What Does “PayPal Reserve Placed on Account” Mean?
When you see “PayPal reserve placed on account,” it means PayPal has temporarily held back a portion of your incoming funds. This money is not lost, but it is restricted for a period of time to protect PayPal against potential refunds, chargebacks, or disputes.
In simple terms, PayPal is setting aside money as a safety buffer.
Why PayPal Places a Reserve on an Account
PayPal usually applies a reserve when it believes there is a higher risk of refunds or disputes. This can happen for several reasons.
1. New or Growing Accounts
If your account is new or your sales volume has increased suddenly, PayPal may place a reserve until your transaction history becomes more predictable.
2. High Chargebacks or Disputes
Accounts with frequent disputes, claims, or chargebacks are more likely to get a reserve.
3. Selling High-Risk Products or Services
Digital goods, subscriptions, travel, event tickets, or pre-orders often trigger reserves because buyers may request refunds later.
4. Delayed Delivery or Preorders
If you collect payments long before delivering the product or service, PayPal may hold funds to cover potential refunds.
5. Inconsistent Selling Patterns
Large fluctuations in sales activity can signal risk and result in a reserve being applied.
Types of PayPal Reserves
Rolling Reserve
PayPal holds a percentage of each transaction, often 5–25 percent, and releases it after a set period, usually 90 days.
Minimum Reserve
PayPal keeps a fixed amount in reserve. Once the minimum is reached, no further funds are held unless risk increases.
Temporary Hold
Funds from specific transactions may be held until the order is confirmed as delivered or the risk period passes.
How a PayPal Reserve Affects Your Account
- You still receive payments
- Part of your money is unavailable temporarily
- You may have reduced cash flow
- Withdrawals may be limited until funds are released
The reserved funds remain visible in your account and are released automatically if no issues occur.
How Long Does a PayPal Reserve Last?
Most reserves last 30 to 90 days, depending on your account history, dispute rate, and delivery confirmation. PayPal reviews accounts regularly and may adjust or remove the reserve earlier if risk decreases.
Can You Remove a PayPal Reserve?
Yes, in many cases.
You can reduce or remove a reserve by:
- Providing tracking numbers and proof of delivery
- Maintaining a low dispute and refund rate
- Communicating clearly with buyers
- Avoiding sudden spikes in sales
- Building a consistent transaction history
You can also contact PayPal support to ask for a review, especially if your business model has changed or stabilized.
Is a PayPal Reserve a Bad Thing?
Not necessarily. A reserve does not mean your account is in trouble or being penalized. It is a risk management tool used by PayPal, especially for newer or fast-growing sellers.
Many accounts have reserves removed automatically once trust is established.
Final Thoughts
A PayPal reserve placed on your account means some of your funds are temporarily held to cover potential disputes or refunds. The money is still yours and is released over time if transactions go smoothly. Maintaining good selling practices and consistent activity is the best way to get the reserve lifted faster.