Paypal Funds Availability – How it works and how to speed it up

Answer: I received the following insight about how to speed up the 21 day hold on Paypal funds. The first thing that you may have already done is verify your Paypal account which means tying the money you get to a bank account. I had already done that for my eBay store. . Using a tracking number for mailed packages is the next quickest route to speeding up payments. I should add that Paypal says it’s up to 21 days and I have noticed that the funds are available faster than that in majority of cases.

A cardinal rule of running the finance department of your online store is the very simple concept that you want to always look for ways to increase the amount of time in paying bills and decrease the amount of time you are receiving cash.

As my eBay sales increase I want to bake in the idea that a 20 percent reduction in funds availability will allow me to increase sales 20 percent without temporary cash flow issues. 20 percent of 21 days is roughly four days so if I shave off that many days from when Paypal funds are actually available it allows greater profit in the long run.

I calculated that the .20 cents to add a tracking number will be a net benefit in cash flow plus customers can also track their own packages. I think the these three benefits will outweigh the .20 cents per package.

  1. finance charges for lines of credit and such
  2. increased sales
  3. increased customer satisfaction

Here is how Paypal explained its current policy.

“The payment hold will be removed once you’ve established your selling history on eBay and PayPal.

While you establish your selling track record, buyer payments may be delayed. These funds will generally be available once:

  • It’s been more than 90 days since your first successful sale
  • You’ve had more than 25 sales transactions with US buyers
  • You’ve had more than $250 in sales

Here are a few other reasons why your payments may be delayed:

  • You have a Below Standard rating in your Seller Dashboard.
  • You’ve started selling in a new category.
  • Your account shows unusual activity, such as a sudden increase of eBay Money Back Guarantee cases.
  • You need to add tracking information to My eBay or to an eBay Money Back Guarantee case.

Don’t worry because you do not actually have to wait for 21 days to access the pending payments on your account. We can release it earlier than 21 days if any of these 2 requirements is met.

* 3 calendar days after delivery (can be confirmed through a tracking number uploaded on PayPal)
* 7 calendar days after the latest estimated delivery date as indicated on your listing (if there is no tracking number)”

As you see from my goal, getting payments 4 calendar days faster is my goal and is the estimated time savings in Paypal’s policy.