A reserve is a temporary hold on a portion of your account balance to cover potential refunds, chargebacks, or processing disputes. This article explains why reserves are placed, how reserve amounts are calculated, and how to manage or appeal a reserve.
Frequently Asked Questions
What is a reserve?
A reserve is a temporary, partial hold on your account funds for a set period. It helps cover potential future losses from customer refunds or payment disputes.
Note: A reserve does not stop you from continuing to accept payments.
Why was a reserve placed on my account?
Payment processors use reserves to protect both merchants and customers against unexpected losses. A reserve may be applied if your account shows an increased risk profile, such as:
Processing in an industry with long fulfillment or delivery timelines
Higher-than-average refund or dispute rates
A sudden, unexplained spike in payment volume
Operational or financial difficulties in fulfilling customer orders
How is the reserve amount calculated?
Reserve amounts are tailored to your account's specific risk profile. Key factors evaluated include:
Overall industry conditions
Processing and payment volume
Refund and dispute frequencies
Account financial stability
How are reserve funds used, and when are they released?
Covering fees/disputes: If a customer files a dispute or requests a refund, the reserved funds are automatically released to cover that transaction.
Full release: Once the reserve period ends, any remaining funds are fully released back to your available balance (provided they were not needed to cover disputes).
How can I check my reserve status?
When a reserve is applied, an email notification is sent with full details (including the percentage of held funds and the duration). You can also view active reserves in your Dashboard under the Balance tab.
Can a reserve be extended?
Shortly before a reserve is scheduled to expire, an automated review is conducted. If the risk profile remains elevated (e.g., high dispute rates), the reserve period may be extended, increased, or adjusted.
How to lower account risk and avoid reserves
To maintain good account standing and reduce risk factors:
Track Dispute Rates: Regularly review your processing reports.
Respond Quickly: Address customer disputes and inquiry notifications immediately.
Set Clear Policies: Prominently display shipping times, refund terms, and return policies on your website.
Keep Clear Documentation: Maintain proof of delivery, receipts, and customer communication logs.
Notify Customers of Delays: Keep buyers informed about any order fulfillment delays.
How do I appeal a reserve?
If your account qualifies for an appeal:
Go to the Balance page in your Dashboard.
If available, click Appeal Reserve and complete the form.
Provide supporting documentation (such as inventory logs, proof of delivery, or updated financial records) to help speed up the review.
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