It only applies to new sellers until they have a good proven selling record and its for buyer protection. However you often don't have to wait 21 days.
HERES SOME INFO FOR YOU:
Why your payments are held.
• You have been selling on eBay for less than 90 days
• You have an eBay feedback score fewer than 100 as a seller and have not yet established a record of good performance
• You have received fewer than 20 Detatiled Seller Ratings on eBay in the last 12 months or your eBay seller performance is below standard
• You have a high rate of customer disputes or a low eBay feedback percentage
• You have been a PayPal member for less than 6 months and have limited selling activity
• You have a sudden change in selling activities (e.g. suddenly selling expensive items, selling large numbers of items, etc.)
• You happen to be selling in a high risk category such as tickets, travel, gift vouchers, computers, electronics, mobile phones, etc.
Depending on the circumstances, paypal may set aside payments for a single transaction or for all payments to sellers who meet the criteria above.
How can I get the payments released before 21 days.
1. If your buyer leaves feedback (pos) then funds are normally released within 48 hours of that feedback being left.
2. If you decide to send an item trackable then you can add the tracking number to the details of the paypal transaction and funds are then released when the item shows as delivered + 3 days.
What if I have met the criteria for release and the funds are still held.
The release of payments is not automatic before 21 days, so you need to email or phone paypal via "contact us" bottom of paypal pages with the transaction i.d's of the payments involved. State how you met the criteria for release of funds before 21 days eg feedback or a tracking number.
Its for buyer protection > if a seller refuses to refund a buyer for an item not received and paypal can't access funds in the sellers account then they refund the buyer themselves.
So to protect themselves and still be able to offer buyer protection they hang on to the funds of new sellers until they have a record of good performance.
Same as a bank will hold onto a "guarantee" sometimes for a loan.
And to be fair without buyer protection its doubtful we would sell our stuff in the first place as i for one as a buyer would not send money to a stranger without buyer protection.
Advice is voluntary.
Kudos / Solution appreciated.
