Square claimed customer pay was fraudulent (it's not). Money now missing?

[FenneCat]

I set up an invoice, which I don't normally use Square for but I was making an exception. After my customer paid, Square said it seemed sketchy because it was for nearly $3k when my only other invoice on Square ever was for only $180. I filled out the form where it asks for more info, and a few hours later, they determined it to be fraud. It's not. But now it's suggesting I refund the buyer "just in case" a dispute is made. However, there's nothing to refund them with? The money was not transferred to my bank. It shows a transfer of $0.00 and lists the amount of money under Deferrals Held. There's nothing in my balance, or in my bank. There's nothing in my buyer's account either. There's nothing to confirm on my invoice or anything like that. It's just being held or something.

Is it currently being transferred back to the buyer? Is Square holding it somewhere? What should I do? I'm a bit frustrated. 😞

Thank you for your time.

[Donnie-M]

@FenneCat It sounds like square held the funds from you in case of a chargeback.  This kind of transaction fits a profile of a transaction that has a much higher risk of fraud.  If you look at it from the other side, it is a a card not present transaction that was not in person for a very very large amount.  3k is a lot.

Is there any way to collect the payment from the customer in person with a dip or tap payment?  That transaction is much more secure.  Otherwise if you refund the customer and set up a new payment you should be ok.  I know it is frustrating, but this is a risky transaction and square has an obligation to protect the integrity of payments for buyers and sellers alike.

[FenneCat]

There's no way for us to do the transaction in person, sadly. We're not nearby.

So if I try to refund them, the funds will come from what is being held, then? It won't try to pull it out of my bank because the balance is 0.00?