When a buyer makes a purchase and uses PayPal, the online payment service may put the money on hold for up to 21 days in certain instances. The funds will be released when the buyer confirms that he or she has received the item in the promised condition. You can also expedite the release of funds in a few ways.
There are a number of reasons why funds could be placed on hold (reserve), including:
- New Sellers – First you have to build up their buyer-seller credibility and history. Once you’ve established a successful transaction record, your status can change.
- No transactions for a long time – Similar to being a first-time seller, if you haven’t sold an item in a while, you’ll need to rebuild your credibility.
- Refunds/Dispute/Chargebacks – If you’ve been flagged by multiple customers for various issues, PayPal may delay the availability of your funds.
- Suspicious selling pattern – PayPal will flag an account that has unusual activity, including a higher than normal selling pattern or a distinct change in the type of items sold.
- Selling risky items – Examples of these kinds of items include tickets, gift cards, consumer electronics, computers, and travel packages — anything that is more expensive or event-related.
Following the next 3 tips will help you build PayPal credit and avoid any money held in reserve:
- Printing a USPS or UPS shipping label – If you print a shipping label directly from PayPal, the tracking number and delivery confirmation will be automatically uploaded. Provided that the package is delivered without incident, the funds can be released three days after delivery.
- Adding tracking information – If you print your own shipping label outside of the PayPal platform, be sure to upload your tracking information so that PayPal can verify that the package was shipped and delivered. If you use Shopify as your eCommerce platform, it’s highly recommended to install Super PayPal that will automatically sync your orders and tracking numbers.
- Notify buyer to confirm order – Once your buyer confirms that they have received the item, your funds will be released.
To learn more about why PayPal holds your money in reserve, here is a link to their article