how to avoid and protect from fraud payments with square online

[Cmonicarojas]

I have a small restaurant and we had about 6 fraudulent payments made through square online.  Square does not protect those transactions and we had to repay them.  We are loosing sales from customers used to order online because we had to stop that option.   As I said we are a small business and having no protection from square on online transactions does not work for us.  Is there a way to have online ordering with only cash pay or pay at pick up?

[MudFire_Dex]

Hi @Cmonicarojas - you might find this helpful - we enabled this in our account, and it has blocked a few payments - preventing what you are describing above - Use 3D Secure with Square Risk Manager | Square Support Center - US 

The risk manager panel offers a lot of protections for us as sellers - Set up Square Risk Manager | Square Support Center - US

If you have other questions, there are a lot of restaurant owners reading these forums and can chime in too 🙂 - hope this helps!

[androo]

Agreed - enabling Square Risk Manager stopped all fraudulent (Square) payments from our store. 

[Cmonicarojas]

Thank you for your recommendations.  I looked into Risk Manager and it has a disclaimer that Square is not liable for payment disputes.  Our restaurant had several transactions paid online -- at different times-- with different cards-- from a discount sale plataform that customers used to purchase food.  On our end we only saw a purchase made by an individual customer, as it is with all online orders.  The customers paid with a cash app. and picked up the food thinking it was all legitimate.  All those payments were disputed and we were liable.  

Do you think that Risk Manager would be able to detect this kind of activity?

[Okimore]

Hi there, @Cmonicarojas 

Hi there, I'm really sorry to hear about the fraudulent transactions - that's incredibly tough, especially for a small restaurant. You are right that online card payments can carry some risk since they're considered "card-not-present" transactions, which don't include the same level of protection as in-person sales.

Here are a few steps you can take to reduce or avoid online fraud while keeping your online ordering open. 

1. Enable "Cash on Delivery" or "Pay at Pickup":

In your Square Online settings, go to Checkout > Payment Methods and toggle on "pay in person" or "Cash on Delivery". 

This let's customers place orders online but pay safety when they arrive.

2. Use Square's built-in fraud tools:

Turn on Risk Manager (in your Dashboard under payments > Risk Manager) to automatically block or flag suspicious transactions. You can create rules - for example, blocking orders from certain ZIP codes or high-risk amounts.

3. Require customer contact details:

Ask for a valid phone number or email to confirm order before preparing food. A quick call or message can verify if it's a genuine order.

4. Set spending limits:

You can adjust your online order settings to limit high-value purchase - this helps reduce potential losses from large fraudulent orders.

5. Keep your fraud evidence ready:

If you do face another dispute, save receipts, order logs, delivery confirmations, and communication - these help Square investigate and sometimes overturn chargebacks.

Many restaurants combine "pay-at-pickup" with cash or card payments in-store to stay secure while keeping online ordering convenient.

Hope this helps you get your online sales going again safely - you've got option to protect your business without loosing customers.

Michael 

Community expert (Square).

If it's help, you can DM Me for more assistance.

[Cmonicarojas]

Thank you so much.  I will give it a try.

[Cmonicarojas]

How do I DM you?  I hope this is it.  I tried to set up the pay at the store or cash on delivery but I do not get that option on the check out tab.