A bug in POS just cost me $100. Thanks Square! 🤬

[Michael80]

I had a customer place an order via direct email, so I sent her an invoice. With tax and tip, she paid $100.75. When her husband came to pick up the order, he was unaware of the specifics made by his wife. And that led my business partner to make a bit of a mix-up on the order. After I found out about it, I reached out to the wife to apologize and offer her a gift card. She said everything worked out ok and she appreciated the offer for the gift card.

I intended to issue a gift card for the full amount paid but wanted to issue it as a refund on that order so that we don't get hit with a tax penalty. So I opened the POS app on my phone and looked up the invoice. There was no refund button, but at the bottom of the page was a button to view the transaction. On the transaction screen, there was a button to issue a refund. On the next screen, I selected all items, then clicked Next. On the "Refund To" screen, there was a choice between issuing the refund to the original payment method (Visa), or to a Gift Card. I selected "Gift Card" and under "Reason for Refund" I selected "Other" and typed "Customer Satisfaction." Then I clicked the "Refund" button at the top of the screen. This took me to a page where I could add to a card or issue an eGift card. I chose the eGift card. I was then prompted to enter the email address. I thought this was poor software design because the transaction was already linked to the customer's email address. Nevertheless, I carefully typed in her email address and double-checked it because I didn't want to issue an eGift card to the wrong email. I then clicked the button to send and I was shown a final screen with the 4-digit suffix of the eGift card. Success!

But then I returned to the transaction and saw that the refund was issued to the customer's Visa. WTF?!?!? I then checked the gift cards page and there was no new gift card listed. So even though the POS app (POS can be interpreted two ways) said it was issuing the refund to a gift card, it instead issued the refund to the customer's credit card WITHOUT MY AUTHORIZATION! Thanks a lot, Square. Your buggy software just cost me $100.75. 😠😠😠

[Donnie-M]

@Michael80 I know you mentioned checking the gift card page, but I would double check the reporting and the page also:

"

Gift Cards Summary Report

1. From your online Square Dashboard, go to Reports.

2. Select Gift Cards.

3. Use the date and location selector to view the Gift Cards Summary Report and Inter-Location Payables & Receivables.

4. Click Export to receive a downloadable report.

View Gift Card Transfer History

1. From your Square Dashboard, click Reporting > Transactions > Gift Cards.

2. Select any transaction completed with the gift card in question or you can search by the last four digits of the gift card.

3. Click the gift card and scroll down to view the transfer history."

I was also curious about what kind of "tax penalty" you were worried about?  I know when you issue a refund, it is like undoing a sale and the taxes are refunded, etc.  I truly understand the frustration when something doesn't go the way it is supposed to go.  I like to go back and always look at the root cause of problems and try to solve them from there.  Otherwise, I tend to "kick the cat" that is in front of me.  I would strongly recommend to you and anyone else to always test the point of sale out if you are doing something for the first time so you are familiar with and know exactly how it will behave.

On the outside looking in, you accomplished what you wanted and got them a refund if the gift card wasn't issued.  And you should be able to see this in your daily report to verify if it was refunded.  I don't think there is any tax penalty to be had here as no sale was generated, so no revenue was realized.

[Michael80]

1. The gift card was definitely NOT issued. I've checked it in every way. Furthermore, the software is showing that the refund was applied to the customer's credit card.

2. If I kept the original sale ($100.75) and issued her a gift card equal to that sale with a 100% discount (so it wouldn't cost her anything), then when she used up the gift card, I would show $201.50 in sales (instead of $100.75). That means the govt would see an extra $100.75 in income, resulting in a tax penalty. That's why I was trying to issue the gift card as a REFUND on her original sale.

3. The frustration is NOT that something didn't go the way I wanted it to. The frustration is that I did the proper procedure to issue the refund as a gift card, but Square's SHODDY SOFTWARE screwed me over and did something that I DID NOT AUTHORIZE IT TO DO. Imagine buying a car and when you put it in drive, it went in reverse instead and smashed into your house.

4. The root cause of the problem is that Square's software contains a grossly negligent defect.

5. I'd love to be able to test out everything in advance. But Square FAILED TO GIVE US A TEST MODE. This is a problem that people have been complaining about for years. Other POS systems have Test/Training modes. But NOT Square. In Square, the ONLY way to test anything (or do any training) is with LIVE TRANSACTIONS. This is BS!

6. Yes, the customer got a refund. That was NOT my intention. My intention was to give them a complimentary gift card equivalent to the amount of their order which they could use to make new future purchases. As a business owner, you should know that those two things are NOT even close to being the same thing.

7. You're right, there is no tax penalty now. BECAUSE SQUARE LOST ME THE $100.75 IN INCOME.

[Donnie-M]

If you discount an item 100% there is no sales tax or revenue generated.  It will show as a GROSS sale, but it is not part of your NET sales.  You don't pay taxes on something that didn't generate any revenue.  Manufacturer rebates are different, but a straight discount just reduces the selling price even if it is 100%.  You can still count the product use as part of your CoGS overall when you do your reporting.

I am glad you had checked and know for sure that a gift card was not issued, I often suggest something like this, especially in a situation like this so you can answer the question exactly as you did.  I often hate when I call tech support and they ask if it is plugged in, so I always want to check all those bases first before I go to the next level.

I don't think I was clear on what I meant by when something doesn't go the way you want it to and root cause.  In your specific situation, if the customer had communicated with her husband and there wasn't a communication breakdown, you would have fulfilled the order exactly as the customer wanted.  But I understand 100%, even if you are right, you are still wrong in the customer's view and you were doing everything you could to make it more than right with your customer.

A test mode would be great, but it still wouldn't be a real world transaction.  I did a roughly 3$ transaction and did a refund to a gift card just to see if I could see the same behavior you talked about.  I know it is "only" 3$ and 3$ is different to many different people, but it was worth it to me just to understand 100% what you are talking about.  I am just a seller like yourself, and I don't get paid to answer questions or even care about your situation.  But I do it so I can learn and hopefully help.  Most importantly I do it so you know someone hears you, and I make sure that when I can, square notices things too.  I will test an invoice refund when I get a chance later today hopefully and see if I can replicate what you are describing.

What I do is I look for ways I can create systems to handle problems just like this.  I tend to focus more on what I can do than what other people can do, because I have learned I can only control myself.  I do understand you are angry, and I only want to help you, but I accept that I might not be able to help you.

[Michael80]

Donnie, first let me thank you for trying to assist and I apologize for venting some of my anger in your direction. My ire is for Square, not you.

The details of what happened with the original fulfillment of the order are immaterial to the fact that there's a serious bug in Square's software. I merely tried to offer some context as to why I tried to issue a refund to a gift card. But to provide more details, the customer ordered some specific items via email. I invoiced her and she paid by credit card in advance. When her husband arrived to pick up the order, he didn't know any of the order specifics. He didn't even know that the order was pre-paid. I was not in the shop at the time and my business partner confused this with a generic phone-in order. My partner provided to the husband a variety of items instead of the specific items his wife had ordered. My partner also charged the husband for the order. Afterward, my partner called me and I had to straighten everything out over the phone. Meanwhile, the husband had called his wife and he returned to the shop (literally minutes after leaving) while I was on the phone with my partner. I spoke to the husband and apologized for the mix-up. While on the phone, I immediately issued a refund on his payment via the POS app on my phone. I also told him that my partner was making up a new order with the specific items that his wife had ordered. I thought that fixed everything and I got off the phone. But apparently, the husband and wife had decided during their phone call that they would just take the variety of items my partner had originally given him. So he told my partner not to bother making up the new order. This means that, technically, we had fulfilled their wishes. And the wife later commented that everyone at her party really enjoyed what we had given them. But I was not satisfied with the fact that this customer did not receive exactly what she had originally ordered (even though what my partner gave them was actually higher-priced than what she had ordered). In any case, I offered to issue a gift card refund to the wife and she was grateful for the consideration. But now the gift card turned into a refund to her credit card. Which, in addition to causing my business to lose $100.75, makes us look even more inept and unprofessional.

A test/training mode should function EXACTLY as any real-world transaction with the exception that there wouldn't actually be any credit card payment processing.

To replicate the bug, you need to create the original sale as an invoice and then pay the invoice. I've since learned that in the web dashboard when you try to issue a refund on an invoice, the software will not allow you to issue it to a gift card. But in the phone app, there is no such prohibition. There's no logical reason why you shouldn't be allowed to issue a refund on an invoice to a gift card. So my guess is that Square discovered this bug in their invoicing software and, instead of fixing the bug, simply disabled the ability to refund to a gift card on the invoicing page of the web portal. But Square obviously forgot to disable that functionality in the POS phone app (at least in the app for Android).

Thank you for taking the time to try to help. But why isn't Square stepping up here? I guess they're too busy planning their "Celebrate International Women's Day" events and other irrelevant nonsense instead of focusing their time, money, and manpower on providing us with a robust, error-free point-of-sale system. 😠

[Donnie-M]

@Michael80 Thank you for the detailed explanation you just sent.  I have one more question, which version of the pos software are you using (iOS, Android, Mobile or tablet, etc.) or I might be quicker to ask what kind of device it was you are using as the bug might be specific to one device type.  I will actually then take and make a bug report for you to get some other eyes on this and see if square can replicate the bug.  I would then have to give you a caveat emptor/ymmv and recommend you contact customer service through your dashboard.  At that point it becomes an account specific question and there isn't usually any account specific information that is given through the forums.

I know you are looking for square to step in, but I will defend them here just a bit by saying, I am a super seller and square has the super seller program to help the community and sometimes I can bring attention to something that needs another set of eyes.  Not always, but I am willing to help and I am representative of square working to help the community.  BUT!!! I understand that is not what you are looking for or meaning when you ask why they aren't stepping in here.

And thank you for seeing what I am trying to do and giving me the extra info to try to help you or at least prevent something like this in the future.  Square is good about adapting and listening, and that is one of the big reasons I do this is to improve the product I use in my business every day.