Short answer
A share of each day's card sales that a processor holds back for a set period, as protection against future refunds and chargebacks.
A typical reserve holds 5% to 10% of daily volume for 90 to 180 days, releasing each day’s amount when its period ends. Processors set reserves when they see risk: a sudden jump in volume, a high dispute rate, long delivery times or an industry with frequent chargebacks.
A reserve doesn’t cost fees directly, but it ties up working capital. Ask about reserve terms before you sign with any processor. More in chargeback and dispute costs at scale.
Part of our guide to chargeback and dispute costs.
Related terms
- Chargeback: A card payment reversed by the cardholder's bank after the cardholder disputes it, for fraud, a missing product or a billing problem.
- Visa VAMP: The Visa Acquirer Monitoring Program, which tracks merchants' fraud and dispute rates together and penalizes those above Visa's thresholds.