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In a previous post, I described how to meet minimum credit card spends by buying American Express gift cards and turning them into cash using a service called Square. Since then, I’ve heard from a few people who have done this that their Square accounts have been frozen due to being under “investigation”. They didn’t lose any money, but they are no longer able to accept credit card payments through the service. After looking more carefully through the Square User Agreement, I found the following: “You also may not use the Service to process cash advances.” So, while this language appeared as an afterthought at the end of a somewhat unrelated topic, it seems that the company takes it seriously. So, going forward, I do not recommend using this service to pay yourself.
What other options do you have? You can, of course, continue to use Square for all legitimate purposes. If a friend or relative wants to pay you for goods or services using a gift card they own, that should be OK.
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Neva: Yes, I don’t remember the exact amounts, but it is something like: if you go over $20K AND 200 transactions then Square will report your transactions to the IRS
I plan to use my square for flea market sales, I never make much profit. How does the square work for taxes? Do I have a minimum amount before I worry about taxes?
Avoid gopayment. It works fine, but expect a 1099k for as little as $60 as they classify it as a true merchant account, and a credit pull to get the account.
I just looked through / scanned for “cash advances” in the visa international operating agreement (note there is one for mastercard and amex as well) . keep in mind this pdf file was 1300 pages!! But no matches for cash advances. Keep in mind they may have used other lingo…
What about intuits gopayment product that they are competing with squared on?
can we use that service for cash advance payments?
thanks
RJ
RJ: Great question. I don’t know.
[…] it led to the risk of nasty credit card account reviews, and it violated terms and agreements (see a quick note about square). Other than that, it was […]
are they depositing the funds in 2 to 3 days now? last year it took them almost over 30 days to deposit my transaction. im currently using paydivvy.com, but paydivvy is charging 3.75 per/trans. i like to switch back to square but is it better now?
They deposit every night
any idea how much people were running through square? I did a 1K transaction with no issues
carwag25: Good question. One person reported doing close to $15K. Anyone else have info to contribute?
It doesn’t matter if it is to yourself or between accounts. What matters is the quantity in which you do it. Trying $10k at once will put you on the radar. Maybe $500/day will not.
jcmitchell21: Good point! I was trying show how to stay within Square’s terms and conditions, but even if you do use Square legitimately, you don’t want to get investigated! So, I keep the charges small enough to seem reasonable and hopefully you’ll fly under the radar.
The obvious solution for couples or friends is to sign up for cards together and pay each other.
[…] A quick note about Square […]