PayPal reserves are funds held in your PayPal account to cover potential losses from payment reversals, such as chargebacks and claims filed by your buyers. The reserved amount is kept temporarily unavailable for use or withdrawal. The terms of your reserve will be included in the email you receive informing you that one has been implemented. To see your reserve balance, go to your Account Summary and view the “on hold” section under “PayPal balance.”
However, this reserve is not normally drawn down. When chargebacks or disputes are received, they are deducted from the merchant’s available balance and not the reserve. The reserve is used only if the merchant goes out of business or stops processing payments through PayPal.