An account level reserve on Amazon is a portion of money that Amazon withholds from paying out to a seller in case of chargebacks or other problems.
Amazon Pay needs a reserve to handle financial obligation resulting from consumer disagreement over transactions, such as chargebacks and claims covered by the Amazon Pay A-to-z Guarantee. Based on the Reserve Tier that applies to you, a tiered model determines the reserve rate and quantity.
When the seller has established a strong track record of sales and customer satisfaction, these reserves are normally released after a predetermined amount of time. Amazon has taken this move to protect the security of the transactions and lower the chance of fraud or other problems.
For example, a seller who generates $10,000 in sales will have an account level reserve. As a reserve, Amazon may keep aside a specific amount, say 10%. In this scenario, $1,000 would be kept in reserve and $9,000 would be paid to the seller. The $1,000 reserve would be given to the seller after a specified amount of time or if the seller has shown a solid track record.
Another illustration: If Amazon withholds 20% and the seller earns $10,000, $2,000 would be kept in reserve and $8,000 would be paid to the seller.
Let us look at the specific reserves that Amazon applies to sellers accounts
Tier 1 Amazon Account Reserve
Once a seller completes registration and begins conducting transactions, they are placed in Reserve Tier I. Under this tier, Amazon holds 100% of the funds received from processed transactions for seven days after the transaction processing date before automatically disbursing them to the seller’s bank account. Additionally, Amazon will retain any funds related to unresolved transaction disputes.
Tier 2 Amazon Account Reserve
The seller will be promoted to Reserve Tier II if they have completed at least 100 completed orders with Amazon during the course of a year of utilizing Amazon Pay. The Reserve Tier II amount is equal to the greater of 3% of the seller’s daily average processed payments over the previous 28 days or the total of all pending purchase issues (chargebacks and Amazon Pay A-to-z Guarantee claims).
If a seller has been an Amazon Pay merchant for at least six months, has completed at least 100 orders, and has kept an Order Defect Rate (ODR) below 1.0%, their Amazon Pay account may be considered for an upgrade to Reserve Tier II. The seller can see their ODR data under their Seller Central.
You need to contact Amazon to request consideration for an upgrade to Reserve Tier II.
Tier II-Plus Amazon Account Reserve
If you have kept your ODR below 1.0% on average over the last 60 days while in Reserve Tier II, you are automatically promoted to Reserve Tier II-Plus. On your Seller Central, you can review the details about your ODR.
Only the amount of unresolved transaction disputes are held by Amazon Pay if you are placed in Reserve Tier II-Plus (chargebacks and A-to-z Guarantee claims). You will be downgraded to Reserve Tier II without warning if your ODR ever rises beyond the 1.0% cutoff point until you once again achieve the requirements for Reserve Tier II-Plus.
How Long Does Amazon Hold Funds in The Account Level Reserve?
Money may be retained in an account level reserve on Amazon for a variety of periods of time. Before releasing funds to the seller, Amazon may withhold them for a time period of between 14 and 90 days to make sure there are no problems with the transactions, such as chargebacks or consumer complaints.
The precise amount of time will depend on Amazon’s individual policies and risk evaluations, as well as the seller’s track record and performance.
When Is Your Amazon Account Level Reserve Available For Pay Out?
The availability of an account level reserve for payout on Amazon can vary depending on the specific policies and risk assessments of Amazon, as well as the seller’s history and performance.
In general, the reserve is usually released after a certain period of time, typically 14-90 days, to ensure that there are no issues with the transactions such as chargebacks or customer complaints before releasing the funds to the seller.
Additionally, the reserve can be released when the seller demonstrates a good track record of sales and customer satisfaction, Amazon may release the reserve early or release more funds than it had originally held.
It’s important to note that Amazon’s policies and procedures are subject to change, and the exact timing for release of reserves may vary. Therefore, it’s advisable to check Amazon’s terms and conditions and the seller central for the most up-to-date information.
When do I get paid by Amazon after an order is delivered to a customer?
When an order is delivered to the buyer and there are no returns or any disputes, Amazon normally pays vendors within 14 days. This period is known as the “settlement period.” After deducting any necessary fees and reserves, Amazon will process the payment to the seller.
If there are no problems with the order or the seller’s account after the settlement period, the monies will be released to the seller.
It is crucial to keep in mind that the precise time of payments may vary based on the payment method chosen by the seller and may be impacted by holidays or other reasons. The account level reserve that was applied to the seller’s account may also have an impact on the payment procedure.
It’s recommended to check the seller central for more details on the payment schedule and to ensure the correct bank account information is provided to Amazon