Paypal Reserves of 20% on a Paypal Merchant Account

Does anyone have experience with Paypal reserves and getting them removed from your paypal account?  I just realized that on one of my paypal merchant accounts (I have two), they are withholding 20% of my money for 90 days!!!!!

Let me start by saying that I'm generally thrilled with Paypal as my merchant account vendor. With a total expense rate of 2.7% and a high level of reliability, they are better than the other vendors that I use to process credit cards.  I give them high marks for low cost, high reliability, great technology, and great service.

I've previously had one big frustration with them in that their reporting sucks.  I have several product lines being sold (I'm in the hundreds of thousands of dollars of revenues in a year with the average payment way under $100) and Paypal isn't really able to help us track by product line.  Even when we have the payments come in under different emails, they can't sort them out. It turns out the solution is to open a child account. The process was cumbersome, basically, open a new account, get it approved, get it linked to the old one, drop out all the fees, and the child account can ONLY withdraw money up to the parent account. And it's an automatic process which happens nightly.  Which would be fine except we have some refunds (we do a money-back offer) and about 4% of our customers take the refund.  Paypal does an automatic withdrawal every night but on the days that there are refunds, they try to withdraw too much and it produces all sorts of emergency warnings and failure notes.

Second big problem I just released. My account has reserves. In fact, they hold onto 20% of my funds for 90 days on a rolling basis. 


Paypal's rules say this but they don't seem to apply to my case:

[I]Reserves are funds that belong to you but have been set aside. We hold money in reserve just in case you receive payment reversals or chargebacks and your PayPal balance isn't enough to cover them. Reserves are typically applied to merchants who handle:
·         large sums of money,
·         high dollar items, or
·         items in high-risk categories[/I]