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What products and services does Square support?

Summary

Square supports a wide array of products and services, but not all of them. Before using Square, make sure to read the fine print and understand Square’s limitations.

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Dear Your Business Credit,

I am thinking of using Square to sell some of the clothes from my small retail store at a street fair.

Can I use it for this type of merchandise? What products and services does Square support? – Dan

Dear Dan,

Many merchants use Square to sell clothing. In fact, Square has a specific product for retailers called Square for Retail.

Square also supports a wide variety of products and services in the food and beverage, health and beauty, retail, service and repair industries.

Many merchants love the convenience of using it, which can be done by attaching a tiny device to your phone or with a wireless reader.

Check out all the answers from our credit card experts.

Ask Elaine a question.

See related: Accepting international payments with Square

Product and services not supported on Square

However, not all products and services are supported on Square. This is mostly due to legal and regulatory issues.

For the benefit of readers selling different types of merchandise, here’s the full list:

  • Illegal goods and services (this may seem obvious but if, for instance, you’re operating in an unfamiliar market, it’s possible there are local laws you don’t know about).
  • Buyer or membership clubs and associated dues.
  • Credit counseling or credit repair agencies.
  • Credit protection or identity theft services.
  • Direct marketing or subscription offers or services.
  • Infomercial sales.
  • Internet/mail order/telephone order pharmacies or pharmacy referral services (but only when there is an internet or telephone consultation but not a physical visit to a doctor’s office).
  • Unauthorized multilevel marketing businesses.
  • Inbound or outbound telemarketers.
  • Prepaid phone cards or phone services.
  • Rebate-based businesses.
  • Merchants involved in upselling.
  • Bill payment services.
  • Betting of a variety of forms, such as lottery tickets, casino gaming chips, Fantasy Football, off-track betting and wagers at races.
  • Manual or automated cash disbursements via financial institutions.
  • Prepaid cards, checks, insurance or other financial merchandise or services.
  • Sales of money-orders or foreign currency by non-financial institutions.
  • Wire-transfer money orders.
  • Products and services considered by Square to be high risk, including telemarketing sales.
  • Merchandise at service stations.
  • Automated fuel dispensers.
  • Adult entertainment-oriented products or services (including internet, telephone or printed material).
  • Sales of (i) firearms, firearm parts or hardware, and ammunition; or (ii) weapons and other devices designed to cause physical injury.
  • Drug paraphernalia.
  • Occult materials.
  • Hate or harmful products.
  • Escort services.
  • Collection of debt through bankruptcy attorneys or collection agencies.
  • Internet/mail order/telephone order sales of age-restricted products (e.g., tobacco, alcohol).

Why your Square account can be shut down or frozen

Being aware of the list before using the mobile payment solution is important because, if Square determines a merchant is selling any of these things, it is allowed to place a freeze on your account or shut it down.

Square’s general terms of service agreement says specifically: “We may terminate these General Terms or any Additional Terms, or suspend or terminate your Square Account or your access to any Service, at any time for any reason.”

In addition, it notes that if your account is terminated or suspended for any reason, your account may be deleted and Square will not be liable to you “or any third party for compensation, reimbursement, or damages for any termination or suspension of the Services, or for deletion of your information or account data.”

Before using Square, read the fine print

Most of us don’t really study the fine print of agreements like this, but given how broad this language is, I’d suggest that you check out the reviews on the Better Business Bureau’s page to get a sense of the experiences merchants have had with using it and with Square’s customer service to make sure you are well-informed.

As you’ll notice, there are a number of mentions of long holds placed on accounts, sometimes for reasons unclear to the merchants, and challenges reaching a live person via customer service to resolve these situations.

Bear in mind that on any customer feedback site like this, happy customers may not take time to submit a review, so we don’t have a sense of what percentage of merchants have used the service without issues.

How to protect your business while using Square

So, how do you protect yourself if you want the convenience of an app like this but would be hurt by an unexpected account freeze or termination?

One rule of thumb I use with any outside processing service is to never use it beyond a dollar amount I could afford to lose – or do without for a long period of time).

So, for instance, if you were going to sell 10 $20 T-shirts at a fair, and your business would be OK if the $200 was frozen indefinitely for reasons you could not predict, such as fraud on your account, then you might deem that an acceptable risk.

However, if you were going to sell a $2,000 designer jacket and that amount got frozen, it might be too much for your small business to withstand and still pay its bills this month.

Have a backup plan

It’s also important to consider what you would do to process transactions if this account were to be frozen. Do you have a backup system or could your merchant account provider for your store quickly provide you with one?

Only you can determine how much financial risk you can bear from what is known in the processing industry as potential “account instability,” meaning the potential for sudden loss of access to your account.

Of course, you might never experience a single issue with your account at all. I use Square myself to sell my books at speaking events and have not had any problems since I began in January.

However, it’s important to be prepared for the possibility that the disruption of any account could happen, so you don’t find yourself in a situation that causes hassles in your business.

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