Why is my money being held in reserve by PayPal?
An account reserve is an amount of money that is held in your PayPal account to cover potential financial risk such as payment reversals you may receive like chargebacks and claims. PayPal uses three types of reserves: rolling reserves, minimum reserves and jumpstart reserves.
Reserves may be a necessity throughout your relationship with PayPal. Preventing reserves isn’t always possible, and depending on your industry and your credit history, you might never be able to fully remove a reserve from your account.
However, you can reduce the likelihood of having a reserve and improve your customer service in the process by following Seller Best Practices – and that’s a win-win for everyone.
Seller Best Practices
Some best practices to follow are:
- Ship promptly and give your customers valid tracking information through PayPal, so they can keep tabs on their purchases and know when to expect delivery
- Communicate early and often with your buyers and let them know about any changes, delays, or other important information
- Monitor your buyer complaint rates regularly and try to keep complaint rates below 1% of your sales.
- Avoid long refund times, which can lead to complaints from unsatisfied customers
PayPal proactively reviews reserves and based on improvements to your business performance it is possible that your reserves could be adjusted or removed. So, if you’ve made improvements in key areas, for example performance, industry, and claim reductions, it’s possible that your reserve will be lifted or reduced.
To find out how much money is being held or in reserve, under the 'PayPal balance' section of your account, simply click Money. From time to time, we may need to adjust your reserve amount. If that happens, we’ll email you about the changes.