What is the Amazon Account Level Reserve? Keep Your Cash Flow Strong and Avoid Holds on Your Revenue
Are you an Amazon seller wondering about the Amazon Account Level Reserve? If so, you've come to the right place - here's all the info you need to know about account level reserve. Understanding this policy is crucial for managing your FBA business effectively.
The Amazon Account Level Reserve is a percentage of your FBA sales revenue that Amazon holds to cover chargebacks and refunds. It applies to both new and experienced sellers, and the reserve period lasts for 7 days after order delivery. New sellers may experience delayed payouts for 4-6 weeks.
To be eligible for payout, you need to have positive funds, a linked bank account, and a valid credit card.
In this article, we'll explore how to avoid the account level reserve, check your current reserve amount, what happens to the reserve if you stop selling on Amazon, and the different reserve tiers. Stay tuned for all the essential information you need to know.
The Amazon Account Level Reserve Explained
The Amazon seller account level reserve used to be called the Unavailable Balance. It pertains to the percentage of your Amazon sales, which Amazon holds back from Amazon payout to cover chargebacks and refunds - because the seller is responsible for paying these, not the customer. The reason behind the Amazon reserve account is to protect both the customer and Amazon from potential losses incurred by customer refunds.
How does the account level reserve work?
When you make sales on Amazon, a percentage of your revenue is held in reserve by Amazon to cover any chargebacks or refunds that may occur. This reserve period lasts for 7 days after the delivery of the order. It helps ensure that there are funds available to address any customer issues that may arise.
Why does Amazon place a reserve on seller accounts?
The Amazon account level reserve exists to protect your business - in addition to Amazon and your customers of course, as previously stated. The money Amazon uses to cover the cost of unfulfilled orders, chargebacks, returns, refunds, or guarantee claims comes from this account level reserve section. It allows customers a timeframe to issue a complaint or return an item - which is why Amazon will hold on your funds for 14 days or more. You might have to wait into the next cycle in order to get payouts from Amazon.
How is the Amazon reserve amount determined?
Determining the reserve amount is based on factors such as sales performance, order defect rate, and account age. Amazon takes these factors into consideration to assess the risk associated with each seller's account.
The reserve amount can vary for different tiers of sellers. We go into the tier system a little later in this article.
How long does Amazon hold the reserve funds?
Here are some reasons why you'll normally wait for 14 days or more
Rollover of Balances: If orders are delivered within 7 days of your payout date, the remaining balance will carry over into the next payment period.
Processing Time: Actual money transfers may take 3-5 business days to be posted to your account. As a result, you receive payments from Amazon approximately every 14 days.
Account Level Reserve: Amazon reserves the right to hold back all or a portion of your payment for more than 14 days as an "account level reserve"
How to avoid an account level reserve on Amazon?
To avoid an account level reserve on Amazon, you need to meet certain requirements. These include maintaining a high seller rating, providing shipping confirmation, avoiding open A-to-Z guarantee claims, and following Amazon's benchmarks.
However, there are actions that can trigger an account level reserve, such as falling below Amazon's standards, having payment information errors, or being under review.
To minimize the reserve amount, you can respond promptly to guarantee claims and chargebacks, partner with a flexible funding partner, arrange longer payment plans with suppliers, or build emergency savings.
Unfortunately, there's no way to release the reserve funds earlier as Amazon holds them for a specific period to cover refunds and chargebacks.
What are the requirements to avoid an account level reserve?
Preventing account level reserves is achievable through upholding a strong seller rating. Elevating your Amazon rating is straightforward: prioritize quality products, timely deliveries, and excellent customer support.
These requirements ensure that you're providing excellent customer service and minimizing the risk of chargebacks or refunds.
By staying on top of your performance metrics and delivering orders in a timely manner, you can help prevent the need for Amazon to hold a reserve on your account.
What actions can trigger an account level reserve?
Be mindful of your performance and sales practices, as certain actions can trigger a precautionary measure that holds back a portion of your earnings to safeguard against potential issues.
Actions such as not providing shipping confirmation, having open A-to-z guarantee claims, falling below Amazon's benchmarks, or experiencing chargebacks can all lead to an account level reserve.
It's important to address these issues promptly to avoid the reserve and ensure timely access to your funds. If your FBA account is in good standing, you can expect the amount of money Amazon sets aside to lower.
Are there any tips to minimize the reserve amount?
Maximizing your seller performance and maintaining a strong sales record can help reduce the amount held back for potential issues. By providing accurate shipping confirmation and promptly responding to guarantee claims and chargebacks, you can minimize the reserve amount. Ensuring your account meets Amazon's benchmarks is also important.
Additionally, building emergency savings and diversifying your sales channels can help improve cash flow. You can also arrange longer payment plans with suppliers to decrease the need for a high account level reserve.
How can I find the Amazon current reserve on my seller account?
To check the current reserve amount on your Amazon seller account, you can access the Chart of Accounts and the Payments report. These tools will provide you with information about the reserve amount and percentage.
The Amazon Seller Payment Disbursement Schedule is every 14 days, but payouts may be delayed if an account level reserve is in place. Amazon updates the reserve amount regularly to reflect any changes in your account's performance and order history.
Where can I find the current reserve amount on Amazon?
The present reserve amount allocated to each seller is visible in the Chart of Accounts on the payments dashboard. This amount is subject to variation based on your sales volume and payment history. Additionally, you can review your reserve percentage, which signifies the portion of your Amazon Seller FBA sales revenue held in the reserve account.
What is the Amazon Seller Payment Disbursement Schedule?
Get ready for your Amazon Seller payment disbursement schedule - it's time to see when those funds will be rolling in!
Amazon Seller payments occur every 14 days, which means you can expect to receive your payouts on a regular basis. However, it's important to note that there may be a delay of 2-5 business days for the funds to transfer to your bank account.
So keep an eye out for those payments and plan your finances accordingly. Once your Amazon Settlement (payment) date has passed, you can access your Amazon payment statement. This statement provides a comprehensive overview of your payments, including details about fees, reimbursements, and transactions related to your orders.
How often does Amazon update the reserve amount?
Once the reserve period ends, you'll start receiving your payouts on a regular basis. It's important to note that Amazon updates the reserve amount periodically. This means that the amount of money held in reserve may change over time. Amazon takes into account factors such as your order defect rate, account age, and order fulfillment when determining the reserve amount. It's a good idea to regularly check your Chart of Accounts and Payments report to stay updated on the current reserve amount and percentage.
What happens to the current reserve account on my Amazon seller account if I no longer sell on the platform?
If you decide to stop selling on Amazon, you'll still be eligible to receive the reserve funds that were being held in your account. However, it may take some time to receive these funds after closing your account.
The process to get a reserve refund as a former seller typically involves contacting Amazon Seller Support and providing the necessary information for them to release the funds to you. Keep in mind that there may be exceptions for accounts without any selling activity, so it's important to reach out to Amazon directly for specific details.
Will I receive the reserve funds if I stop selling on Amazon?
You will receive the reserve funds if you stop selling on Amazon. Once you decide to no longer sell on the platform, Amazon will release the reserve funds to you. This means that any money that was being held in reserve to cover chargebacks, refunds, or guarantee claims will be returned to you.
It's important to note that the release of the reserve funds may take some time, as it depends on the specific policies and processes of Amazon.
How long does it take to get the reserve after closing the account?
After closing your Amazon account, it may take some time for you to receive the reserve funds. The exact timeline can vary, but typically it takes around 90 days for Amazon to release the funds.
During this time, Amazon will review your account and ensure that all refunds, chargebacks, and other financial matters are settled. Once the review process is complete, Amazon will transfer the reserve funds to your designated bank account.
What is the process to get a reserve refund as a former seller?
If you're a former seller wondering about the process to get a reserve refund, here's what you need to know.
To initiate the refund, you'll need to contact Amazon Seller Support and provide them with the necessary information. They will then review your account and the reasons for the reserve hold.
If everything checks out, they will release the reserve funds to you. It's important to follow up and provide any additional information they may require to expedite the process.
Are there any exceptions for accounts without any selling activity?
Wondering about exceptions for inactive accounts? If you have an Amazon seller account that has no selling activity, unfortunately, there are no exceptions for the account level reserve. The reserve policy applies to all sellers, regardless of their selling activity.
This means that even if you haven't made any sales or received any refunds or chargebacks, a percentage of your account balance will be held in your reserve account. It's important to be aware of this policy and plan your finances accordingly.
What are the different Amazon reserve tiers?
Amazon Pay offers different tiers for its merchants, providing various benefits based on their performance and history. Here's a revised version of the information:
Tier I: As a new Amazon Pay merchant, you'll start in Tier I by default. In this tier:
100% of your payments processed during the past week will be held in reserve for seven days after the transaction processing date.
Amazon will retain the amount of all unresolved transaction disputes, such as guarantee claims and chargebacks.
Tier II: After a year of using Amazon Pay and completing a minimum of 100 orders, you'll be upgraded to Tier II. Alternatively, you may become eligible for an upgrade to Tier II if you meet the following conditions:
You've been an Amazon Pay merchant for at least six months.
You have a minimum of 100 completed orders.
Your Order Defect Rate (ODR) remains below 1%.
In Tier II, Amazon will hold an amount equivalent to 3% of your daily processed payments averaged over the past 28 days or the total value of unresolved transaction disputes, whichever is greater.
Tier II-Plus: Upon reaching Tier II and maintaining an ODR below 1% averaged over the past 60 days, you'll be promoted to Tier II-Plus. In this tier, Amazon will only retain the number of unresolved transaction disputes.
However, there's a cautionary note: If your ODR reaches the 1% threshold at any time, you'll automatically revert to Tier II until you meet the criteria for Tier II-Plus again. Unfortunately, Amazon won't notify you about this change, so it's essential to monitor your ODR information in Seller Central.
How do reserve tiers affect the amount withheld?
To understand how reserve tiers affect the amount withheld, you need to know that these tiers are based on factors like account age, pending disputes, and order fulfillment. These factors directly impact the amount of your hard-earned money that Amazon holds back. Depending on which tier you fall into, the percentage of payments held in reserve can range from 100% for Tier I sellers to only the value of unresolved transaction disputes for Tier II-Plus sellers.
What are the requirements to move to a lower reserve tier?
In order to qualify for a lower reserve tier, you must meet certain requirements based on factors such as account age, order fulfillment, and resolution of transaction disputes. Amazon evaluates these factors to determine if you're eligible to move to a lower reserve tier.
By maintaining a good account health, resolving transaction disputes, and consistently fulfilling orders, you can work towards reducing the amount of money held in reserve and accessing your funds more quickly.
Can I request a higher reserve tier to secure my account?
Secure your account and gain peace of mind by requesting a higher reserve tier. This will help ensure that you have enough funds to cover any potential chargebacks or refunds. By increasing your reserve tier, you can have a greater level of protection for your business and minimize the risk of running into financial difficulties.
To request a higher reserve tier, reach out to Amazon Seller Support and provide them with any necessary documentation or information they may require.
How long does it take to change to a different reserve tier?
If you're considering changing to a different reserve tier on your Amazon account, you might be wondering how long the process will take. The good news is that transitioning to a different reserve tier can typically be done relatively quickly. Once you've requested the change, Amazon will review your account and make the necessary adjustments.
In most cases, you should see the change reflected within a few business days.
Frequently Asked Questions on the Amazon current reserve account
Can I request a lower reserve amount on my Amazon seller account?
Unfortunately, you cannot request a lower reserve amount on your Amazon seller account. The reserve amount is determined by factors such as your order defect rate, account age, and order fulfillment. It is not something that can be adjusted or changed by individual sellers.
Are there any penalties for exceeding the reserve amount on my Amazon seller account?
There are no penalties for exceeding the reserve amount on your Amazon seller account. The reserve is simply a portion of your funds that Amazon holds to cover chargebacks and refunds.
Can I use the funds in my reserve to cover other business expenses?
Yes, you can use the funds in your Amazon Account Level Reserve to cover other business expenses. The reserve is there to protect against chargebacks and refunds, but you have the flexibility to use it as needed.
Will my reserve amount decrease over time if I maintain a high seller rating?
Yes, if you maintain a high seller rating, your reserve amount may decrease over time. A high seller rating shows good performance and reduces the risk of chargebacks or refunds, which can lead to a lower reserve amount.
Can I transfer funds from my reserve to my bank account before the 7-day reserve period is over?
No, you cannot transfer funds from your reserve to your bank account before the 7-day reserve period is over. The reserve amount is held by Amazon to cover chargebacks and refunds.
In conclusion, understanding and managing the Amazon Account Level Reserve is crucial for Amazon sellers to ensure a smooth cash flow and profitability in their FBA business. By being aware of the reserve amount and percentage, sellers can plan their finances accordingly. Knowing that Amazon withholds a portion of your revenue as a sort of insurance policy, and that the funds won't be deposited into your account for some time, should be factored into your budgets and forecasting. Also, keep your account balance in order so the amount held in your Amazon account can decrease. Avoiding an account level reserve can be achieved by maintaining positive funds, having a linked bank account, and a valid credit card.
Overall, staying informed and proactive is key to navigating the Amazon Account Level Reserve successfully.