Business Resource Center
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Account Reserves: Presale Policy and Reserves
What is preselling?
If you collect money for a product or service that isn’t available yet, it is considered preselling. You may be planning to purchase the product with the money you received from the sale or you are in the process of building the product or service and plan to deliver it once it’s ready. The card associations refer to this as delayed delivery.
Am I allowed to presell?
Yes, you are allowed to presell items as long as you follow these guidelines.
Off eBay presale requirements
If you sell items in an online store (not eBay), you must guarantee delivery within 20 days from the date of purchase and make sure that the customer knows they are buying a presale item.
Before you can withdraw a payment, we may ask for documentation to validate that you will be able to deliver the customer’s order within the specified timeline. We may ask for:
- Information about your supplier such as a contract and/or their contact information
- Proof of purchase from your supplier
- Shipping receipts
We ask for information about your supplier and invoices to verify that you have a product or service and we ask for shipping information to verify that you have shipped orders.
On eBay presale requirements
If you want to presell items on eBay, you must meet the 4 criteria below:
- Guarantee that the item will be available for shipping within 30 days from the purchase date. Be sure to clearly state this information in your listing.
- Clearly indicate in the listing that the item is a presale item.
- The handling time specified in your listing should reflect the time from the end of the listing until the item is shipped to the buyer—not the time the item is in your possession. Be sure to specify the correct handling time in your listing.
- In the listing form, you need to use the default font size of 3 so people can easily see these sale terms.
Am I allowed to presell if I can’t deliver the product or service within 20 days?
If you are selling goods or services in an online store (not eBay), you may be allowed to presell items but we may hold your money in a reserve account or limit what you can do with your account to reduce the higher risks associated with presale items.
We recommend that you delay authorizing and capturing the money until you have the product available or until you plan on delivering the product or service. Once you have the ability to deliver the product or service:
- Authorize the transaction.
- Once the authorization is approved, capture the money.
- Ship the product within one business day of capturing the money.
If you are selling items on eBay that can’t be delivered within 30 days, you must obtain eBay’s approval before you can list the presale item. Learn more about eBay’s presale policy.
- Magazine subscriptions (which are considered presale items) aren't allowed to be sold on eBay because the first issue generally can't be delivered within 30 days of the purchase date due to the publisher's processing time.
- Promotional items and events
You may be able to presale manufacturer supplied items but your listings must be approved by eBay before the item can be listed.
Why am I being penalized for preselling orders?
The preselling requirements are designed to allow members to buy and sell items that aren't available yet while protecting buyers from a potentially risky transaction. Reserves may have been placed on your account to help ensure that buyers receive the product or service they paid for within the agreed timeline or a refund if the product isn’t available.
I’m a legitimate business selling products and services in advance. Why do I have reserves on my account?
We know you have good intentions to deliver high-quality products and services on time but we understand that some of these unexpected things can happen.
- Supplier Problems: Your supplier can go out of business, have manufacturing problems, send you a sub-standard product, ship the product to you later than promised, or not at all. If you are selling tickets to an event, the event could be canceled because the star of your show is unable to attend for various reasons or because of problems with the venue or weather.
- Environmental: Natural disasters are beyond your control but they can impact you or your supplier’s ability to deliver the customer’s order.
- Financial: You may need to use the money from the order to build or buy the product, cover your payroll, pay suppliers, or other business needs and not be able to pay it back when it comes time to deliver the order.
- Shipping Problems: Your shipping company may deliver products late or damaged. This could cause some customers to cancel their orders after you’ve already paid shipping costs.
- Fraud: You may have paid a fraudulent company to manufacture or ship your product. Once the money is gone, you can’t deliver the product.
- Inventory: You may be selling a product to which you don’t have access. You may think you can purchase the product after you get the sale, but you could later find out that you can’t get the product, your supplier sent you counterfeit merchandise, product price was too high, or you gave the company the money and they didn’t deliver the product to you, or did not deliver it on time.
Why are you holding all or some of my money?
We use reserves to minimize losses and to create a safer shopping experience. Unfortunately businesses that presell items can run into unexpected problems that can leave the seller unable to deliver what the customer ordered and can even put them out of business. This leaves us in a tough spot when something goes wrong. We want you to get paid and we want the customer to get what they ordered. But, if you can’t deliver, we are financially liable for making sure customers receive a refund.
Why are you holding my money in a reserve for so long?
Chargebacks can take several months to come in and we want to make sure that you have money in your account to cover them. For example, if a customer’s PayPal account is funded by a credit card, card holders can file chargebacks for up to 120 days or more. In rare occasions, chargebacks can come in up to 540 days later.
Are all merchants that offer presale items subject to a reserve or an account limitation?
No, we make a decision based on each individual seller. When we review your account, we may look at factors such as your: payment history, business model, suppliers, financial history, personal credit, business credit history, shipping practices, and fraud prevention processes.
I’m providing a service that will take several months to deliver. How do I process the transaction?
You can place multiple transactions. For example, if you are a home contractor, you can charge your customer for the materials you have purchased. Once you deliver the service, you can charge the customer for the work that was completed. This way, if the customer has a problem, they can dispute the service separately from the materials.