Minimum Reserve - More Info Needed
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Hello.
I've a minimum reserve placed in my account and it says:
- Minimum reserve: The minimum that you need to keep in your account at all times. We'll hold a percentage of each day's payments until you reach your minimum reserve.
Could someone please explain me in human-words until WHEN this reserve will be placed? What does "percentage" mean in this case? Do I need to reach that $x amount of reserve somehow for the money to be released?
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Payment hold and review
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Let's say for example PayPal say the minimum reserve on your account is $5k and you do not have that $5k yet, only $3k in your account. So PayPal will hold a % of each day's payments towards that $5k until you reach the $5k. They will keep this $5k amount in your account to cover any liability (disputes). Anything above or in excess of that "minimum reserve" or the $5k, you can move or have access to.
If you have liabilities that put the minimum reserve under the $5k, then the process starts again, PayPal takes a % amount each day to bring that MR back up to $5k and any thing above that $5k, you can move or have access to.
That's my understanding of it.
Basically, you need to keep a certain amount of money in your PayPal account to cover liabilities. If you go under that amount, PayPal will make sure you have that amount in your account by deducing a percentage from the day's payments going towards that minimum reserve amount. Anything above it, you have access to.
When they put this on your account, you have to check your account. If you say you have an "MR" placed on your account, then it starts then moment it is put on your account.
Kudos & Solved are greatly appreciated. 🙂
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Thank you for your reply here!
So from my understanding, PayPal will keep $5k all the time and I won't be able to withdraw this amount under any circumstances? And in such case, the best way to move forward would be to just cancel my account and wait 120 days to withdraw the money?
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Hi @deimantasbrand,
Welcome to the community forum and thanks for posting.
A minimum reserve is a specific minimum amount of money that’s held in your reserve balance. The minimum reserve is taken as a percentage of money held until a certain amount has been reached.
- For example, 5% of your daily transaction volume is held until a balance of $5,000 is reached, or a one-time amount of $5,000 is taken from the available balance and deposited in the reserve balance.
You can find the amount in reserves by logging into your PayPal account, clicking on the ‘Money’ page and the reserve amount will appear as ‘on hold’. Reserves are reviewed within 180 days from the date of placement and based on improvements to your business performance. It’s possible that your reserve may be removed or lowered. Although performance may have improved we need to ensure that this is maintained and hence why we review every 90 days.
Some best practices to follow are:
- Ship promptly and give your customers valid tracking information through PayPal, so they can keep tabs on their purchases and 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 your 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 this post or any other was helpful, please enrich the community by giving kudos or accepting it as a solution.
-Intars
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