Square’s ‘Free’ Reader — Costs $10

When Square launched in February 2009, one of the staples of its offering was the free reader. Request the payment dongle online and Square would send it to you, in packaging of Apple-like quality, at no charge.

Those days are officially over. Sort of.

This week Square announced that it would begin selling its eponymous readers in Starbucks. But what was lost in the coverage of the news was the cost: $10.

Now, before you get all “let’s call Consumer Reports over this outrage,” Square refunds the $10 to purchases of the dongle through the user’s merchant account.

In addition to selling it at Starbucks, Square readers are available at Best Buy, Walmart, Target, and the Apple Store, as well as other retail locations (Walgreens, Staples, and Radio Shack, for example). At all these locations, the reader’s retail price is about $10, with a $10 rebate that is sent to your Square-linked bank account. We say “about $10” because the Apple Store is offering the device for $9.95, Walmart for $11.94 (online price), Target for $10.94 (stores only, and Target is selling the black version), Best Buy for $9.99… you get the picture.

Why is Square engaging in this sale/refund arrangement?

According to the Bits blog post, the sales at Starbucks are the coffee giant’s way of showing its commitment to Square, as if the relationship was in doubt. The other retail locations are less obvious, since they do not use Square at their point of sales. What the compensation arrangement is between Square and these retailers is unclear, although we suspect it might be in the range of $10 a sale. But that’s only a suspicion.

Oh, and in case you were wondering, no comment from Square.