The Hidden Risk in Relying on Platforms That Don’t Know Your Business

Last week, I watched a 48-year-old family business get digitally executed.

No trial, no explanation - just a polite email with corporate speak and a 30-day countdown to deactivation.

The business? A licensed pharmacy trying to sell basic vitamins and minerals online as an expansion to several in-person pharmacies that have served their community for over 48 years.

The crime? Attempting to set up an online store.

The platform? Square - one of the most trusted names in small business payments.

They hadn’t made a single sale, as they hadn't even had the time to activate their shop.

They hadn’t even finished setting up their inventory.

The Decision Was Swift (and Algorithmic)

Within days of uploading a few of their product inventory, Square’s automated system flagged the account for “violating terms of service.” It sent an email stating that their account would be deactivated within 30 days.

The specifics? Vague references to prohibited products and high-risk activity.

The evidence? Never provided.

The appeal process? “Email us and we’ll get back to you.”

When we reached out to get more understanding via their support and see how the decision could be reversed, the response was a masterclass in corporate deflection:

“This has been a final decision.”

“I don’t have any additional information about why the account was scheduled for deactivation.”

“I suggest replying to the email you received for further information.”

Translation:

We’ve decided you’re a problem, and we won’t explain why.

Additionally, no one you can reach has the authority to fix it.

The Human Cost of Efficiency

This wasn’t about losing money. The pharmacy’s core operations are solid. What hurt was the casual, systemic way Square, knowingly or not, wields power over small businesses with no context, no conversation, and no accountability.

This is a licensed, state-regulated pharmacy. They’ve served their community for nearly 50 years. And they got shut down by an algorithm that couldn’t distinguish between a healthcare provider and a random supplement drop-shipper.

Square’s system may be efficient at spotting “risk,” but it’s completely blind to nuance.

The Support Theater

The chat support experience made this even clearer. Friendly greetings. Professional language. Absolutely no power to help. The representative couldn’t access decision-making tools, couldn’t escalate the issue, and wasn’t trained to handle regulated business concerns.

It was support theater: the script of help without the substance. Designed to appear responsive while actually deflecting responsibility back into the void of an email inbox.

What This Really Reveals

This isn’t just about Square. It’s about an entire class of platforms treating small businesses as liabilities instead of partners.

Yes, platforms need fraud detection. But they also need systems that can tell the difference between an unregulated seller pushing risky products and a licensed business offering standard vitamins in a compliant way.

Why hasn’t that happened? Because the consequences of shutting down a legitimate business fall on the business owner. The consequences of letting a bad actor through fall on the platform. And when the risk is externalized, accuracy doesn’t get prioritized.

A Service Design Failure

From a service design lens, this is a classic case of optimizing for the wrong things. Square optimized for:

Speed of risk detection
Legal insulation
Operational efficiency in complaint handling

They didn’t optimize for:

Accuracy in risk assessment
Support for legitimate edge cases
Maintaining trust with business customers

So they built a system that says “no” quickly, but can’t say “yes” when it matters most.

What Small Businesses Can Learn

Here’s what this situation teaches:

Platform dependency is a business risk.
If one algorithmic decision can halt your growth, you need backup options.
Legitimacy doesn’t guarantee understanding.
Licenses and compliance don’t protect you from a platform that can’t see your context.
Support is often powerless.
First-line reps often aren’t equipped to resolve complex or regulated edge cases.
Documentation is essential.
Treat every platform interaction like it might become evidence.

The Bigger Picture

Platforms scale by automating decisions.

But scale without discretion erodes trust.

The most successful platforms will figure out how to combine automated efficiency with informed human judgment—especially when dealing with industries like healthcare, legal services, or finance.

A Better Way Forward

So, in what ways could the situation have been better? What would better service design look like?

Context-aware risk filters: Recognizing the difference between a scammer and a licensed pharmacy.
Transparent communications: Explaining flags/issues and what info is needed to resolve them.
Genuine escalation paths: Support reps who can actually get decisions reviewed.
Trained, industry-specific support teams: Especially for regulated fields.

The Fresh Take

In this case, it's simple:

Platforms that treat small businesses as partners, not problems, are going to win.

When this pharmacy faced this situation, we recommended an alternative: Shopify - a platform better suited to their needs. One that could support their business, rather than shutting it down during the setup.

And while they will ultimately be better off, they never should’ve had to deal with this and learn this new age big tech lesson the hard way.

When platforms choose efficiency over empathy, they leave the door wide open for competitors who understand that small businesses aren’t just revenue. They’re the economic backbone, and they deserve systems designed for their success.

The question isn’t whether automation is needed. Of course it is.

The real question is whether platforms can design automation that serves small businesses, not just protects the platform itself.

Those who answer yes will build trust.

The rest? They'll keep generating stories like this one.

If you've faced something similar, been flagged, blocked, or dismissed by a platform that didn’t bother to communicate and serve with understanding, share your experience. Trust and accountability in digital business are more critical than ever.