Although most people know Amazon as an e-commerce platform that sells almost every product imaginable, the company is involved in several other business ventures. For example, Amazon welcomes millions of third-party sellers to offer their products on the Amazon platform.
If you’re considering selling something on Amazon, you probably have some questions before getting started. One thing you may be curious about is something called account level reserve. I’ve looked into everything you need to know about account level reserve on Amazon!
What Is Account Level Reserve Amazon In 2023?
Account level reserves are funds that Amazon withholds in a seller’s account to ensure they have enough money to pay for things like chargebacks, returns, and other financial obligations as of 2023. You can find these funds in your Amazon “Payments” report under the “Statements View” tab. Reasons for account level reserves include chargebacks and open A-to-Z Guarantee claims.
If you want to learn more about account level reserves on Amazon, more reasons this occurs, why sellers need account level reserves, if they are normal and much more, keep reading! I’ve looked into everything you need to know!
What Is An Account Level Reserve On Amazon?
Account level reserve is a certain amount of money in an Amazon seller’s account.
That said, these funds are kept in the account level reserve to ensure a seller has enough money to pay for any financial obligations not covered by “Delivery Date-Based Reserve Policies.”
Also, account level reserve is a normal part of a seller’s account on Amazon. So, if you see it on your account, there’s no need to be concerned.
Moreover, you can find your money in the “Account Level Reserve” section of the “Statement View” tab on your Amazon “Payments” report.
Why Do Amazon Sellers Need Account Level Reserves?
There are several reasons for an account level reserve on Amazon. Essentially, Amazon wants to ensure sellers have enough money to cover specific charges that may arise from doing business on the platform.
The Seller Has To Open An A-To-Z Guarantee Claim
If a customer files an A-to-Z Guarantee claim, the claim amount is reserved in the account level reserve section of a seller’s account until the claim is resolved.
That said, an A-to-Z Guarantee claim is something Amazon provides for third-party products. Essentially, Amazon ensures sellers will provide timely deliveries and quality products. Usually, claims are handled quickly.
But, sometimes, these claims can take up to 14 days to resolve. After the claim is processed, the reserve is released.
A Seller’s Orders Have Received A Chargeback
Another reason there may be funds in your account level reserve is because of chargebacks. With that, Amazon reserves funds in a seller account if there are any chargebacks from transactions within the last 90 days.
After the chargebacks are processed and complete, the reserve is released.
A Seller’s Performance Has Dropped
If an Amazon seller’s performance falls below the company’s benchmarks, there might be money in the account level reserve section.
For example, lower ratings most often correlate with more customer claims, chargebacks, and returns. Therefore, Amazon wants to ensure money is available to cover these costs.
A Seller’s Account Is Under Review
Amazon usually reserves funds if the company notices unexpected changes in a seller’s sales or account activity. Also, if you are a new seller that has longer estimated delivery times, Amazon will reserve funds.
Sometimes, the status of your tax registration results in Amazon reserving funds. Also, Amazon withholds funds to pay for income tax based on your sales.
Moreover, a seller may have money in their account level reserve if multiple circumstances call for it.
Are There Different Account Level Reserve Tiers?
Yes, there are three different tiers of account level reserves on Amazon. With that, the difference between these tiers is the reserve amount and the eligibility requirements.
What Are The Differences Between Amazon Account Level Reserves?
As previously mentioned, there are three different account level reserve tiers on Amazon. That said, these tiers are called Tier One, Tier Two, and Tier Two-Plus, and here is a summary of each level:
Amazon considers new Amazon Pay merchants to fall into this category. That said, the reserve amount is 100% of the payments that were processed through a seller’s account over the past seven days.
Also, the reserve amount includes the value of the unresolved transaction disputes.
Tier Two sellers are Amazon Pay merchants that have had an account for a year and completed a minimum of 100 orders.
Regarding the reserve amount, it is the higher of 3% of the daily processed payments (averaged over the past 28 days) or the value of all the unresolved transaction disputes.
The reserve amount for this category is the value of all unresolved transaction disputes. Also, sellers who maintain an average ODR of less than 1% over the past 60 days fall into this category.
Account level reserves are funds that Amazon sets aside to ensure an Amazon seller has enough money to cover certain financial obligations.
For example, if a seller has open A-to-Z Guarantee claims or if their account has dipped below specific standards, Amazon will reserve funds.
Also, account level reserves are a normal part of selling on Amazon, so don’t be concerned if you have some funds in this account.