diff --git a/backend/internal/square/square_dev.go b/backend/internal/square/square_dev.go
index ed431d0..9eed2db 100644
--- a/backend/internal/square/square_dev.go
+++ b/backend/internal/square/square_dev.go
@@ -30,6 +30,7 @@ type MockClient struct {
 	refunds         map[string]*RefundResult
 	completed       map[string]*PaymentResult
 	HoldCheckouts   bool
+	ShouldFail      bool // if true, CreatePayment/RefundPayment return errors for testing error paths
 }
 
 type devProdClient struct{}
@@ -80,6 +81,9 @@ func NewDevClient() SquareClient {
 }
 
 func (m *MockClient) CreatePayment(ctx context.Context, req CreatePaymentReq) (*PaymentResult, error) {
+	if m.ShouldFail {
+		return nil, fmt.Errorf("mock: payment declined (simulated failure)")
+	}
 	log.Printf("[SQUARE-MOCK] CreatePayment: amount=%d, reference=%s", req.Amount, req.ReferenceID)
 	mockSleep(1 * time.Second)
 
@@ -183,6 +187,9 @@ func (m *MockClient) GetCheckout(ctx context.Context, checkoutID string) (*Payme
 }
 
 func (m *MockClient) RefundPayment(ctx context.Context, req RefundPaymentReq) (*RefundResult, error) {
+	if m.ShouldFail {
+		return nil, fmt.Errorf("mock: refund declined (simulated failure)")
+	}
 	log.Printf("[SQUARE-MOCK] RefundPayment: payment=%s, amount=%d", req.PaymentID, req.Amount)
 	mockSleep(1 * time.Second)
 
diff --git a/backend/internal/square/square_dev_test.go b/backend/internal/square/square_dev_test.go
index 09d7886..057fa4d 100644
--- a/backend/internal/square/square_dev_test.go
+++ b/backend/internal/square/square_dev_test.go
@@ -361,6 +361,49 @@ func TestDevClient_CreateCardOnFileRaw_UnknownBrand(t *testing.T) {
 	assert.True(t, card.IsDefault)
 }
 
+func TestCreatePayment_ShouldFail(t *testing.T) {
+	client := NewDevClient().(*MockClient)
+	client.ShouldFail = true
+
+	ctx := context.Background()
+	req := CreatePaymentReq{
+		Amount:         5000,
+		Currency:       "GBP",
+		SourceID:       "cnon:test-card",
+		IdempotencyKey: "test-key-fail",
+		ReferenceID:    "booking-fail",
+	}
+
+	result, err := client.CreatePayment(ctx, req)
+	if err == nil {
+		t.Fatal("expected error when ShouldFail is true, got nil")
+	}
+	if result != nil {
+		t.Errorf("expected nil result, got %+v", result)
+	}
+}
+
+func TestRefundPayment_ShouldFail(t *testing.T) {
+	client := NewDevClient().(*MockClient)
+	client.ShouldFail = true
+
+	ctx := context.Background()
+	req := RefundPaymentReq{
+		PaymentID:      "pay_mock_fail",
+		Amount:         5000,
+		IdempotencyKey: "refund-key-fail",
+		Reason:         "simulated failure",
+	}
+
+	result, err := client.RefundPayment(ctx, req)
+	if err == nil {
+		t.Fatal("expected error when ShouldFail is true, got nil")
+	}
+	if result != nil {
+		t.Errorf("expected nil result, got %+v", result)
+	}
+}
+
 func TestDevClient_ConcurrentPayments(t *testing.T) {
 	client := NewDevClient().(*MockClient)