Refund Reserve Calculator
Size it on the peak, not the average.
Reserve to hold
$55,736
$25,334 in a typical month
Refunds arrive after the revenue has been spent, which is why the reserve has to be sized on the peak rather than the average. January refunds against December revenue is where undercapitalised retailers fail.
How the Refund Reserve Calculator works
Refunds arrive after the revenue has been spent, so the reserve has to be sized on the peak rather than the average. January refunds against December revenue is where undercapitalised retailers fail.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How large should a refund reserve be?
Enough to cover refunds in flight at peak, plus any rolling reserve the processor holds. Sizing it on the average month leaves you short exactly when the pressure is highest.
What is a processor rolling reserve?
A percentage of your revenue the payment processor withholds against future refunds and chargebacks, released after a period. It is common for newer or higher-risk merchants.
Why does seasonality matter so much?
Because refunds lag sales by weeks. A December peak generates January refunds against January's lower revenue, and the gap has to be funded from cash you may already have committed.
Should the reserve be a separate account?
Practically, yes. Money in the main account gets spent, and the discipline of a separate balance is what makes the reserve exist when it is needed.