Hey @chameleonvtg. I had this happen once, also. What your employee learned is correct. Here’s how it worked for me, with general timing:
- Bank received ACH deposit and determined account was closed.
- ACH deposit return to Square was initiated. This took about 3 business days to complete, as I recall.
- Once Square received the funds back they notified me and made a deposit to my payroll bank account. It all too about 5 business days, as I recall.
The reason you don’t see anything from Square yet is that they do not know it happened. Only the ACH system knows and it takes them a while to initiate refunds. ACH is pretty slow and methodical that way. Square will be unaware anything happened until the ACH deposit is received by them as ACH doesn’t notify them that something is “on the way.”
Luckily I had the funds available in my payroll account to go ahead and write the employee a replacement check before the funds were returned by Square. If that’s not the case for you, your employee will just have to wait until Square deposits the money back into your account. There should not be any issues legally since this was the employee’s mistake and not yours.
Chip A.
Square Expert & Innovator and member of the Square Champions group. (But NOT a Square employee, just a seller like you)
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