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Why Not Understanding The “Rolling Reserve” Could Put You Out Of Business

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Amad Ebrahimi
Amad has worked in the eCommerce and online marketing world since 2002. He started as an eBay seller, then slowly graduated to building & marketing his own websites and consulting others to do the same. He founded Merchant Maverick out of frustration with all the misinformation and shady tactics that he encountered when trying to find a merchant account for his and his client's businesses. He's the man behind most of the merchant account reviews, and articles posted on Have any questions related to credit card processing? Talk to him.
Amad Ebrahimi
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    C Coleman

    PayPal suddenly smashed our account with a.. wait for it… 25% rolling reserve, after 7 years of trading. Nothing happened in particular with our business we are still trading and in fact growing… year in year out, we hold 250,000 euro of stock so our model is not purely drop ship.. they offer no exact reason, only that their “systems” decided to enforce the reserve.. they will not offer anymore reason than this, they will not remove it. I said you may as well have closed the account, we chat trade with 25% of our turnover being held back.. we only operate at between 27% and 32% profit! again they are not interested, they say we will review the account in 6 months.. lol in 6 months with 25% of my money being held bank for 60 days at a time I’ll be outbid business. Absolute, unreasonable, unprofessional and stupid behaviour from what was a long term trading partner! shocking behaviour!

      New Merchant


      I have an offshore technology support business from India and i have moved to US to expand my business. I am currently looking for a merchant account but have a few questions:

      1. Is online technology support considered high risk?
      2. Do you have any idea about processors providing merchant accounts fro such type of businesses?
      3. Does Chase have its own merchant account processor?


        Amad Ebrahimi

        Yes, unfortunately online tech support is considered high-risk. We have an article about your question here. I think Instabill would be your best choice for a processor.


          Paypal has also been known to abuse this rolling reserve policy as well. Even long standing established businesses with great standing credit are still being hit with 30%/90 Day holds….


            Yep. Hit our account today. FOrtunately BEFORE payments came in. Had everything set up and launched on our dance studio site and then saw the 30%/90 day hold. WTH. As a small dance studio, there is no way we can carry that. I could go without a paycheck for a few months, but my business partner cannot as she is young and on her own. How they slid it in after we got all set up is really misleading as well. Now we’re going with paysimple. Way better.


              Yes, the average mom and pop should be worried. I run a small photography business and they are holding 30% of my revenue for 90 days. It is literally making me unable to pay my bills. I will have to find another merchant service or move to a cash only business.


                Actually the reserves are typically on a rolling six month cycle which means the merchant receives his first month back in month 7. This is done to mitigate risk when a merchant is growing his business and the reserve grows with him… This practice is commonly used for the MO/TO high risk merchant, however with the poor economic conditions there has been as expansion to retail “future delivery” types of merchant… i.e. walpapaper, furniture ..special order merchandise.
                Your everyday mom and pop merchant should not be affected by this process.

                  The Merchant Maverick

                  Thanks for the additional info Want2Help. I’ve heard of 6-month and 12-month cycles (rarely). So are you saying that even given the current economic situation that the average mom and pop shouldn’t be too worried?

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                  Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.