Overview of reserves in Shopify Payments

In Shopify Payments, reserves are designed to protect against potential losses stemming from disputes and refunds.

Understanding reserves in Shopify Payments

A reserve is a temporary hold on a portion, in some cases a full amount, of transactions processed through Shopify Payments for a specified period. Reserves serve as a protective measure against potential losses that might arise from processing activities, such as chargebacks and refund volumes. Reserves generally don't stop you from accepting payments through Shopify Payments, unless explicitly communicated otherwise. The terms of reserves are communicated to you using email.

Reasons for using reserves in Shopify Payments

Shopify Payments requires reserves to ensure that funds are available to handle disputes and refunds that might occur, such as instances where you accept payments from customers but do not meet their expectations. This could include scenarios such as unfulfilled orders, damaged products received by the customer, or failure to process a refund request.

In the event that a customer opens a dispute with their bank, the payment amount and any relevant dispute fees are deducted from your account.

If a refund or dispute exceeds the sales amount, then the reserve is used immediately. At the end of the reserve period, the remaining reserve funds that are no longer required to address future refunds or disputes are returned in full.

Factors leading to reserve implementation on an account

A reserve might be initiated on an account following an assessment that identifies an increased level of risk associated with your business. This evaluation considers various risk indicators, including but not limited to the following indicators:

  • Businesses with extended billing cycles: These types of businesses are particularly vulnerable to disputes from customers discontinuing services or altering purchase decisions. For example, annual subscriptions.
  • Elevated chargeback activity: Chargebacks can occur for multiple reasons, such as transaction disputes, unrecognized transactions, delayed product delivery, or customer dissatisfaction.
  • Increased refund rate: Indicates challenges in order fulfillment or issues with product quality, such as damaged goods or sizing discrepancies.
  • Industries with extended delivery timelines: Higher risk due to potential delays or disruptions in fulfilling orders. For example, event organizers, custom orders, and pre-orders.
  • Significant volume surges: Difficulty in managing customer demand effectively, potentially indicating fraudulent activities.

Types of reserves in Shopify Payments

Reserves established for an account can be classified as either fixed amount reserves or percentage-based reserves:

  • Fixed amount reserve: Involves setting aside a specific sum for a defined duration. For instance, $1000.00 USD might be reserved for 120 days to ensure that funds are available to address potential chargebacks or refunds following a period of increased sales volume.
  • Percentage-based reserve: Withholds a certain percentage of transactions for a specified period. For example, maintaining a 10% reserve for 120 days means that 10% of each transaction processed through Shopify Payments will be held in reserve for the subsequent 120 days from the reserve's establishment, while the remaining 90% will be disbursed as part of the regular payouts during this period.

Calculating reserve amount in Shopify Payments

The reserve amount calculation is based on the risk level associated with your business, focusing on potential losses from disputes or refund volumes exceeding what you can manage based on your sales volume.

Learn more about ways that you can prevent different types of chargeback and inquiries.

Monitor the status of a reserve

You can track the value of your reserved funds from the Shopify Payments payouts page. The balance includes pending payouts and reserved funds, providing an approximation of the reserved funds at any given time.

The Balance section on the Payouts page is calculated as the total of Reserved funds and Next payout. This means that the Balance represents the overall account balance, including reserved funds.

For example, if your balance displays $10,000 USD, with $8,000 USD in reserved funds and $2,000 USD in the next scheduled payout, then your balance consists of $8,000 USD in reserve and $2,000 USD allocated for future payouts.


  1. From your Shopify admin, go to Settings > Payments > View payouts.
  2. Check your balance in the Reserved funds section.

Extending, appealing, and removing reserves

Before a reserve expires, your account is reviewed to determine whether to keep, reduce, or raise the reserve based on risks, such as chargebacks or refunds. To appeal a reserve, reply to the email detailing the reserve terms within the specified timeframe.

Each reserve has an expiry date, and a risk assessment decides whether to lift, maintain, reduce, or increase the reserve. When you reach the reserve expiry date, and if no extension is required, the reserve amount is included in upcoming payouts. It might take several business days for the reserved funds to be processed for payout.

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