PayPal at one time was a great service for customers and sellers to use for their eBay purchases. It was fast, convenient, and easy to set up. I have used PayPal myself to purchase items from eBay, and enjoyed the experience. However, if you are a seller on eBay and with to use PayPal, you need to be aware of feature within PayPal called Rolling Reserve, which will hold 30% of your transaction revenue for up to 90 days. As any business would agree, having your funds limited for this length of time would cripple, and in the end, destroy your business. PayPal’s excuse? It is for your own protection.
What exactly is Rolling Reserve?
Taken from PayPal’s website, here is their definition of a Rolling Reserve:
Rolling reserves
“With rolling reserves, a percentage of each transaction is held and then released after a certain amount of time. For example, your reserve may be set at 10% and held for a 90-day rolling period. This means that we’ll hold 10% of the payments you receive on the first day until day 91, 10% of your second day’s payments until day 92, and so on.”
When reading through their FAQ, I did not see where they state an exact percentage, meaning it is up to them how much they will hold. What is the purpose of this? They state it is to protect you by making sure you have enough money in your reserves in case of returns, etc. However, another reason may be to hold onto your money longer, thus they gain interest on your money.
The idea of a reserve is not a bad one, as long as the seller is on control of it. If the seller could state their precentage, and the length of time, then it would make more sense. As it is, this looks like a method for PayPal to collect money from sellers by holding onto their funds. Even though I am not a seller, I do not plan to use PayPal unless I must. This needs to change, or PayPal should be replaced with a company that listens to it’s customers. Numerous people have complained about this, with no results. If your a seller and use PayPal, be warned, you may be hit with a rolling reserve.
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Tags: paypal, rolling reserve, Scam
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