Please help me understand why there’s a reserve in place. What do the reserved funds do? Do they only apply to shopify payments? What would be the scenarios if a store uses other 3p payment gateways?
Thanks in advance for answering my questions.
Hey WingSpan,
A reserve in Shopify Payments is a temporary hold on a portion, or sometimes the full amount, of transactions processed through Shopify Payments for a specified period. The purpose of reserves is to make sure there are funds available to draw from to support any disputes, refunds, or chargebacks. For example, if a customer disputes a charge or requests a refund, the funds held in reserve can cover these.
What Reserved Funds Do:
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Reserved funds are held temporarily and cannot be accessed until the reserve period ends.
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They ensure that funds are available to handle disputes and refunds that might occur after a sale.
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At the end of the reserve period, any remaining reserved funds that are no longer needed are returned to you in full.
Applicability to Shopify Payments Only: Reserves are specific to Shopify Payments. They apply only to transactions processed through Shopify Payments and are not applicable to other third-party payment gateways.
Much more information on reserves can be found here.