they say additional 30 days… it’s too ridiculous that they don’t care if your whole life depends on it, your health or your family , you could literally watch own people die just cos they wanna be about they damned policy

    1. Steven fan says:

      After the additional 30 days did you receive your money from them?

  3. I believe that I know exactly WHY Square developed a “policy” in order to HIGHJACK other peoples’ money, I will get to that after I give you a little backstory, I was days new to Square last August, 2020. and still learning to navigate the site, invoicing, get paid, everything, etc.. With no warning or any questions asked, Square abruptly deactivated my account the day of my first payment. I was not immediately aware, but when I saw that my balance did not transfer to my credit union, I emailed them because the hold at that time was more than 2 hours. I eventually found the initial email telling me that I had violated strict policies and that they were placing my entire balance in reserve until I refunded the money to the customer OR the funds would be held for 180 days max but no less than150 days! They also promised that whatever is left in my balance at the end of the 180 days would automatically be refunded into the linked bank on my account. Unfortunately, my elderly customer paid with a “Prepaid DEBIT Visa GIFT Card” and since his balance on that card was $0, yeah, he had already trashed it just before the waste company came to pick up his one and only can! I promptly asked Square in an email how I should proceed but my attempts to connect or get a response fell on blind eyes and deaf ears. It has now been OVER 6½ months which is over 2 months past the 180 MAX hold. So, now not only has Square violated their own policy, but they have been collecting interest on MY hard earned lil dollars for more than half of the COVID-19-drenched year! I recently sent them an email requesting for them to transfer these funds immediately as they said they would and to also include ALL gains/interest accumulated from these funds, It may be too soon to expect a response. I’ll see.
    IMO: To me it is obvious that there could be only one despicable and possibly criminal reason WHY Square would HOLD/invest hundreds, or thousands, or perhaps maybe even hundreds of thousands of OTHER PEOPLE’S money! Come on, think!…. Okay, you with me now?! Hm, does Square operate all over the world? Wait, just “who” is Square anyway? Jack. OMG, WHAT exactly would Jack DO with all of that “easily stolen/borrowed money anyway? THIS IS EXACTLY WHAT THEY WOULD ” DO” … OPEN HIS VERY OWN _____ ! See for yourself where OUR money is now being held in reserves (this “policy” conjured by Jack and his Attorneys HAS to be criminal and punishable by law, but, will it ever happen to someone like him?)… https://www.engadget.com/square-bank-004443129.html SOMETHING HAS TO BE DONE TO STOP SQUARE! BUT DON’T GIVE MONEY TO CHANGE. ORG THEY’RE ALMOST AS CRIMINAL!

    1. Troy flora says:

      Me too. Same situation.

  4. Rev. Sheri says:

    I am having an issue with Square right now. I found this article while looking for others having issues. Apparently they have been accepting payments while keeping my balance at zero. They owe me almost $800! Now a person in the Philippines has claimed their purchase was fraudulent (because they are mad they haven’t yet received their purchase – Yay Covid!), so Square is now taking money out of my business bank account … while also keeping my $800 for themselves!

    When I ask where my money is via email, they don’t respond. I tried calling them, and there is a recorded message basically saying they are no longer allowing me to use my account. (Though they were accepting money from my customers – until I removed the software from my website!!!) Can you say class action law suit!?!

    My company sells conscious products and works with charities to make the world a better place … how am I a bad company to work with? No, Square is doing something wrong … something very wrong!

      1. Same here over 5000 dollars they keep moving the transfer date.

        1. Same thing here a year later.

    1. I agree on the class action lawsuit. I’m out over $9,000 with no communication from them whatsoever. What can be done?

      1. Alfred Garcia says:

        Me and my wife started a CBD business and they have all our money on hold. What other vendor should we all switch too? Let’s take our business away from these fools

      2. Yakita king says:

        Same here I was paid 9,000 through square it’s on hold they’re not giving me no reason it’s been 30 days now

  5. I have not had a deposit from Square since May!! That’s 5 months!! They are holding over $9,000 of my money and I can’t get anyone to talk to me or respond in any way! I think I need to get a lawyer. This is fraud. I need my funds.

  6. Just today they told me that I had to have an actual location, I have been using square for three years as a small mobile business with not a single issue, I am not only broke, but already purchased my airline ticket to move to Florida.
    This is devistating!

  7. Brandon Applewhite says:

    I’m the same boat, how do I get help to get my funds??

  8. Square has not deposited my money into my account because they deleted my account and say that I did it. I have had a account in excellent standing for over 5 years. As of September 14, 2021 they quit depositing money into my account. I use this to pay my lease and how can you pay if they have extorted our money? I have talked to over 9 people from different countries and gotten the same answer, it’s my fault and I have never done anything to change my account. They want to blame it on everyone but themselves and refuse to answer why all of a sudden NO MONEY. The training this company has is horrible and customer service is beyond ridiculous. I was accused of being racist because I asked to be sent back to the USA. I had a witness to 1 of many calls and she heard Dillion bullying me, and couldn’t believe how horrible he was. No amount of apologies could ever make up for this nonsense. If they transfer money back to you they charge a additional 1.5 % fee which is fraudulent. They messed up my account and they want me to pay for their mistakes. I had a manager mess it up to the point that I can’t do anything but cry out of shear anger. He was promising a call back last Thursday and never called or tried to fix what he personally said was a problem on their end. I have a witness to the conversation because I am learning because of “COVID-19” that no one wants to do the job they have. I absolutely think they should be investigated by the FTC AND ALL AGENCIES for fraudulent business practices. They want me to link my account but it will not link. Management avoids talking to us, so if anyone has a idea or files a class action lawsuit I am interested. Square is a ripoff and has the worst customer service ever. I am so mad at myself for ever doing business with such a horrible company. I have been working battling cancer while on chemotherapy and this is worse than dealing with cancer. Please help our small businesses find help in getting our money back. I am going to file a small claims case against them if I don’t have my money by this Friday. I will have to close my business after working for 40 years because they have my lease money. I can’t afford to come out of pocket after being closed down by COVID.

  9. Square has been holding my money since September 7 $9500 I need my funds
    Nothing is fraudulent about my account and it no one I can talk to. Do someone have a number I can call to speak to a representative ASAP. I need my funds

  10. Kacy Weaver says:

    My husband and I have a flooring company and we took 3 large payments with square up to $14,000. We we able to transfer $2000 and then we received and email say that they put our account on hold for 90 days and then we should receive our funds or we can refund to the customers. We were able to only refund one of the charges the second one said refund failed then tried to say it was transferred into our bank account which my bank verified that wasn’t true. So 90 days came and no money, today is 120 days and still haven’t released our money. I’ve emailed the company atleast 20mins with screen shots and proof that our money hasn’t been transferred and they sent us a email in the 90th day saying they were going to release it but still didn’t. Customer service hung the phone up on me the one time I got through because they said they can’t answer my questions. I would love to find a attorney that would help us get our money back.

  11. Same here…..square never released any of my money….they kept over 2000 dollars and when i call customer service the representive that barely speaks english told me that she was not in the united states….how is this possible for them to take so many peoples money????

  12. Rhonda Arevalo says:

    Me too! I had an account with them for 2 years and they did the under review email and I couldn’t contact them or anything. Luckily I had just withdrawn money and it was only $300 left. That was a year ago. I made a bad decision and tried again with my partners email and information and after 2 days I revived a transaction for $695 and a few hours later I received the under review and now my money is in square limbo! I literally did nothing wrong. I can’t call, or msg. I’m a mother of 7. I am barely making it. This is horrible and it’s close to Christmas 😭

  13. Class action settlement I hope is much greater than the 1,500 dollars they are holding off mine. Going Monday to see about filling a law suit. Square sucks and let’s make sure we’re posting it all over the place.

  14. Mohabeldin Mohamed says:

    Same same here they r holding 62,770$ since dec 14 ,omg I’m getting crazy and losing my life ,is anybody really got this done

    1. Ryan E. Bowers says:

      $62k? Man that sucks. Have you made an attempt in getting it back? They are holding $3k from me… if you haven’t gotten your funds back I’m thinking I stand no chance. I don’t know who you are using now… but try Redde Payments – trust me you’ll like them. I had a buddy refer them after Square put him through the ringer too. I hope you get your money back. Times are hard so having our money released would be so helpful.

  15. Kenneth B. says:

    Square closed my account and took my money before I even made a sale. The money in my account was added from my other bank so I could buy things for my business and have a paper trail. They told me 90 days; it’s been over 5 months. When I contact them via email I don’t get a reply; it’s like they robbed me and I have no recourse.

  16. Eric Barenz says:

    We are a small hotel in Treasure Island Florida and we have been hanging on by the skin of our teeth since March 2020. About 25% the small, independently owned, hotels went under over here during the pandemic. We have applied for every government program that was designed for our type of business and we only received one payment of a couple thousand bucks. We need every dollar we run through square but they suddenly started holding 20% of our sales. It’s so wrong I can’t express my anger without a comment full of cussing! We are finally getting busy and now they have $5K on hold for 4 months with no explanation. We have PayPal set up for our deposits for upcoming reservations but it looks like they are going to start getting our business.

  17. I used Square’s platform for my electrical business’ billing purposes. I recently received apayment for an invoice from a customer but noticed that I wasn’t able to transfer thefunds out of Square into my bank account. I contacted their help line and was told it wasa technical problem with the website which would be fi xed soon. However, a short timelater I got an email which said my transfers had been suspended due to “unusualactivity” on my account. I then had to submit a bunch of information to Square (customerdata, bank statements) so they could review my account for reinstatement. A few hourslater I got an email that said my account had been permanently deactivated and that Iwould not have my funds released for 90 days. No explanation or reason was given foreither the suspension or the deactivation. Square claims this is for the purpose of

  18. Erika Goode says:

    Same is happening to us currently.

  19. AVOID SQUARE ! they witheld 2600 pounds i havent been paid back from sales i took on their payment system , robbers !

  20. Amelia Pope says:

    Oh no, I’m in the same boat, I was told I had to wait “90 days” but I’m concerned now it will be much longer!
    Did ANYONE get their money back???

  21. Linda Catalina says:

    Thank you all for reporting your situations with Square. I was considering Square for my small craft company. Fortunately while researching the company I came upon this site. Thank goodness. I am beginning to think there just aren’t any honest corporations anymore. I sure hope you band together and sue the company. They are definitely corrupt.

  22. Jamie Armoto says:

    My issue is so absurd that I literally opened the account did 1 transaction for 1.00 to myself as a test and then got my refund deposited into it and the same day they locked my money and are telling me I have to wait 90 days to get it and the there is nobody else I can talk to. Furthermore one person told me it was because of a customer complaint which couldn’t have happened when I was the only transaction they are stealing our money at the very least drawing interest on my money

  23. Ryan E. Bowers says:

    So it appears that I’ve made it to the conversation late. I own a home renovation business and I was happy with Square as I’ve been using them since 2017. I’ve had no issues, no holds or any complaints out of the ordinary. Well the other day I found out my account has been closed with no warning or explanation. I’ve made SEVERAL attempts to reach out to them and they either can’t help or provide any reasoning which is incredibly frustrating. Luckily Redde Payments got me signed up fast because I was left without payments. It’s odd to me that you never hear of the horror stories until it happens to you. Does anyone know what to do? I’m incredibly happy with Redde, I don’t plan on going back… but they are holding my funds, so I’m not sure what to do.

  24. Rob adams says:

    It’s been more than 180 days and still they are holding is there any chance of getting back my money or any way to get it out.

    No proper reply from Customer support team.

  25. I own a residential facility and a trucking company and i use square. A tenant owed me 1800$ for the month but his card limit was 1000$ spending a day. We split the payment up in two day payment. Square flagged my account asked for all my documents and i complied. After submitting the tent receipts square continued to hold my money then forced me to refund the customer for no reason. There were no chargebacks reported but still i had to return the money. I told them that it would cause me an undue hardship to return money after my services were provided. They told me to give the tenant back his money and have him pay another way ?! WTF. After I returned the money the tenant did not pay me again. He claims the money never posted back to his account and it was true. Square forced a refund but never actually gave it back to the tenant. A NIGHTMARE!!!! Fast forward I accepted a $5000 payment for transport and delivery for a retail store and that too is being held up. Im reading these stories and im not sure I’ll get those funds back either what can we do about this?!

  26. Tara Bush says:

    March 2022 I open Square checking account, deposited two $300 checks and did nothing else. They immediately deactivated my account and are holding my money. So far 90 days with a notice yesterday for an additional 90 days due to “recent chargebacks”. How can I have chargebacks when my account was deactivated right after I opened it? Has anyone found a class action lawsuit yet? I find it hard to believe that no lawyer has stepped up to take on Square on behalf of all the money they have stole from us.

  27. Thomas Saye says:

    Square is not telling me they are holding or releasing. They have accessed the checking account multiple times now. Have not given any reason nor determination.

  28. My cousin and I own a small mobile detailing company and Square just blocked us for 120 days and seized our funds made this week. We called customer support very kindly and got absolutely NO response as to why this is happening…… Basically told us bad luck and to get over it……… Shady AF.

  29. I read almost every comment and all the stories sound the same including what just happened to my husband. Same thing, a payment was accepted by square and then his account was deactivated. No live person to connect with, just an email saying that his funds will be returned after 120 days. I find it insane that a company will give you no reason for deactivating your account, and then keep your money.
    You cannot speak to a live person and whatever moron they have in their chat, cannot help you.

    Is there a class action lawsuit open against these bastards?

  30. Square deactivated my account without any explanation. When I called they said the decision is final and my funds will be released in 90 days….$19,000.00! No supervisor to talk to, no complaint department, no answers. Customer service was not helpful and disconnected the call because I didn’t have any other questions.

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