PayPal Reserve Placed on Account Meaning
A PayPal reserve placed on your account means PayPal is temporarily holding a portion of your funds to cover potential risks. Learn why it happens, how it works, and how to remove it.
PAYPAL
Taylor Reed
12/23/20252 min read
What Does “PayPal Reserve Placed on Account” Mean?
When you see PayPal reserve placed on account, it means PayPal has decided to hold back a portion of your incoming payments for a certain period of time. These funds are not lost, but they are temporarily unavailable to withdraw or use.
A reserve is PayPal’s way of protecting itself and buyers from potential refunds, chargebacks, or disputes.
Why PayPal Places a Reserve on an Account
PayPal places reserves mainly for risk management. Common reasons include:
1. New or Growing Account
If your account is new or suddenly receiving higher payment volumes, PayPal may apply a reserve until your activity becomes predictable.
2. High Dispute or Chargeback Rate
Frequent refunds, disputes, or chargebacks increase risk, leading PayPal to hold funds as a safety buffer.
3. Business Model Risk
Certain products or services like digital goods, subscriptions, or pre-orders are considered higher risk.
4. Sudden Sales Spike
A sharp increase in sales can trigger a reserve, even if your business is legitimate.
5. Past Account Issues
Previous limitations, negative balances, or compliance issues can result in a reserve.
Types of PayPal Reserves
PayPal typically applies one of these reserve types:
Rolling Reserve
A percentage of each payment is held for a fixed period, often 21 to 90 days, then released automatically.
Minimum Reserve
PayPal holds a fixed minimum amount in your account at all times.
Combination Reserve
A mix of rolling and minimum reserves.
How Long Does a PayPal Reserve Last?
In most cases:
Reserves last up to 90 days
Some rolling reserves release funds after 21 days per transaction
PayPal reviews reserves periodically and may adjust or remove them
You can check reserve details in your PayPal account dashboard.
Can You Use Your Money During a Reserve?
No. Reserved funds:
Cannot be withdrawn to your bank
Cannot be used to send payments
Are locked until the holding period ends
However, non-reserved funds remain usable.
How to Remove or Reduce a PayPal Reserve
While you cannot instantly remove a reserve, you can reduce the chances of keeping it long-term:
Ship orders quickly and add tracking
Resolve disputes promptly
Maintain low refund and chargeback rates
Keep consistent sales volume
Provide clear product descriptions and delivery timelines
Build a positive transaction history
In some cases, contacting PayPal support and providing business documentation may help during reviews.
Is a PayPal Reserve Bad?
Not necessarily.
A reserve does not mean your account is banned or restricted. It is a precautionary measure. Many businesses operate normally with a reserve and see it removed once trust is established.
Difference Between PayPal Reserve and PayPal Hold
Reserve: Ongoing, policy-based holding of funds
Hold: Transaction-specific and usually temporary
Both are common and often automatic.
A PayPal reserve placed on your account means PayPal is managing risk by holding part of your funds temporarily. While it can affect cash flow, it is usually temporary and improves as your account history strengthens. Staying compliant, consistent, and customer-focused is the fastest way to see the reserve reduced or removed.
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