Selling Products On Websites / Unauthorized Purchase

[GooseCreekRods]

I sell fishing reels on my website using WooCommerce/Square. Someone purchased a $350 reel. Credit card went through just fine. I shipped the product. Thirty days later Square contacted me saying the charge was disputed by the cardholder and they put $350 on hold. I provided all email correspondence, screenshot of the actual order that was placed, and proof of delivery. The credit card company sided with the cardholder. I am out a reel and $350. 

Question: How can this be prevent in the future? If it cannot be prevented, then I'm removing the ability to purchase product on my website. Why would I subject myself to this kind of fraud? Not worth getting an attorney for $350. You would think Square would go to battle for me?

[Donnie-M]

@GooseCreekRods  First off, sucksthis happened. It’s incredibly frustrating, especially when you’ve done everything right: accepted the order, provided the product, and delivered it with proof.

Unfortunately, with card-not-present (online) transactions, the cardholder’s bank ultimately decides the outcome of a dispute—not Square. .

Square can submit the documentation you provide, but they don’t make the final call. The issuing bank evaluates the evidence and often sides with their customer, especially if they claim fraud.

This is one of the harsh realities of selling online. Even with delivery confirmation and emails, fraudsters can still claim they didn’t authorize the charge. That’s why these kinds of purchases are inherently higher risk.

A couple of thoughts to help going forward:

1. Use Square's Risk Manager: Risk Manager 
   It’s an add-on tool that helps you flag or block high-risk transactions. You can set custom rules based on order amount, shipping mismatch, IP address, etc. It’s not bulletproof, but it gives you more control before the sale is finalized.

2. Know Your Customer
   For higher-ticket items, it’s worth doing a little vetting before you ship. If the buyer is someone you don’t recognize or isn’t local, consider:

   • Calling them at the number they provided, see if the person answers the phone, did they really order it, etc.

   • Looking them up online.

   • Matching shipping/billing addresses or using AVS (Address Verification Service).

3. Signature Confirmation & ID Checks
   Requiring a signature on delivery or even photo ID verification (via email or phone) can add a layer of protection—if the customer refuses, that may be a red flag.

The one tool you always have is to take the customer to small claims court for fraud.  Just because they chargeback, doesn't mean they didn't scam you.  I know you want to have square fix this, but it truly is the card issuer who holds all the cards.

Ultimately, you’re right: the only way to avoid 100% of online fraud is not to sell online—but that’s not a viable option for most of us. The better path is managing risk smartly and using tools to help you spot the bad apples before they cost you.

Hope this helps, and again—sorry you had to deal with that.

https://squareup.com/help/us/en/article/6816-navigating-square-risk-manager