Square Account Deactivated? How to Fix It

Why Square Deactivates Accounts

Square is more conservative than Stripe or PayPal because they focus on low-risk retail and small businesses. Common triggers:

What Happens When Square Deactivates Your Account

Temporary Hold (5-30 Days)

Square places a hold on your account while investigating. During this time:

• ❌ Cannot process new transactions
• ❌ Cannot withdraw funds (balance held)
• ✅ Can view transaction history
• ✅ Can export customer/order data

Rolling Reserve (10-120 Days)

For high-risk situations, Square holds funds for 10-120 days after last transaction:

• Standard: 10% of transactions held for 30 days
• Medium risk: 25-50% held for 60 days
• High risk: 100% held for 90-120 days

Permanent Deactivation

Square closes your account permanently. Common reasons:

• Selling prohibited products after warning
• Chargeback rate >1.0% for 2+ months
• Fraudulent activity detected
• Misrepresenting business type during signup
• ToS violations (fake reviews, trademark infringement)

Important: Square typically holds funds for 90 days minimum after deactivation, regardless of risk level.

How to Appeal a Square Deactivation

Step 1: Check Your Email for Reason

Look for email from account-review@squareup.com or risk@squareup.com. Common messages:

Step 2: Submit Your Appeal

Email account-review@squareup.com with subject: "Appeal: Account Deactivation - [Your Square Email]"

Step 3: Timeline & Success Rates

• Initial response: 5-10 business days
• Review period: 10-21 days
• Success rate for prohibited business: <5% (Square rarely makes exceptions)
• Success rate for chargebacks: 20-30% if you can prove prevention measures
• Success rate for verification issues: 50-60% with proper documentation

Step 4: Escalation (If Denied)

If Square denies your appeal, limited options:

Option 1: Better Business Bureau Complaint

File at bbb.org → Search "Square, Inc." → File Complaint. Square responds within 10-15 days.

Success rate: ~25% for verification issues. <5% for prohibited business violations.

Option 2: Request Fund Release

If Square won't reactivate but is holding funds >90 days, email requesting release:

Square Alternatives

If Square permanently closes your account, here are your best alternatives based on business type:

For Retail/In-Person (Similar to Square)

• Clover: Full POS system, similar hardware, accepts more business types (3.5% + $0.10)
• SumUp: EU/UK focused, lower fees (1.69% in-person), accepts CBD/supplements
• PayPal Here: Mobile card reader, integrated with PayPal account (2.7%)
• Stripe Terminal: In-person payments with Stripe's infrastructure (2.7% + $0.05)

For E-Commerce (CNP Sales)

• Stripe: Best for online, more flexible than Square (2.9% + $0.30)
• PayPal: Widely recognized, good for international (2.9% + $0.30)
• Authorize.net: Traditional gateway, enterprise-grade ($25/mo + 2.9% + $0.30)

For High-Risk Businesses (Prohibited by Square)

• PaymentCloud: CBD, supplements, subscription models (3.5-6.9%)
• Durango Merchant Services: High-ticket, info products, coaching (3.95-7.5%)
• Easy Pay Direct: Offshore, highest risk tolerance (4.5-8.5%)
• PayKings: Accepts 99% of businesses, US-based high-risk (4.5-7.9%)

How to Avoid Square Deactivation

1. Only Use Square for Approved Business Types

Square is designed for:

• ✅ Physical retail stores
• ✅ Restaurants and food service
• ✅ Professional services (salons, contractors, etc.)
• ✅ Local businesses with in-person sales

Not ideal for: Drop shipping, digital products, high-ticket online sales, subscription businesses, international sales, any prohibited industries.

2. Keep Chargeback Rate Below 0.5%

Square's threshold is 0.6% (vs 0.75% for Stripe). Best practices:

• Use Square's built-in fraud detection
• Require signature/PIN for transactions >$50
• Send receipt emails immediately
• For online sales: add tracking and delivery confirmation
• Respond to disputes within 48 hours

3. Maintain Accurate Business Information

Square verifies against public records. Ensure:

• ✅ Business name matches EIN/state registration
• ✅ Address is physical location (not PO box or virtual office)
• ✅ Phone number working during business hours
• ✅ Bank account name matches business name
• ✅ Using Business account (not Personal for business use)

4. Monitor Square Policy Changes

Square updates their Seller Agreement and Prohibited Business List regularly. Missing a policy change = deactivation.

5. Gradual Volume Growth

Don't spike 5x overnight. Square flags unusual patterns. If planning a big sale or launch:

• Email Square support 7 days in advance
• Explain expected volume increase
• Provide campaign details
• Request account flagging to prevent automated holds

6. Use In-Person Sales When Possible

Square loves in-person transactions (lower fraud risk). If you're 80%+ card-not-present sales, Square may flag you. Consider:

• Using Stripe or PayPal for online sales
• Keeping Square for in-person/retail only
• Multi-processor strategy (Square for POS, Stripe for e-commerce)

Can You Open a New Square Account?

No. Square bans by SSN/EIN, not just email. If your account is permanently closed:

• ❌ Cannot create new account with same SSN/EIN
• ❌ Cannot create new business entity with same owners
• ❌ Using someone else's identity = fraud (federal crime)

Solution: Move to alternative processors (see recommendations above).

Get Expert Guidance

Dealing with Square deactivations, appeals, and finding alternatives can be complex. Use AI to get instant answers:

Key Takeaways

• ✅ Square is NOT for high-risk businesses—use Stripe, PayPal, or high-risk processors instead
• ✅ Appeals rarely succeed for prohibited businesses (~5% success rate)
• ✅ Chargeback threshold is 0.6%—keep rate below 0.5% for safety
• ✅ Funds held 90+ days after deactivation—plan cash flow accordingly
• ✅ Cannot create new account if permanently banned (SSN/EIN ban)
• ✅ Have backup processor ready before deactivation happens