Was it from your Square balance? Or from your bank account?
My guess (only a guess; you haven't explained enough) is that it's a chargeback by a bank for an unauthorized transaction. The T&C are clear - a successful chargeback will be taken from your balance or bank. Usually, Square will have emailed you to explain, you'd have had the opportunity to dispute a chargeback if it was that. .
Square has security if you turn it on. Dashboard > Payments & Invoices > Risk Manager. There you can set what sort of transaction triggers you want to hold or block. I had a run of bad fraudulent transactions a few years back, after setting the Risk Manager I have not had one since.
But if it was a successful chargeback there's nothing you can do. You've lost stock and time and possibly postage with nothing to show for it, unless you're insured for fraud. Welcome to the risk of doing business, fun isn't it!
