I personally never had that issue with square. But then again I don't use it that often. My only issue was a charge back (customer didn't recognize the LLC name) which took a month to clear up because even if the customer stops the charge back, they wait till it roles through the system.
I think square is a nice start for people doing business from time to time but if you are going to consistently doing things like farmers, markets, gift fairs and expos, it it not that expensive to get a merchant account and wireless card reader. If you had $1000 in refunds, the savings in merchant fees would cover the cost of merchant account and then some. Normally they throw in a wireless card reader at no cost.
In addition, the wireless card readers spit out a receipt and, from a PCI Compliance factor, you are better protected. Finally, with a real merchant account, someone will pick up the phone when you have a charge back question, something you can not do with Square.