Why are my funds being held in reserve?
We may place a reserve on your business PayPal account to cover potential financial losses that may occur from chargebacks and disputes. This practice helps us to create a safer shopping experience.
When we place or review a reserve on an account, we consider several factors, such as:
- How long you've had your PayPal account
- How long you've been in business
- Your processing history with PayPal and other providers
- Whether your industry has a higher likelihood of chargebacks or refunds
- Whether your account has an elevated number 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
Reserves may be a necessity throughout your relationship with PayPal. Preventing reserves isn't always possible, and depending on your industry and your credit history, you might never be able to fully remove a reserve from your account.
Some best practices to follow to reduce the likelihood of having a reserve are:
- Ship promptly and give your customers valid tracking information through PayPal, so they 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 the 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.
If your business improves, we may lower or remove your reserve.