Shut Down by Square: What Now?

Whether you're a seller who received their Square Account closed or an app user who'd like to know more about this situation, we’re here to help.
Redde Payments
5 min to read

When you've received an email from Square saying that your account has been closed, you're likely surprised by this news. After all, there's no reason you think that should happen. Your app is in full compliance and you've not run a business on the platform that is outside of their terms of service. If they have closed your account, they will state why they have done so in the email. But what do you do now? By first understanding what happens and why it happens we can better understand our options. Let's dive in:

What happens when your account is terminated?

Square account closures often start with an email notifying you that your account has been shut down. This means that they are unable to continue servicing you and your business. This can occur for a number of reasons, but it's important to understand that their decision is permanent.

If you didn't receive this email or if you don't have access to the email associated with your Square account, you can contact their support team by calling (855) 700-6000. When an account is shut down, Square places a hold on any funds that you may have processed with Square for (180) days. They do this because, as a payments processor, they’re required by card networks to prevent fraud by holding funds in order to cover any potential disputes or chargebacks that may arise from those transactions. You can find more information about these requirements by referring to Square's support page.

After the hold period ends, they will release any remaining funds owed to you via direct deposit into the bank account listed on your Square Dashboard. One thing to keep in mind is that if there are disputed transactions in your account when it's shut down, they will be charged back after the 180 day hold period ends and deducted from your remaining balance.

Why would Square terminate a merchants' account?

Square is an easy and convenient merchant services provider, but as a business owner, you may not have much power to control your relationship with Square. That's because the company has broad discretion to suspend or close your account for almost any reason it wants, whether or not you are doing anything wrong. According to Square’s terms of service, the company can terminate your account for “any reason or no reason at all” and is under no obligation to warn you before doing so (Section 12. Modification and Termination).

This means that if Square decides to shut down your account, there is little you can do about it, and the company does not have to provide any explanation. In cases where it does provide a reason, Square typically cites high chargeback ratios. In other words, too many of your customers are disputing their purchases or claiming that they received defective goods. If this happens to you and Square closes your account without providing an explanation, it can be extremely disruptive to your business. In some cases, you may not be able to make sales until you find another payment processor. Here are some common reason's on why Square might have terminated your account:

  • You haven’t been processing with Square for 90 consecutive days.
  • You’ve violated their Terms of Service, Acceptable Use Policy or any other policy.
  • Your account is overdrawn and you have insufficient funds in the account to cover transactions held.
  • You have excessive chargebacks or disputes on your account.
  • Your financial information is inaccurate or cannot be verified.

What to do if Square shuts down your account?

If you've had your Square account shut down, here is what you should do:

  1. Be sure to read the email that Square sent you thoroughly. Make sure that the account they are referring to is the one that you think they are.
  2. Check all of your bank accounts to ensure that Square has returned any funds that they held in reserve back to your business bank account. If you don't see any money coming back, contact Square and let them know about it.
  3. If there were transactions that were not completed at the time of shut down, go ahead and process them using another payment provider.
  4. If possible, try to get a new merchant account with another processor and use their virtual terminal to issue refunds to your customers for any chargebacks or other negative transactions on your closed account with Square.

Will Square reactivate my account?

In general, you probably won't be able to get your account reopened, but you may be able to sign up for a new one. As mentioned before, if Square terminates your account, they will send you an email letting you know why it was terminated, and that you're welcome to open a new account with them. If your account was terminated because of activity that Square didn't like (fraudulent activity or selling questionable products) you won't be allowed to reopen that account again. But if your account was simply closed due to inactivity (not using the card reader for example) or because your business changed in some way, then reopening an existing account and resuming use of it might be possible.

If a merchant account is terminated, it's not likely to ever be reopened again. But never say never. There have been some merchants that have had their account terminated and then reinstated after a few successful months without any problems. The likelihood of this happening is slim though, so don't plan your business's future around it unless it seems like a realistic option. Instead, you should try using an different payment provider who can get your up and running fast to prevent any further loss of business.

Why you should switch from Square to Redde Payments?

Our creators and founders have been in the payment processing industry for over a decade.  We've seen everything from hidden fees, bad contracts and unmet promises.  Redde is our way of changing the industry for the better.

Our promise to you:

  • No long term contracts – We're so confident that you're going to love our service that we don't require a contract.  If you're not happy with us, you can cancel at any time.
  • No cancellation or early termination fees – You'll never be hit with a cancellation fee should you decide not to use our service anymore.
  • Your pricing will be transparent – Our easy-to-find pricing means you will always know exactly what you are paying for.
  • No bots, EVER – We're different than the others. We don't hide behind automated agent answering systems. No recordings or robots - you'll speak with an actual customer service representative who will answer your questions and give you advice that is just for you and your needs. Give it a try, message us through our website chat and talk to a real person!


If you're a business owner, you deserve better than Square. Square is losing a lot of ground to its competitors. Alternative providers like Redde Payments offer much friendlier and more helpful support staff, with actual human beings you can call on for assistance instead of automated chatbots. Even better, there's no contract required or penalties for cancellation. If Square is giving you headaches and frustrating you to no end, consider switching over to Redde. Your customers will thank you.

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