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Square Closed My Account All of the Sudden
Imagine (maybe you don't have to imagine?) a small business that has been using Square for all its payment processing needs, handling everything from in-store sales to online transactions. One day, without warning, the business owner receives an email from Square stating that their account has been shut down. The reason given is a vague explanation that their account was flagged for high-risk activity. Suddenly, the business can no longer process credit card payments, leaving them in a bind. They’re unable to accept payments from customers, which disrupts their cash flow and creates frustration for both the business and its customers. The business owner scrambles to find an alternative payment processor, but the unexpected closure has already caused significant operational challenges, potentially leading to lost sales and damaged customer relationships. If this sounds familiar then this article is for you.
Why Does Square Close or Deactivate Merchant Accounts?
So you’re running a thriving small business, and Square has been your go-to for processing payments. Everything is going smoothly until, out of the blue, you receive a notice from Square that your account has been deactivated. The reason? Square’s system flagged your account for what they consider high-risk activity. Maybe you had a sudden increase in sales, or a few more chargebacks than usual. Whatever the reason, Square’s algorithms detected something that seemed out of the ordinary.
To make matters worse, your business might fall into a category that Square views as high-risk, even if everything you’re doing is completely above board. Or perhaps there was an issue with the information you provided when you set up your account, or your business activities slightly crossed into a prohibited area under Square’s terms of service. Regardless of the reason, the result is the same: your account is suddenly shut down, leaving you scrambling to find an alternative way to process payments and keep your business running smoothly. This unexpected disruption can lead to lost sales, frustrated customers, and a significant amount of stress as you work to resolve the issue and get things back on track.
Here is full list of reasons Stripe might close, freeze or suspend your account.
As we’ve highlighted above, Square may deactivate a merchant’s account for a number of different reasons, usually related to risk management, compliance with their policies, or violations of their terms of service. Here’s a comprehensive list of common reasons why Square might take such action:
High Chargeback Rates: An excessive number of chargebacks can signal to Square that your business is high-risk, leading to account deactivation.
Prohibited Business Activities: Engaging in business activities that are on Square’s prohibited list, such as selling certain types of adult content, firearms, or engaging in gambling, can result in account closure.
Violation of Terms of Service: If you infringe Square’s terms of service, such as by providing false information during account setup or engaging in activities that aren’t permitted, your account could be deactivated.
Suspicious or Fraudulent Activity: Square’s algorithms scan for potentially fraudulent activities, such as sudden jumps in transaction volume, unusual transaction patterns, or activities that deviate from your normal business operations. These could trigger a freeze or closure of your account.
Excessive Refunds: Similar to chargebacks, a high volume of refunds can indicate problems with your business and may lead Square to suspend or close your account.
High-Risk Business Category: If your business falls into a category that Square deems high-risk, even if not explicitly prohibited, they may deactivate your account as a precautionary measure.
Inaccurate Business Information: Providing false or incomplete information about your business, or failing to update your business information when required, can lead to account deactivation.
Unusual Transaction Patterns: Significant changes in your transaction patterns, such as a sudden increase in the average transaction amount or a large number of transactions in a short period, can raise red flags and lead to account suspension.
Regulatory Compliance Issues: Square needs to comply with various financial regulations, including anti-money laundering (AML) laws. If your account raises compliance concerns, it might be deactivated to mitigate legal risks.
Multiple Disputes: If your account receives a significant number of disputes or customer complaints, Square may see this as a risk and decide to deactivate your account to avoid further issues.
What Happens When Your Stripe Account is Closed, Frozen or Suspended?
If you are here reading this, it’s likely that square deactivated your account. We know from extensive experience working with merchants that it can feel like a broadside, especially when you are trying hard to do everything right. Unfortunately, the path to getting back in good standing with square can be long, which is why we recommend having a backup processor like Durango Merchant Services, which has the double benefit of increasing your processing volume and preventing devastating paralysis in payment processing for your clients. Below is a scenario that reflects the path our clients often have to navigate when square deactivates an account.
We’ll take the example of Sarah, who owns a thriving online boutique specializing in handmade jewelry. For years, she’s relied on Square to process her payments—both in her online store and during the many craft fairs she attends throughout the year. Everything’s been running smoothly, and her business is growing steadily. Then one day, out of the blue, Sarah logs into her Square account only to find an alarming notification: her account has been deactivated.
At first, Sarah is confused. She doesn’t recall doing anything out of the ordinary, but as she digs into the email from Square, she realizes that her recent success might be the issue. Over the past month, she’s had a significant uptick in sales due to a feature in a popular magazine. This sudden surge in transactions, combined with a few more chargebacks than usual from customers who changed their minds after purchasing, likely triggered Square’s risk management system.
Now, with her Square account deactivated, Sarah’s online store can’t process any payments. She’s also scheduled to attend a big craft fair in a few days, and without her Square account, she won’t be able to accept card payments, potentially missing out on hundreds of sales. Frustrated and anxious, Sarah immediately contacts Square support, hoping to resolve the situation quickly.
Square’s support team informs her that her account was flagged for unusual activity, which is why it was deactivated. They request additional documentation to verify her business’s legitimacy and proof of recent transactions. Sarah scrambles to gather all the necessary paperwork, including invoices, proof of product delivery, and explanations for the recent chargebacks.
While waiting for Square to review her case, Sarah realizes the importance of having a backup plan. She quickly sets up an account with another payment processor to ensure she can still take payments at the upcoming fair. However, the process of transitioning is stressful and time-consuming, and she worries about how long it will take to get her Square account reinstated—if that even happens.
As days turn into weeks, Sarah still hasn’t heard back from Square. Her cash flow is disrupted, and she’s forced to juggle customer inquiries about why certain payments aren’t going through. The experience is a wake-up call. Even though Square was a convenient and easy solution, she realizes that relying solely on one payment processor can be risky.
Eventually, Square responds, and after reviewing her documentation, they decide to reinstate her account. But by this time, Sarah has already experienced significant stress, lost sales, and a tarnished reputation with some customers. She decides to keep her new payment processor as a backup and to diversify her payment options going forward, ensuring that her business isn’t left in the lurch again.
What Should I Do If Stripe Closed My Account?
If Square deactivated your account, it’s important to act quickly to minimize disruption to your business. Here’s a step-by-step guide on what to do:
1. Understand the Reason Square Deactivated Your Account
Check the Notification: Square typically sends an email or notification explaining why your account was deactivated. Review this information carefully to understand the reason behind the action. It could be due to high-risk activity, chargebacks, or a violation of Square’s terms of service.
2. Contact Square Support About Why They Deactivated Your Account
Reach Out To Square Immediately: Contact Square’s customer support to get more details about the deactivation. Be prepared to provide any additional information or documentation they might request. Keep your communication professional and focused on resolving the issue.
3. Gather and Submit Documentation
Provide What’s Needed: If Square requests documentation to verify your business activities or transactions, gather everything promptly. This might include invoices, proof of delivery, explanations for chargebacks, or any other information that can clarify your situation.
4. Look For Other Payment Processing Providers
Set Up a Backup: While you’re working on resolving the issue with Square, it’s crucial to keep your business running. Consider setting up an account with an alternative payment processor, such as PayPal, Stripe, or another service, to ensure you can continue to accept payments without interruption. Providers like Durango Merchant Services can help you get back on your feet and work with you one-on-one to make sure the rug isn’t pulled from underneath you again.
5. Audit Your Business Practices
Ensure Compliance: Take this time to review your business practices to ensure they align with Square’s terms of service. Look into what triggered the deactivation and make necessary adjustments to avoid future issues. If that is not possible, the best course of action is to contact a high risk merchant account provider like Durango Merchant Services. We can guide you through the possible pathways to secure credit card processing with lower risk of future cancellation.
6. Keep Detailed Documentation
Keep Records: Maintain detailed records of all communications with Square, including emails, support tickets, and any documents you submit. This documentation can be valuable if you need to escalate the issue or take legal action.
7. Prepare For The Long Term
Diversify Payment Options: Even if Square reinstates your account, consider diversifying your payment processing options. Having multiple processors can protect your business from future disruptions and provide more stability. Durango Merchant Services is here to offer you advice on how to secure a high risk merchant account or a standard merchant account. If you need to open multiple accounts we have created a guide to getting higher processing limits.
8. Stay Updated on Policies
Monitor Changes: Keep yourself informed about any updates to Square’s policies or terms of service. Understanding these changes can help you stay compliant and avoid similar issues in the future.
Does Stripe Reinstate Accounts That Have Been Closed, Frozen or Suspended?
Whether Square reinstates accounts that have been deactivated, closed, or suspended depends on the specific situation surrounding the account’s status. In some cases, Square may reinstate accounts if the issues that led to the deactivation are resolved. For example, if the deactivation was due to incomplete or inaccurate information, providing the required documentation or clarifying the situation may lead to reinstatement.
However, reinstatement is not guaranteed, especially if the account was closed due to violations of Square’s terms of service, involvement in prohibited activities, or if the account is considered high-risk. Accounts that are permanently closed due to serious breaches or ongoing risk issues are unlikely to be reinstated.
Merchants who believe their account was deactivated in error or who have resolved the issues leading to the deactivation should contact Square support to discuss the possibility of reinstatement. In some instances, appealing the decision or providing additional information can lead to the account being reopened.
It’s important to note that the process can be lengthy and not all requests for reinstatement are successful. Therefore, we emphasize that it’s advisable to have a backup payment processing solution in place to avoid significant business disruption.
While Stripe does have a process for reviewing and potentially reinstating accounts, many merchants report that once an account is closed, it can be difficult to have it reopened. Stripe’s decisions are often final, particularly in cases involving significant risk or violations.
Durango Merchant Services is Here to Make Sure You Can Continue to Process Electronic Payments.
If Square closes your account, transitioning to Durango Merchant Services offers several key benefits that can help stabilize and improve your payment processing capabilities.
1. High-Risk Merchant Services Expertise
Durango Merchant Services specializes in providing payment solutions for high-risk businesses, which often face challenges with traditional payment processors like Stripe. This expertise means they are well-equipped to handle industries and business models that might be flagged as high-risk, ensuring you have a reliable payment processing partner even if you’ve faced account closures elsewhere.
2. Flexible Payment Gateway Options
Durango Merchant Services offers flexible and customizable payment gateway solutions. Whether you need a gateway that supports advanced fraud prevention tools, recurring billing, or multi-currency processing, Durango has options to fit your needs. Their gateways can be integrated seamlessly into your existing systems, reducing the hassle of transitioning from Stripe.
3. Gateway Emulator Feature
One of the standout features of the Durango Pay Gateway is the gateway emulator, which allows you to switch to Durango’s services without extensive reprogramming. This tool emulates the behavior of your previous gateway, making the transition smooth and minimizing disruption to your business operations.
4. Dedicated Support and Service
Durango Merchant Services prides itself on offering personalized customer support. Unlike the often impersonal service provided by large payment processors, Durango assigns dedicated account managers to help you navigate any issues and optimize your payment processing setup. This hands-on support can be invaluable, especially if you’ve recently faced the challenges of an account closure.
5. Comprehensive Fraud Prevention
Durango provides robust fraud prevention tools and services, helping you protect your business from chargebacks and fraudulent transactions. Their advanced monitoring systems and customizable security settings ensure that your transactions are secure, giving you peace of mind and reducing the risk of future account closures.
6. Competitive Rates and Transparent Pricing
Durango offers competitive processing rates and transparent pricing structures. They work with you to create a pricing plan that suits your business model, potentially lowering your processing costs compared to what you might have experienced with Stripe.
7. Alternative Payment Options
With Durango, you can offer a wide range of payment options to your customers, including ACH, e-checks, and various credit card types. This flexibility can help you cater to a broader customer base and improve your overall sales.
8. Experience with Recovery and Transition
Durango Merchant Services has extensive experience helping businesses recover from account closures and transitions. Their team can provide strategic advice and practical solutions to get your payment processing back on track quickly and efficiently.
Switching to Durango Merchant Services after a Stripe account closure can provide stability, support, and flexibility. Their expertise in high-risk industries, combined with robust fraud prevention tools, competitive pricing, and dedicated customer service, makes us a strong alternative for businesses looking to secure their payment processing and avoid future disruptions.
For more information, visit Durango Merchant Services.
