Reserves are required to ensure your business has adequate funds to cover chargebacks and refunds from your customers. The size of the reserve is based on the level of risk associated with your business. See the status of any reserves in the Dashboard.

What is a reserve?

A reserve is a temporary hold on a portion of a business's funds for a predetermined period of time. The function of a reserve is to ensure that when a customer initiates a refund or chargeback, the customer can receive their funds in a timely manner. Customer refunds and chargebacks are pulled directly from the business’s reserved balance. Stripe holds these funds to protect end customers from unexpected settlement difficulties to ensure our users can continue to accept payments with Stripe.

Reserves do not affect a business' ability to continue accepting payments with Stripe, so businesses will still be able to continue operating as normal.

Before we place a reserve, we send our users information about the reserve terms, the percentage of the funds that will be held, and the time period for which the reserve will be applied. Normally, this is 30—90 days to give time for customers’ refunds and chargebacks to process. Reserves are a common industry practice used by payment processors to ensure that businesses are able to cover chargebacks and refunds from their customers. Funds held in reserve will be paid out as soon as possible once the reserve term has ended (minus any customer refunds or disputes that may have been covered by the reserve).

Why are reserves necessary?

As a payment processor, Stripe is responsible for the chargebacks and refunds that arise when businesses take payments from their customers, but are unable to fulfill their orders. When disputes occur, the payment amount, along with any additional dispute fee levied by the card network, is usually deducted from a business' account balance.

However, it is possible that the funds in the account might not be sufficient to cover any disputed amounts. To avoid such situations, we place reserves to cover any expected future disputes. The reserve exists to cover anticipated losses. If there are none, the reserve is lifted. We understand this process can be painful, but ultimately this helps protect both our user’s business and the customer.

For other frequently asked questions about reserves, please visit the Reserves – FAQs page

What are the different types of reserves and how do they work?

Stripe uses two different types of reserves: fixed reserves and rolling reserves.

Fixed reserve – specified release date

With a fixed reserve, a set percentage of funds from each new transaction is held in reserve until a specified release date. On the release date, the reserved funds are released to the account's available balance and made available for the next payout.

In the example below, a US business has a 25% reserve and a fixed release date of 30 August, with a standard payout timing of two working days:

Rolling reserves

With a rolling reserve, a set percentage of funds from each new transaction is held in reserve on a rolling basis (e.g. a 30-day rolling window). As individual transactions move beyond the time window, any reserved funds from those transactions will be released to the account's available balance and made available for the next payout.

In the example below, a US business has a 25% reserve and a rolling release window of 30 days, with a standard payout timing of two working days:

Reserve + balance transfer

In addition to one of the above reserve plans (fixed or rolling), which only affect new transactions, you may also see a portion of your existing balance transferred into reserves.

In the example below, a US business has a 25% fixed reserve and a 25% balance transfer with a release window of 30 days, with a standard payout timing of two working days: