A New Seller’s Guide to Payment Holds

Most eBay sellers will remember the joyous feeling of their very first eBay sale. They may also recall the disappointment to see a ‘pending’ status for the payment, a result of an automatic payment hold for new sellers.

Read on to discover everything a new eBay seller should know about payment holds, from the simple what and why to the answer of the all important question ‘when will I get paid?’

What is a payment hold?

In most cases, eBay sellers receive payment immediately after the item has sold and the buyer has paid.

The recent move to managed payments has slowed this process down, with eBay now issuing payouts within 2 business days of order confirmation.

If a payment shows as pending, it could be because eBay has placed a payment hold on the funds.

Put simply, the purpose of payment holds is to help eBay maintain buyer trust and also meet important legal and compliance requirements.

If a seller does not fulfill their selling obligations, eBay is held liable to assist (and typically refund) the buyer. Payment holds enable eBay to retain funds temporarily to ensure that the buyer can be refunded if there is a problem with the transaction.

Why do payment holds happen?

eBay users payment holds both as a preventative measure as well as a reactive one, taking into account a number of risk factors that may indicate when a seller may not fulfil their selling obligations.

There are a number of reasons why eBay may put a longer payment hold on a seller’s account.

Some examples include:

  • Having a below standard performance level for 90 days or more
  • Unusual account activity, such as a significant rise of Money Back Guarantee cases
  • Sudden change in selling style i.e. selling high value or highly desirable items
  • A buyer has opened an item not received or not as described case
  • Tracking details need to be added to an item for a Money Back Guarantee case to be resolved
  • Administrative issues such as no payment method on file or a verification problem

The most common type of payment hold, however, is placed on new sellers who have not established a selling record yet. Read on for further details about this type of eBay payment hold.

Payment holds for new eBay sellers

New eBay sellers have not established a selling record yet and are therefore seen to be higher risk. To reduce this risk, new sellers are automatically subject to payment holds until achieving:

New sellers can check their selling history using the Seller Dashboard on My eBay.

As well as payment holds, new sellers are also subject to selling restrictions, in the form of a maximum listing limit or category limits. These selling restrictions are evaluated on a monthly basis.

When will payment happen?

Sellers who experience payment holds will be curious when the funds will actually be released. The answer is not a simple one, as managed payment sellers and non-managed payment sellers are subject to different rules.

Keep in mind that all eBay.com sellers will be transitioned to managed payments sometime in 2021.

Managed payment sellers

For managed payment sellers, the timeline for release of funds varies and is dependent on the reason for the payment hold.

  • Transaction level holds. For payment holds relating to a particular transaction (such as waiting for confirmation that the buyer has received the item), the funds may not be released for up to 30 days
  • Buyer-dispute holds. For payment holds relating to buyers reporting issues with the transaction (item not received, not as described), the funds are lifted after the claim is resolved and closed
  • Payout holds. This type of payment hold relates to the individual seller (performance issues, unusual activity, invalid payment method) and requires direct seller action before funds can be released

Non-managed payment sellers

The below table indicates the timeline non-managed payment sellers should anticipate when experiencing a payment hold.

Please note that this timeline refers to PayPal payments only and PayPal has its own system of payment holds.

Payment releasedRequirements
Within 24 hoursIf order has delivery confirmation and seller paid for shipping/printed labels through eBay
Within 24 hoursIf order has delivery confirmation, seller shipped through USPS, UPS or FedEx and the tracking number
was manually added to My eBay
7 days after latest
estimate delivery date
If tracking information was not uploaded, but the
item has been marked as shipped by seller in My eBay
21 days after the buyer paysThe tracking information was not uploaded, the
item is not marked as shipped or the estimated delivery date could not be calculated

As demonstrated by this timeline, the speed in which eBay releases payments is dependent on risk.

Items that are confirmed to have been delivered are low risk as the buyer physically has the item, so eBay will pay out quickly. Items that do not have tracking information are considered to be higher risk and so eBay holds the payment for longer.

eBay reserves the right to hold payments beyond the 21 day timeline noted in the above table.

How to avoid payment holds on eBay

Here are some simple tips for established sellers to get paid faster and prevent payment holds on eBay:

  • Ship the same day an order is confirmed
  • Offer faster shipping options
  • Achieve and maintain high seller performance levels
  • Use eBay labels for shipping
  • When not using eBay labels, always upload tracking information as soon as possible
  • Provide good customer service to buyers

Experienced sellers, do you have further advice to offer new sellers about payment holds?

Gemma
Gemma
Gemma is our all things eBay expert. Originally from the UK, she now lives in Canada and travels extensively. You can read about her travels at her blog Off Track Travel.

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