🪦 CBD Merchant Terminated from Square with 30 Day Notice
The story of how I was deactivated from my retail POS, processor, and inventory management system right before Cyber Monday and what this means for current Square CBD merchants
October 24th, 2023, was the day that Square reached out to give us 30 day notice.
They alleged that RESTART had violated their Terms of Service, and was giving us until Black Friday to re-platform our entire system.
I always knew this day could come.
As a cannabis operator, you get used to having the rug pulled out from underneth you.
But after being an upstanding customer with Square for over four years.
Why us and why now?
But to try to answer those questions, I have to take you back to how we got here.
As a brand, we launched RESTART in August 2018, and that first year was truly wild because no solutions existed for our industry.
We were left to scrape together systems that haphazardly would decide they didn’t want to be associated with a CBD or hemp business.
Causing them to inevitably kick us off their platform.
So this whole 30 day notice/ termination isn’t new.
In fact, our very first payment processing solution was a company called Elavon and from the end of 2018 to the spring of 2019, they decided to effective immediately consider CBD merchants and their products a “prohibitive category” overnight.
That was the first (of many) pivots I would be confronted with and was the next step in our journey towards Square.
And as timing would have it, Square was also pilot testing a new CBD program.
So thanks to some of my tech connections from my WordPress days, we were able to secure a spot for RESTART in the program, and were excited at the opportunity of being able to utilize such a mainstream POS and processing platform.
In addition to it’s retail and inventory features, it integrated with WordPress so we could build out our eCommerce solution with WooCommerce.
Plus the very best part, this was a dedicated CBD program so we had *some* protection over what products we could sell.
Reflecting back, it seemed like the best ship to jump to.
And in the early days, it was great!
We had a point of contact, I felt like I was making progress working with their system, and if we had any issues we could reach out to someone who understood the nature of our industry.
They were quite responsive and reached out to engage with us as a merchant.
Until we hit our first snag with Square: PARAPHANELIA!
As part of their arrangement to open a program for CBD merchants, it wasn’t just a free for all, there were Terms of Service we had to abide by and as such certain products we had to agree to not selling on their platform.
From their point of view, they didn’t want iillicit business to happen on their platform, which I can understand.
The hard part, it was difficult to police on all fronts, and their lack of communication made it an all or nothing game.
Of course, we had been made aware of these terms from the start, but the hard truth is it is very difficult for operators.
In the early days we took the TOS explicitely but after attending tradeshows and events we would come to learn that other Square merchants were being creative in how they were ringing up products as not to flag the automated system.
So the few times we attempted that route, we were slapped on the wrist.
OK, noted.
Absolutely NO, to paraphernalia.
Now the alternative, which is the route we mostly took, was to get a backup processor in store for parapahenlia.
I’m not advocating for violating terms, but I am suggesting that there has to be some flexibility and support for merchants on the platform to work.
How can I sell you flower that looks like marijuana, but I can’t sell you the pipe to smoke it in?
I’ll mention that at this point, Square was processing both our in-store retail transactions AND our online/eCommerce transactions through a WooCommerce integration.
We made the changes they requested, and sent them the appropriate COA’s.
But what happened next was a slow fade into silence.
We just stopped hearing from Square.
And when we would reach out our rep wouldn’t respond to our emails.
We even had a hard time getting ahold of anyone who knew anything about the CBD program.
And we left it alone unless they reached out to us.
Until we noticed they were imposing payment limits on our account.
Now I’m wondering, did I get a blemish on my account from the paraphernalia incident that I’m being punished for?
And of course when I reached out to our dedicated rep, it was crickets.
I even contacted Square customer support through traditional channels, and they said that there was nothing I could do to appeal my limits.
Additionally, they couldn’t provide any reason as to why limits were placed on our account.
As a small business that is working on growing and scaling, I was now being capped on how much I could process monthly.
But where could I turn?
What platform could I move to?
I say it all the time and I’ll say it again:
“The devil I know is better than the devil I don’t know.”
While Square wasn’t perfect, it was a solution with clearly marked boundaries, so I learned to play by their rules.
And outside of the box.
I ended up getting a backup processor for in-store, solely to process paraphrenia.
Which inevitably still messed with inventory, but it was a small price to pay for peace.
We also ended up finding an alternative processor for eCommerce which gave me more buffer to not hit those processing limits in store.
The list goes on!
We had a whole SEPARATE site for paraphernalia because even though Square was no longer the online processor, they still didn’t want to be associated.
We’ve had issues with selling certain cannabinoids and even subscriptions!
Again, the devil I know is better than the devil I do not know.
But I wasn’t silent, I would bring these issues up to anyone who would listen.
At a networking event in Austin, I ended up bending the ear of someone very influential who had been a part of the C-Suite of a very large CBD company that had helped Square craft its program.
I had a glimmer of hope.
Maybe this important person will help me get the answers I so desperately seek.
Unfortunately, as you can see…
Despite his best and multiple efforts, the contact never responded.
We would go on to hear crickets from Square anytime we reached out for clarity or support as it pertains to the growth of our merchant account.
It’s honestly a bit traumatic to relive some of these moments because the industry has been tumultuous from the get-go.
I also wouldn’t be who I am today as a business owner and operator without overcoming the impossible.
So instead of freaking out, I’ve taken on an attitude of “if there’s a will, there’s a way”.
And I never stopped looking for a solution.
Something to give me the best inventory management, support, and flexibility when it comes to what I can process and how.
I also fully realize that no solution is 100% perfect, and will take this brief moment if you’ve made it this far to say, everyone’s business and business structure is different.
This is just my story and I hope it can help clarify some things you too may have been experiencing in isolation, as well as be a guide for some next steps.
With my eCommerce background, I was also fully aware of Shopify.
If you want me to do a Shopify vs WordPress vs random eCommerce solutions, let me know down below as I’ve done extensive research on the subject.
But for the sake of this post, Shopify is a closed-sourced platform and WordPress is an open-source platform. And, Square is a closed-source platform, which all goes to say that if you are closed-source, you have your own specific TOS, and if someone violates that, what happens to their platform and data/content?
So while I want to like Shopify, the risk of being a Hemp/CBD merchant is too great, and if their Terms of Service change, like Elavon’s did back in 2019, they can have a mass exodus forcing you off their platform with little to no notice.
In the case of Square, from what I can tell this is not an isolated issue because I was caught violating something.
These are the ripples of a much bigger wave, which I believe is inevitably coming.
After attending MJ Biz Con and speaking to a few other hemp operators, Square is tightening the reigns.
So if anything, if you are on Square and are in their CBD Beta Merchant Program, I highly encourage you to look into options now before you’re given a termination notice like I was last year.
Not to invite you into my trauma, but that specific day that I found out, October 24th, 2023, was the day before I was heading out of town on my 10-day micro wedding elopement/minimoon.
It couldn’t have been worse timing!
And on top of it, the biggest shopping season of the year was upon us and my processing with Square would be turned off on November 24th, 2023.
I was in a bit of a scramble.
Square had sent us 3 warnings before the termination, so they did give us some foreshadowing of what was to come.
But the big disappointment was with how the warnings came and went.
We were instructed via an automated message to fill out this questionnaire essentially a Yes or No form that was asking about things like selling paraphernalia, and other things like selling Kratom and Kava (which we do not sell).
And despite answering their form accurately, we continued to fail each warning with no opportunity to appeal or discuss specifics with a human being.
So just speaking bluntly here, the reality is, that you can agree or disagree with Square’s assessment of what you are doing on their platform.
I ultimately don’t agree with their decision.
But at the end of the day, it is up to them if you are violating their terms, and if they deem you to do such, it is their decision to keep you or kick you off.
I just want to share my store in hopes of preparing and helping you navigate the scenario should it happen to you.
The solution we’ve moved to is still a work in progress, so I don’t want to blast them out until I have a proper data set of experience to speak from.
However, if you are interested in learning more about the direction we took and where we’ve ended up.
Please reach out to me and I’d be more than happy to have a one on one conversation with you to help connect you to the resources you need.