What are PayPal account reserves?

An account reserve is an amount of funds held in your PayPal account to cover potential transaction losses from payment reversals, such as chargebacks and claims filed by your buyers. The reserved amount will be temporarily unavailable for use or withdrawal.

If a reserve is placed on your account, you'll receive email notifications outlining the terms of your reserve. To see how much balance 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. Ordinarily, if you have a reserve on your account and receive a chargeback or dispute, we'll deduct that amount from your available balance and not from any reserve balance. However, if a seller goes out of business or stops processing payments through PayPal, we'll use any reserve to cover future payment reversals.

We may consider a list of factors and how they change over time, including (but not limited to):
  • Your payment processing history with PayPal and other providers
  • Whether your industry has a higher likelihood of chargebacks or refunds
  • Whether your account has an elevated numbers of customer claims and disputes
  • Your business and/or personal credit history
  • Whether you're selling products or services in advance (preselling orders)
  • Your delivery time frames - whether there are extended delivery timeframes
We review the account periodically to determine whether the reserve should be removed or adjusted. Reserves may be eligible for the reduction or removal with positive changes to key areas such as performance, industry, claims reduction, etc.

What are the types of reserves?

PayPal uses three types of reserves:
  • Rolling reserve: 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 reserve: 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.
  • Jumpstart reserve: An amount of funds that are held from your available balance immediately. For example, if we make the determination to keep a $1000 jumpstart reserve and there is $2000 in the PayPal account balance, $1000 is moved to reserves straight away.

When will I get my funds?

When your funds will be released depends on what type of reserve you have. We'll email you whenever there's an update on your reserves.

If you have a rolling reserve, the funds will be released after a certain period of time. For example, if you have a 90 day rolling reserve, funds from Day 1 sales will be available on Day 91.

Minimum reserves are reviewed every 180 days. We review reserves proactively. Based on improvements to your business performance, it’s possible that your reserves could be adjusted or removed.

How do I prevent account reserves?

Preventing reserves isn't always possible. To maintain a safer payment network, reserves may be a necessity throughout a seller's relationship with PayPal.

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.
  • 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.
  • 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 in our User Agreement section 11.5.