Why are your funds on hold? And what can you do about it?

Aug 29 2019 | PayPal editorial staff | 6 min read

Most businesses will experience a time when their funds are not available to them, also known as a payment hold or pending payment. This can be stressful, especially for a small business, so we’ve pulled together some information to help you understand what’s going on if and when this happens to you.

What does it mean when funds are unavailable or on hold?

A payment on hold, or pending, is money that belongs to you but is not yet available to be withdrawn or used.

How do payment holds work at PayPal?

When payments are on hold, the money sits in your account but is unable to be accessed for up to 21 days. We’ll release the funds as soon as we know the order has completed without issue, or you’ve provided some more information about it. In most cases, we’ll ask you to proceed with the order, and ship or provide the item or service to the buyer straight away.

We’ll always email you if a payment is put on hold with details about why and any actions you can take to access your funds sooner than scheduled.

We place payments on hold to protect your business by ensuring the funds are available should a chargeback or refund occur. These holds also help us protect our strong community of buyers and make sure their orders are fulfilled as expected.
 

Why are funds temporarily unavailable?

We place reserves, limitations and payments holds for a variety of reasons, including:
  • You’re a first-time seller. When you’re a new PayPal seller, it takes time to develop a pattern of positive buyer-seller transactions. You can usually move out of this status by verifying your identity and building up a history of positive selling activity.
  • You haven’t sold in a while. Some businesses, particularly very small ones, sometimes stop and start. They could be moving between different payment providers or ceasing trading for some time. If your PayPal selling activity has been dormant for a while, you’ll need to rebuild your history of positive buyer-seller transactions to access your payments straight away again.
  • There have been a few refunds, disputes or chargebacks. If multiple customers request a refund or file a dispute or chargeback, we might be prompted to look a little closer at your business to make sure things are running smoothly. The best way to resolve this is to work directly with your customers to prevent disputes and chargebacks.
  • Your selling pattern appears unusual or changes. An unusual sales activity, like an unexpected spike in sales or a change in your average selling price, business platform or type of item being sold, can be a red flag to us that something’s not right. It could be that business is booming, or pivoting, but we’ll ask you for information about this just to be sure.
  • You’re selling higher risk items. Sales of things that are generally prone to higher risk of chargeback and fraud.
  • We’re waiting on funds from the buyer. Sometimes, payments will appear as pending if your buyer has a bank account, but no credit card, linked to their PayPal account. This means that we’re waiting for the funds to be transferred from their bank and it will usually be with you within 5 days. In this instance, we’ll ask you to delay shipping until the money is with you, safe and sound.

You can read more about when, why and how holds and reserves happen in our User Agreement.
 

How can you access your money sooner?

Assuming there are no issues with the order, you may be able to expedite the release of temporarily unavailable funds sooner than the scheduled 21 days.
 
Action Required Time to release What you need to do
Add tracking information 1 day after delivery with supported carriers Enter the tracking number provided by one of our supported carriers on the transaction details page.
Buyer confirmation Up to 1 day from buyer confirmation Ask your buyers to confirm, in their PayPal account, that they’ve received their purchase as expected.
 
Our supported carriers are Australia Post, Australia Post Express Platinum, Australia Post eParcel, Australia Post EMS, Star Track Express, Fastway Couriers, DHL, UPS, FedEx, TNT, Toll IPEC, Ads One, Bonds Couriers, Couriers Please, DTDC, Hunter Express, Sendle and Skynet.
 

How can you prevent payment holds?

There are some things you can do to help prevent a delay of funds in future:
  1. Prevent refunds, disputes and chargebacks by:
    • Setting yourself up for success by posting clear photos of the actual goods and detailed, accurate descriptions of items so buyers know exactly what to expect.
    • Be clear about shipping and handling time, costs and methods, and process orders promptly to avoid delays.
    • Pack items carefully with appropriate, quality packing material so customers receive the items in good condition.
    • Use one of our supported carriers and provide tracking information both to us and your customers via the PayPal transaction page.
    • Clearly define your return policy upfront to avoid problems later.
  2. Communicate and work with your customers. When a customer contacts you, do your best to be responsive and helpful. Working with customers early on can prevent a minor issue from ballooning into a much larger problem. If you’re involved in a buyer dispute, start working to resolve it right away. Frequent, honest and open communication with the customer via the PayPal Resolution Centre can help clear up any misunderstandings.
  3. Set up your card statement name in your PayPal account. Use your trading name if you can so your customers can easily identify the transaction when reviewing their accounts.
  4. Set up a customer service message in your PayPal account that outlines expectations. Update this message to reflect current conditions, like delays in order fulfilment due to sales or season, or anticipated shipping delays due to fires or storms.
 

Tips for eBay sellers

If you sell on eBay, you should also check out eBay’s seller performance policy.
 
 
The contents of this site are provided for informational purposes only. You should always obtain independent, professional accounting, financial, and legal advice before making any business decision.

Frequently asked questions.

We may place payments on hold for many reasons, such as you’re a new seller with PayPal or you haven’t sold in a while.

In a calendar month, you have a set amount of money you can withdraw or use. Above that amount, the money becomes available 21 days after you receive the payment or earlier. The amount you can access immediately is reset every month. 

To request an increase in the amount of money available to you each month:  
  1. Click the Pay & Get Paid tab at the top of the page. 
  2. Under Wallet click Money
  3. Click Request an increase under "How to help get your money sooner". 
  4. Select the appropriate amount. 
  5. Click Done
We'll review your request and send you an email within 3 business days.  

We review sellers accounts on a regular basis. Establishing a good selling history with us will help to avoid holds in the future. 
You can see your account balance in the 'Balance' section of your Summary page, or on your PayPal balance page.

As well as your available balance, you may also see a pending balance if you have incoming payments that are currently pending. You can also see any foreign currency balances you may hold.

Your Activities page is a record of the payments you’ve sent or received.
Why is my payment on hold?

Your payment may be on hold because:
  • The payment you received may be considered unusual for your selling pattern
  • Your account was inactive for a while
  • We found an unusual change in selling price of this transaction
  • You’re selling an item that can potentially cause dissatisfaction with customers
Why does PayPal do this?

Delaying funds availability is a common industry practice we implement to help ensure the safe and secure use of PayPal by both buyers and sellers. We do this to ensure there is enough money in your PayPal account to resolve any issues that may arise with your account such as chargebacks or disputes. The money still belongs to you. It’s just temporarily not available to use, until your buyer has received the item they ordered in the condition promised.

When will I have access to my money?

If there aren't any issues with your transaction, such as a customer filing a dispute, the payment will become available within 21 days.

How can I get access to my money faster?

You can help to release the eligible payments by following one of the below steps:
  • Add Tracking. Use one of our approved shipping carriers and we’ll release the hold 1 day after the courier confirmed delivery.
  • Update the order status if the held payment is for a service or intangible item (e.g. piano lessons, e-book) and you'll get your money in 7 days
Otherwise, the payment will be released up to 21 days after you received it, provided there aren't any issues with your transaction or account. 

Here’s how to add tracking information or change the order status: 
  1. Go to your Activity
  2. Find the transaction you would like to update, then click Get your money
  3. If you sold a product, select Product to add tracking information or print shipping label directly. 
  4. If you sold an intangible item or service, select Service or virtual product to confirm order status. 
  5. Click Submit

You can view the status of your refund on your Transactions page.

To view the latest status:

  1. Go to Activity.
  2. From the "All transactions" drop-down menu, select Refunds.
  3. If needed, select the desired date range to see your refund.
  4. Click the refunded transaction to view the details.

Here are a few common refund statuses:

  • Pending: If your refund status is Pending, It could be because PayPal has not yet received the funds from the sender's bank for the Instant Transfer, or that the seller issued an eCheque (electronic payment funded by a bank account) that has not yet cleared from their bank. It usually takes 3-5 business days for the money to become available in your PayPal balance.
  • Refunded or Partially Refunded: If your refund status is Refunded or Partially Refunded, it means that the refund is complete. The money should be back in your PayPal balance or on your credit card.
  • Temporary hold: If your refund status is "held", it means the transaction was refunded before it has cleared your bank. This process takes 3-5 business days to complete, and the refund will be credited to your balance once the process is completed.

Where is my refund sent?

How your money is refunded depends on how you made the original payment.

  • If your payment came from your card, it will be refunded to that card. If the card you paid with is closed or invalid, please contact the issuing bank, as the money will still be refunded to your credit card account. If the refund cannot be processed to your debit card, it will be applied to your PayPal balance.
  • If your payment came from your bank account, it will be refunded to that bank account.
  • If your payment came from your PayPal balance, it will be refunded to your PayPal balance.
  • If you paid part with your PayPal balance and the rest with your debit or credit card, we'll refund the amount paid by debit or credit card directly to the card, and the rest to the PayPal balance.
  • If you paid part with your PayPal balance and the rest with your bank account, we'll refund the amount paid by bank account directly to that bank and the rest will return to the PayPal balance.

Refunds to credit or debit cards can take up to 30 days depending on the card company involved.

The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.