Account Level Reserve Amazon [DOES AMAZON HOLD SELLERS’ MONEY?] - Getida (2024)

You’ve probably heard people say “cash flow is king” before. Having a steady supply of money coming into you is super important.

This is especially true for Amazon sellers like you. You need cash to buy more stuff to sell during busy times. One thing that can hinder your cash flow is something called “Account-Level Reserve.”

This is when Amazon holds back some of the money it owes you. In this post, we’ll explain reserves, why Amazon requires them, and, most importantly, what you can do about them.

We’ll also share how we can help you at Getida by maximizing overlooked FBA reimbursem*nts and getting you additional cash flow. Sign up with us today and get your first $400 in reimbursem*nts free of charge.

Let’s say you’re running a successful brick-and-mortar store. At the end of each day, you count your earnings and deposit them in the bank.

Now, Amazon is a larger digital version of your store. The cash here works differently. Instead of giving you immediate access to all your sales revenue, they hold back a portion. This held-back fund is what we call the Account-Level Reserve.

This reserve fund applies to the withheld money beyond the standard 14-day payment cycle.

Let’s break it down with a simple example:

Say you sell a watch for $100 on July 1st. You’d expect to see that money in your account around July 15th (give or take a few days). However, if Amazon applies an account-level reserve, a portion of that $100 might be held back, typically for at least another 14 days.

The duration depends on factors like order defect rates, account history, and performance metrics.

The Account Level Reserve serves as a financial safety net, protecting both Amazon and its customers from potential issues like:

• Refunds
• A-to-z Guarantee claims
• Chargebacks

Consider it Amazon’s way of ensuring you always have a way to cover unexpected costs or customer dissatisfaction.

Here’s a quick breakdown of how it works:

1. You make a sale on Amazon
2. Amazon collects the payment from the customer
3. Instead of immediately transferring the full fund to you, Amazon holds back a portion (the reserve)
4. After a certain period, if there are no issues with the order, Amazon releases the reserve to you

While inconvenient, reserves protect all parties involved, including buyers.

Before this account-level reserve policy, sellers could disappear after receiving payments but before shipping orders. Now, you have to resolve any customer issues before you access funds.

Regardless of Tier status, the amount of seller’s money held can be raised, lowered, or removed at Amazon’s discretion. These decisions to change the amount of sellers’ money held typically relate to order quality.

In addition, whenever bank accounts information changes, Amazon applies a 3-day hold of sellers’ money disbursem*nts effective the day on which the bank information changed. Amazon cannot disburse sellers’ money without a bank account associated with your Seller Central account.

Amazon decides the account reserve amount using three tiers. These tiers are based on account age, sales history, and performance metrics.

Let’s break down these tiers:

Tier I: For New Sellers

If you’re just starting on Amazon, welcome to Tier I!

Here’s what you need to know:

• Amazon holds 100% of your processed payments for 7 days after the transaction date
• All unresolved transaction disputes (chargebacks and Amazon Pay A-to-z Guarantee claims) are also held

Think of this as Amazon’s way of getting to know you. They’re being cautious!

Tier II: For Established Sellers

After a year of selling on Amazon (or sometimes sooner if you meet specific criteria), you might graduate to Tier II.

Here’s how it works:

• Amazon holds either 3% of your daily processed payments (averaged over 28 days) or the total amount of unresolved disputes – whichever is greater.
• You need at least 100+ orders over 12 months or 6 months with an Order Defect Rate under 1% to qualify.

Tier II is like Amazon saying, “Hey, we trust you a bit more now!”

You can request consideration for an upgrade to Reserve Tier II by email. Amazon will review your request and decide whether you can be upgraded.

Tier II-Plus: The Best Sellers

This is where you want to be.

To qualify for Tier II-Plus:

• You (as a Tier II seller) need to maintain an Order Defect Rate (ODR) below 1% for 60 days.
• Amazon only holds the funds for the number of unresolved disputes.

It’s like getting a gold star from Amazon. But remember, if your ODR goes above 1%, you’ll be bumped back down to regular Tier II.

Remember, these tiers aren’t set in stone. Amazon regularly reviews accounts and may adjust your tier based on your performance.

Now, let’s talk about getting your hands on that money. As we said in the beginning, cash flow is king in any Amazon business!

The release process follows this pattern:

1. Amazon holds the reserve for a set period (usually 7 to 14 days after delivery for Tier I).
2. If no issues arise during this time, Amazon releases the funds.
3. The released funds become available for transfer to your bank account.

But even after Amazon releases the funds, it can take 3-5 business days for the money to reach your bank account.

So, from the moment of sale to having cash in hand, it could take closer to 21 days. In extreme cases, earnings could remain unavailable for those facing account reviews or chargebacks for 90 days or more.

You need to note a few special considerations:

• Amazon closely monitors the quality of all sellers’ orders. They may review your account anytime, regardless of your current Reserve Tier or ODR. Your reserve requirements could go up, down, or even be removed entirely.
• If you change your bank account information, Amazon applies a one-time, 3-day hold on payments. This hold starts the day the change takes effect.
• Remember—Amazon must send you money through a bank account linked to your Seller Central account. Without a bank account, there will be no disbursem*nts!

This waiting game can be tiring, especially if you need capital to restock inventory or cover other selling expenses. That’s where we at Getida come in handy.

We specialize in Amazon FBA reimbursem*nts and can help you recover funds you might be owed, potentially offsetting some of the cash flow challenges the Account Level Reserve poses.

Our advanced auditing technology digs deep into your FBA transactions, uncovering discrepancies you might have missed.

We don’t just stop at finding potential reimbursem*nts – we handle the entire claims process for you. Our experts, including former Amazonians, know how to navigate the complex world of FBA reimbursem*nts.

Sign up for Getida today and let us help you turn those overlooked discrepancies into cash flow for your Amazon business. Remember, the first $400 in recoveries is on us!

While some reserve situations are unavoidable, you can take proactive steps to minimize held funds:

• Maintain excellent seller metrics: Keep your Order Defect Rate (ODR) below 1%. This includes factors like negative feedback, A-to-z Guarantee claims, and chargebacks.
• Ship promptly and provide accurate tracking: This reduces the likelihood of delivery-related issues and customer complaints.
• Communicate clearly with customers: Respond promptly to messages and address concerns before they escalate to formal complaints.
• Use Fulfillment by Amazon (FBA): FBA can help improve your metrics as Amazon handles storage, shipping, and customer service.
• Keep detailed records: This helps you quickly resolve any disputes.
• Diversify your sales channels: Don’t put all your eggs in one basket. Selling on multiple platforms can help balance out cash flow issues.
• Build a cash reserve: A financial cushion can help weather any temporary cash flow challenges.

Remember, the goal is to build trust with Amazon and your customers. The more reliable you are as a seller, the more likely you are to move up the tier system and reduce the impact of the Account Level Reserve.

Another way Amazon holds sellers’ money is when it makes mistakes in mishandling inventory and customer returns on behalf of FBA (Fulfillment by Amazon) sellers. More often than not, Amazon doesn’t reimburse sellers’ money for these mistakes. Rather, it is the sellers’ responsibility to identify the errors to file claims within 18 months of occurrence.

The problem for recovering sellers’ money, in this case, is the time and effort required to comb through transactions not only to identify errors but also to file and follow up on claims. Most sellers are too busy managing and growing their businesses to dedicate the necessary resources to this. However, there is the risk of losing significant sellers’ money unclaimed because of lack of time.

Fortunately, there is an easy solution to this not-uncommon problem.

GETIDA (GET Intelligent Data Analytics) offers an end-to-end solution combining a powerful software tool with an experienced team of former Amazon employees who file and follow up on claims. There is no charge to use the software or file claims. You are only charged a percentage of approved claims to recover sellers’ money for FBA reimbursem*nt.

GETIDA is the largest provider dedicated to finding and obtaining sellers’ money owed FBA sellers. A member of Amazon’s Service Provider Network and the Amazon Marketplace Appstore, GETIDA was the 2020 winner of the Gold Stevie Award in the SaaS Enablement as a Service category from the American Business Awards. GETIDA sponsors various seller education programs and events, hosts the podcast Prime Talk, and offers complimentary consulting services on how Amazon sellers can grow their businesses.

It’s simple and easy to sign up with GETIDA, and there’s no charge to sign up. Go to the GETIDA website and click the “Free Signup” button. There’s no obligation and you can get $400 in free FBA Reimbursem*nts to try them out. free.

Let’s address some common questions that you might have about the Account Level Reserve:

How Long Does Amazon Hold Account Level Reserve?

For new sellers, Amazon typically holds reserves for 21 days post-delivery before allowing transfers. Established sellers in higher tiers will see funds released around 14 days after buyers receive orders.

Issues like defects could add further delays, which are less predictable case-by-case.

Why is My Amazon Account Level Reserve so High?

If your reserved funds comprise a large portion of your balance, it likely signals elevated risk in Amazon’s assessment. Common reasons include high return rates, chargebacks, reviews below targets – anything indicating potential unfulfilled payables.

Your reserve should gradually decrease as you strengthen your seller metrics while following policies.

What is the Request Transfer Button?

The Request Transfer button allows you to initiate a transfer of available funds before the regular payout date. However, it’s not a way to bypass the Account Level Reserve.

When you use this feature:

• Only funds that have been released from the reserve will be transferred.
• It resets your payment cycle, potentially delaying future payouts.

Use this feature cautiously and only when necessary to avoid disrupting your regular payment schedule.

What is the Typical Payment Cycle for Amazon Sellers?

You’ll generally experience a two-week payment cycle. Your current earnings become available 14 days after the sale, though funds take 3-5 additional days to transfer into bank accounts.

If you’re a new seller, you may need to wait 21 days, and issues can cause added delays. Planning for these built-in lags is key to smooth operations and growth.

By now, you should clearly understand Amazon’s account-level reserve policy. But you should also realize that unpredictable held funds can still hinder your store, especially when you’re starting out and don’t have much cash.

That’s where Getida can help.

We empower sellers like you by transforming overlooked FBA reimbursem*nts into reliable revenue streams. Our auditing technology uncovers various FBA discrepancies that you might miss reconciling manually.

We have a successful track record of securing reimbursem*nts on over 90% of claims filed, delivering our clients 166% higher reimbursem*nts than those not using our platform.

Sign up with Getida for an audit review today, and you’ll receive the first $400 in reimbursem*nts free of service fees!