Can’t get your reserve released?
If an ISO or an acquiring bank is holding your reserve, call me.
In short
A rolling reserve on a merchant account holds back part of each day’s sales, and an up-front reserve holds a lump sum, to cover chargebacks. Holds often run 90 to 180 days, and many agreements keep the reserve 180 days after you leave. Your agreement sets the release date. If it passes and the money doesn’t come back, I can help you demand it.
What is a rolling reserve on a merchant account?
A rolling reserve keeps back a percentage of each day’s card sales and releases each day’s amount after a set period. New sales go in while older amounts come out. A fixed or up-front reserve works differently. It is a lump sum, held from the start or demanded later, for example after a review.
| Rolling reserve | Up-front (fixed) reserve | |
|---|---|---|
| What is held | A share of each day’s sales | A lump sum |
| When it is set | When the account opens, or after a review | At the start, or demanded later |
| When it comes back | Each day’s amount, after the set period | On the date in your agreement, often after you leave |
Why do processors hold reserves?
A reserve protects the processor against chargebacks, refunds and fees that arrive after a sale has been paid out to you. It is written into your agreement, or demanded after a review of your account. A termination for cause can also bring a reserve, and a MATCH listing.
How long can a processor hold my reserve?
Holds often run 90 to 180 days. Many agreements keep a reserve for 180 days after you leave, to cover late chargebacks. Your agreement may set a different period, so its terms come first: the amount, the schedule and the release date. Problems begin when that date passes and nothing is paid.
Who is holding my money: the ISO or the acquiring bank?
Often more than one company is involved. An ISO, or independent sales organization, signs merchants up and services the account. The acquiring bank holds the merchant account with the card networks. Your reserve can sit with either one, or be split between them. Finding out which, and under which agreement, comes first.
What if the release date has passed?
Then the questions are what you are owed, and who owes it. I rebuild the reserve from your statements: what went in, what was taken for chargebacks, and what should have come back by now. As a CPA, I can show the gap in numbers, not just in words.
What I do
- Identify who holds the money, the ISO, the acquiring bank or both, and under which agreement.
- Calculate what should have been released, and by when, from your reserve terms and statements.
- Demand it in writing, then pursue it through negotiation, arbitration or court, whichever your agreement allows.
Which records matter most in a reserve dispute?
In a reserve dispute, the dates matter. Keep every reserve balance statement, the termination notice, and every message about the reserve, including notes of phone calls. Do not count on the processor’s portal staying open after you leave. Download your statements while you still can.
What to bring to the first call
A first call goes further when I can see the paperwork. These documents usually show who holds the reserve, under which agreement, and what should have come back by now. Send what you have; gaps are normal, and I can tell you what else would help.
- Your merchant processing agreement and any reserve addenda
- The termination notice, or any notice that set up or changed the reserve
- Your reserve balance statements and twelve months of processing statements
- Your messages with the ISO, processor or acquiring bank
Common questions
Can my processor take chargebacks out of my reserve?
Yes, that is what a reserve is for. Each deduction should still trace to a real chargeback, refund or fee under your agreement. I check the deductions against your statements.
Can a processor increase my reserve?
Many agreements let the processor change reserve terms after a review of your account. Whether it followed the terms and notice in your agreement is the question I check first.
Can I get my reserve back early?
Usually only if the processor agrees, or your agreement provides for it. Leaving the processor often starts the after-you-leave holding period rather than triggering an early release.
Do I have to go to court to get my reserve back?
Not necessarily. Many disputes start with a written demand. If that fails, your agreement decides the forum, which is often arbitration with written notice before you can file.
What if the ISO and the bank each say the other has my reserve?
Then the agreements decide. I ask each one, in writing, which agreement covers the reserve and what it holds, and work from that paperwork.
Talk to me about it
Call me, or email your latest reserve statement with a few lines on what happened.