School payments card provider Squid agrees to drop £10 refund fees – here's what you need to know

Before shutting down on 14 March 2025, Squid offered a prepaid account and card that parents could top up online and that children could use to pay for school lunch, for example.

MoneySavingExpert.com has been investigating the firm's exit from the UK market for the past week, after we received several reports from concerned parents who had been told that they'd be charged a £10 admin fee to have their balances refunded, and that balances under £10 wouldn't be refunded at all.

Squid has now agreed to reduce or waive its £10 refund fee

As first reported by the BBC's Money Box on Saturday 29 March, Squid has now partially backed down. Here's what's happening:

• Squid will work with schools to reimburse parents without any charge. Your child's school should contact you directly to arrange this. In these cases, you won't need to apply for a refund through Squid's website.

• Where your school can't manage the refund, the £10 charge will be reduced to a maximum of £2.50. Here, you'll be able to request a refund through Squid's online portal. You'll be charged between 20p and £2.50 depending on the amount being refunded (the exact fee will be shown as part of the process).
  
  If you already paid the higher £10 fee in March, this will be refunded automatically.

• You should get your refund "by the start of next term". In other words, within the next three weeks in most cases.

If you don't hear anything over the coming weeks, you can contact Squid using its online form or by email at customerservice@squidcard.com.

The problem with Squid's terms and conditions

Squid's terms and conditions had said it can charge a £10 'administration fee' for refunds where a parent decides to cancel their account.

However, given that it was Squid's own decision to withdraw the service (not parents' decision to cancel), the firm's insistence on charging the fees was understandably seen as deeply unfair by many parents. It was possibly also unenforceable under the 'unfair contract terms' provisions of the Consumer Rights Act 2015.

As a result, we had been pushing Squid to explain itself, which it has so far failed to do. We've approached the firm for comment and will update this story if we hear back.