Ours works sporadically too. Just checked with another local merchant yesterday and theirs does the same thing. It's either a problem in how the reader was made or else it's the updates.
Why do I think the updates have something to do with it? Ours was on manual update at first, so the first time the blinking red light happened, I updated Square, quit the app, entered it again and did a reader hard reset by holding the button until it flashed 4 orange and then 4 green lights. This made it work fine again so I changed the updates to automatic. Now it's happening again. I'll try the advice of the person above who said to unplug it for a bit, though I did so the first time the reader was misbehaving and it did not seem to help.
I don't really know anything about programing or computers so if a restart won't work, I'm lost as to what to try next. But if this is happening to so many people and getting a new chip reader isn't helping, it's a deeper problem and Square needs to get its wizards thinking about it. I doubt that it's a physical problem with the reader and battery (like fixing old TVs by hitting them) since our chip reader has had no accidents, it did not fall, get hit or so on.
