The owners of a small, family-run business in Quebec’s Eastern Townships are putting out a warning to others after they seemingly fell victim to a fraud scheme.
The coffee shop owners say they lost nearly $10,000 and two valuable espresso machines to scammers. Now they’re expressing frustration about the financial institutions they say should have protected them.
Tara Moar and her partner Matthew Greer have poured their hearts and souls into their coffee business in Brome Lake.
“We call this place our fourth and loudest child. It’s a needy child that we put a lot of time and attention into,” said Tara Moar, owner of Atelier de Café Virgin Hill.
They import beans from abroad, roast them onsite, and sell bags and bags of their crowd-pleasing blends. They also sell countless cups at their bustling counter and drive-thru.
They even live on the grounds of their business.
“We sold our family home; we moved into our business with our three children,” Moar explained. “That helped us to fund this drive-thru that really helped our business through the pandemic.”
She says during COVID when many people were spending money upgrading their homes, they also started selling espresso machines.
“It was going really well. People really appreciated it. We can service them here,” said Moar.
It’s two recent transactions involving top-of-the-line machines from Italy that have left a bitter taste in their mouths.
“It kind of hit us like a brick wall,” said Moar.
“It’s theft and we feel powerless against it,” said Greer.
Earlier this year, they received two online orders a week apart from two different customers wanting espresso machines worth more than $4,000 each.
“We thought the timing was maybe a bit weird, but not completely improbable,” said Moar.
They shipped one to an address in Ontario and another to an address in Quebec.
Both customers paid by Visa through Square, the payment processing solution Virgin Hill employs.
The customers confirmed the machines had arrived, according to emails Moar showed Global News. Shortly after the machines were delivered, the trouble began.
“We received a notice from Square saying that the charges were disputed by the customer for the first order and we went ‘oh no,'” Moar recounted, adding that this was something they had never experienced before.
They soon expected the second sale to be disputed as well, and indeed it was not long after.
The customers both claimed to have no knowledge of the over $4,000 charge. Armed with the emails between the business and the customers, Moar and Greer thought for certain the dispute would be ruled in their favour.
“I provided all the evidence thinking there was no chance we weren’t going to win,” she said.
Three months later, they heard from Square they had lost both disputes and the decision was final. Both the money and the machines were gone.
“This is a huge, huge loss for us,” said Greer.
“We’re out $9,000, which to a small business represents weeks of payroll,” said Moar. “That’s everything.”
The Canadian Federation of Independent Business (CFIB) says Virgin Hill is not alone in feeling they were scammed by a chargeback.
“These are calls that we are receiving every year,” said CFIB Quebec vice president François Vincent.
The merchants are angry and say they can’t even find out why they lost the dispute, and say Square has not advocated for them enough.
“My question is, how is Square going to support their merchants through this process, and there’s no answer to it,” said Moar.
“I’m not a processor, I’m a coffee roaster,” said Greer. They say they have not been able to reach the customers by phone or email. One of the two phone numbers had been disconnected when Global News tried to call.
Square told Global News it works with sellers to gather evidence and provide it to the bank, but that “chargeback decisions are made by the cardholder’s issuing bank, not Square.”
Meanwhile, the Canadian Bankers Association told Global News that credit card companies make the final decisions on disputes.
“The card payment networks (e.g., Visa, Mastercard, Amex) set chargeback rules and make final decisions in cases of disputes. Merchants would manage disputes via their acquirer (in this case, Square) and cardholders manage via their issuer,” said Canadian Bankers Association vice president of communications Mathieu Labrèche in an email.
Visa said it could not comment on the specific case.
“While we cannot discuss the specifics of this business due to client confidentiality, we can confirm that we regularly conduct our own investigations to uphold our policies and client commitments,” said spokesperson Tracy Truong.
The pair is upset with the financial institutions – they feel they have failed them.
“It’s just something that the big guy who can afford to take the loss is passing it down to the little guy who can’t afford to take the loss,” said Greer. “You think you’re safe as a merchant and you’re not.”
The CFIB says it should be easier for business owners to “challenge a decision in the simplest and fairest way,” and that they are lobbying for changes to the process. Square recommends merchants protect themselves by doing things like asking customers for government IDs to ensure they are who they say they are.
Greer and Moar don’t accept any internet sales over $100 anymore. One of their options is to launch legal action against the financial institutions to challenge the dispute result, but they don’t see that as a path to victory.
They are considering going to the police, but are skeptical. They advise other small businesses to think twice before accepting any large transactions online.
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