Business Resource Center

Manage your business

Account Reserves: FAQs

Are you making interest off of the reserves in my account?

No, PayPal does not collect interest on money that is held in a reserve account. We place the money from the reserves in a non-interest bearing account.

Reserves are in place to minimize losses and to create a safer shopping experience. Sometimes merchants don’t deliver what they sold due to unexpected problems. If a merchant is unable to deliver what they promised, it’s our responsibility to ensure customers can receive a refund.

I've had an account for years, why is my account being reviewed now?

It may have been time for a routine account review or changes in your account may have prompted the review. Examples of account changes could include: processing significantly higher sales volumes, an increase in your selling price, or an increase in buyer dispute, claim, chargeback, or refund rates.

Why do I need to send you more information about my business or my financials?

We need to verify that your business will be able to deliver what the customer ordered.

What is needed?
How information is used

Business information

  • Time in business
  • Industry
  • Number of employees
  • Website

Time in business

We use this information to determine how much experience you have in this industry. For example, are you a new or existing business?

Industry

We use this information to evaluate if you’re operating in a high or low risk industry. Presale items such as events, travel, tickets, and furniture are considered high risk.

Number of employees

We use this information to assess your company’s ability to deliver products or services.

Website

We use this information to review your policies and checkout pages to determine what information your buyers receive. We’re interested in your return policy, customer service information, shipping time, presale listing, product, and service descriptions.

Processing history

We use your processing history to determine what products you have been selling, how long you’ve been processing these types of transactions, and what types of customer problems you’ve experienced.

Supplier information

We use your supplier information to verify your supplier is legitimate.

Financials statements

We use your financial statements to assess the strength of your business, your ability to pay your suppliers, and deliver the product or service.

Business credit

We use your business credit information to assess your current and past ability to pay creditors.

Personal credit

We use your credit information to assess your current and past ability to pay creditors. Consumer credit may be used if your business has minimal or no historical business credit.

Business model:

  • Product
  • Price:
  • Delivery
  • Promotion:

Product/Service Offering:

We review the types of products you are selling, how the products are manufactured, and who your suppliers are. Certain products, services, and suppliers carry a higher risk. We also need to validate that you are able to deliver the product or service to the customer’s satisfaction (product quality and on time delivery).

Price:

Evaluate if your volume significantly increased because of a change in price or new product offering.

Delivery/Shipping:

We review your shipping processes and delivery timelines.

Promotion:

We may ask you if you’ve had any recent sales which might have caused a large increase in your volume.

Fraud prevention/detection processes or tools

We want to make sure you have adequate controls in place to detect fraud.

I sent in the information you requested. How long do I have to wait to see what type of reserves will be on my account?

If we received all the information we requested, we will typically contact you within 3 business days.

When will I receive my money?

The terms of your reserve are outlined in your account, and it depends on what type of reserve you have. For example, if you have a rolling reserve, the money will be released after a certain number of days. For example, if you have a 90 day rolling reserve, funds from Day 1 sales will be available on Day 91. Even though you will receive day 1 sales on day 91, we will continue to capture new reserves on an ongoing basis. So, you’ll always have the last 90 days of payments in reserve at any given time.

What is the maximum amount of time you can hold my money in a reserve?

Typically, we can hold your money up to 180 days.

If I close my account, how long will it take for me to get the money that was held in a reserve back?

You will typically receive your money 180 days after your account is closed. In some cases, it can take more than 180 days.

Will the money you are holding be used if I receive a chargeback?

No, money from your available balance will be used to cover any chargebacks that you receive. A reserve is an amount of money that is held in your PayPal account that is used when we are unable to collect on your past due balances from: chargebacks, claims, debit transactions with insufficient funds in the account, and fees.

Am I selling a product that is in a high risk category?

Certain goods are associated with a high level of risk such as tickets, furniture, gift cards, consumer electronics, computers, commodities, and travel packages. These items tend to have high refund rates, fluctuating values, or long delivery lead times. Presale items are also considered as high risk.

Will you automatically review my account for consideration of removing the reserve or do I have to keep calling you?

Reserves may be eligible for review every 180 days on a case-by-case basis. If you haven’t been reviewed in the last 180 days and there has been improved business performance and/or improved credit attributes, your account can be reviewed to see if your reserve can be removed or reduced. In some cases a reserve will be a requirement throughout your time with PayPal.

If it has been 180 days since your last review and your business has improved and you would like an account review, please contact us to request an account review.

I’ve never had a problem with claims or chargebacks, why are you holding my money in case these things happen?

Claims and chargebacks are one factor we consider when reviewing an account for a reserve. Other factors may be reviewed as well, including:

  • How long you've been in business.
  • Whether your industry has a higher likelihood of chargebacks, returns, or fraud.
  • Processing history with PayPal and other providers.
  • Whether your account has an elevated number of customer disputes, claims, chargebacks, bank reversals, or returns.
  • Financial stability of your business.
  • Your business and/or personal credit risk.
  • Your delivery time frames (how many days it takes for the customer to receive their order).
  • If your selling products or services in advance (presale items).
  • There have been significant changes in your business.
What appeared on my credit report that caused you to place a reserve?

We do not make reserve decisions solely on your credit information. If you would like specifics regarding your credit reports, please contact the respective credit bureaus below to review your history.

Credit Bureau Name
Phone
Equifax 1-800-727-8495
Dun and Bradstreet 1-800-234-3867
Experian 1- 888-808-8242

Other factors may have been considered in the decision, including:

  • How long you've been in business.
  • Whether your industry has a higher likelihood of customer chargebacks, returns, or fraud.
  • Processing history with PayPal and other providers.
  • Whether your account has an elevated number of customer disputes, claims, chargebacks, bank reversals, or returns.
  • Financial stability of your business.
  • Your business and/or personal credit risk.
  • Your delivery time frames (for example, how many days it takes for the customer to receive their order).
  • Whether you are preselling orders (for example, charging customers before you have the product within you’re control/inventory).
  • There have been significant changes in your business (for example, increase in your sales or product price).