Help Article

What are reserves? Why is there a reserve on my PayPal account?

A reserve is an amount of money temporarily held in your PayPal account. It helps make sure that you’re able to cover potential transaction losses from chargebacks, claims or payment reversals filed by your buyers, where no other funds are available. The reserved amount will be unavailable for use or withdrawal.

You'll be notified by email if a reserve is placed on your account. To see how much money is in reserve, go to your Account Summary and view the “on hold” section under "PayPal balance".
 

Why did I get a reserve?

Reserves are placed and evaluated on a case-by-case basis. A reserve may be placed if we believe there’s a higher level of risk associated with your PayPal account. We may consider a list of factors and how they change over time, including (but not limited to):
  • How long you’ve been in business.
  • Whether your industry or the transaction type has a higher likelihood of chargebacks and disputes.
  • Your payment processing volume and history, spikes or reductions, with PayPal and other providers.
  • Your business and/or personal credit history.
  • Your delivery time frames.
  • Whether you have higher-than-average numbers of returns, chargebacks, claims, and disputes.
  • Manually-keyed transactions from PayPal Here.
We’ll review the account periodically to determine whether the reserve should be removed or adjusted. We’ll email you whenever there’s an update on your reserves.
 

What are the types of reserves?

There are two types of reserves:
  • Rolling reserves: A percentage of each transaction you receive each day is held, and then released later on a scheduled basis. For example, your account has a 10% rolling reserve held for a 90-day rolling period. It means that we’ll hold 10% of the funds you receive on day 1 and release it on day 91, then hold 10% of the funds you receive on day 2 until day 92, etc.
  • Minimum reserves: A specific minimum amount of balance is set aside in your PayPal account at all times. For example, your account has a minimum reserve of $1000. We may hold $1000 in your account all at once, or hold a percentage of each day’s sales until the total reaches $1000.

 

How do I prevent account reserves?

Preventing reserves isn’t always possible. However, here are some guidelines that may help you improve your customer satisfaction and reduce the likelihood of having a reserve:
  • 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.
  • Avoid long refund times, which can lead to complaints from unsatisfied customers.
  • For PayPal Here, swipe credit and debit cards when the card is physically available. Only manually key the card number when necessary and appropriate.

View more details about reserves on the funds availability page and in our User Agreement.
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