The small business nearly went out of business due to Squarespace’s mistakes. Thanks to thousands of comments, Squarespace fixed the issue.
TikTok founder Dan McLaughlin is a small business owner who is grappling with rising prices and increased risks while running Golden Triangle Coffee, a coffee company based in Cleveland. But he said Squarespace Payments recently put him out of business.
In a video with more than 1.5 million views, McLaughlin explained how signing up to pay a middleman allowed him to cut a percentage off every sale he made over the past 10 months.
“[I]A mistake was made not long ago that was fatal to our business,” he said. “It probably forced us to close. I trusted Squarespace, but this turned out to be a mistake for me. “
Will Squarespace be the “nail in the coffin” for this small business?
“A while ago, I signed up for Squarespace Payments, which will act as an intermediary between me and my current credit card processor, Stripe, but for a lower fee,” McLaughlin said. This should have saved McLaughlin about $0.05 per transaction.
On top of that, McLaughlin quickly realized that the platform was deducting a percentage of his “reserve” fund from each coffee bag sale. He tried to deactivate the service, but Squarespace continued to charge fees from transactions. To make matters worse, Squarespace held the funds for six months to deal with chargebacks and disputes.
“The amount they held, refused to release and continued to charge despite being inactive on our account was so high that it cut into our profits so deeply that now it costs us money to send a bag of coffee from this building,” McLaughlin said. “We are now making negative money because of Squarespace.”
Audience Reactions to Small Business Owners’ Squarespace Complaints
In the comments section, viewers expressed their anger at the situation. Many urged McLaughlin to escalate the matter through an attorney.
“Hire a lawyer as soon as possible,” advised one viewer who identified himself as a lawyer.
“Holding money for six months is crazy!” said another viewer.
“I’m a developer in the Squarespace circle and have access to a forum just for us. I’m going to post this and tag the senior developers. I hope it gets some attention,” said another.
It appears McLaughlin’s video worked. In a follow-up video, he said that after numerous failed interactions with customer service, he heard back from someone at Squarespace. Luckily, the folks at Squarespace were able to fix the problem.
“I told them, thank you for reaching out and solving my problem, but I shouldn’t have a million followers to get this solution,” McLaughlin said.
How do Squarespace payments work?
Squarespace Payments is an addition to Squarespace that “allows you to accept payments and manage transactions within your website.” The service allows website owners to receive payments via credit card, debit card, Apple Pay and other methods, acting as an intermediary between buyers and banking institutions.
However, by signing up for Squarespace Payments, you agree to the terms of service outlined by Squarespace Payments LLC (in the United States) or Squarespace Ireland Limited (outside the United States). By enabling Squarespace Payments, users essentially authorize the platform to handle any settlement of funds.
Squarespace Payments LLC reserves the right, in accordance with its Terms and Conditions, to impose a hold period on funds in the event of suspicious activity, excessive chargebacks, or requests from third-party banks. They also reserve the right to maintain a reserve account to cushion losses, chargebacks, disputes or negative balances.
As McLaughlin noted, even if a user cancels Squarespace Payments, Squarespace can continue to withhold his earnings as a buffer. Regardless of whether it is canceled in accordance with its terms and conditions, the buffer holding scheme remains in place. So, essentially, the company will continue to withhold funds until the account is “risk-deemed cleared.”
All Hip Hop reached out to McLaughlin for comment via email and TikTok message, and Squarespace via the media contact form.
This article contains additional reporting by Mars Ramos.
@softpourn @Squarespace ♬ Original Sound – Dan
