Merchant Reserves Recovery Lawyer

Reserves recovery is one of the most litigated issues in the realm of electronic payment processing. When a business is considered high risk, it’s common for payment processors or banks to hold a portion of the business’s earnings. However, recovering those reserves is not always simple. Don’t hesitate to consult a skilled merchant reserves recovery lawyer if your funds are being unfairly withheld.  If your funds are being held without justification, our team can help you navigate the legal and contractual complexities involved in securing their release. Learn how we handle domestic and international reserves recovery cases within electronic payment processing to protect merchants’ financial rights.

What to Know About Rome LLP

At Rome LLP, our experienced and skilled legal team is focused on assisting business owners on a national and international level. Our attorneys operate according to results-driven and innovative strategies. With extensive trial experience, we can address your legal concerns, no matter the circumstances. 

When to Hire a Merchant Reserves Recovery Lawyer

According to the U.S. Chamber of Commerce, over 33 million small businesses employed over 61 million people during 2023. Unfortunately, 20 percent of small businesses fail within their first year, and more than 45 percent close down in the first five years of operation. That’s why it is paramount that businesses avoid getting taken advantage of and have access to the resources they need to thrive.

In credit card processing for merchant accounts, a reserve is a temporary hold on a portion of a business’s funds before they are deposited into their bank account. The purpose of these reserves is to have funds available to protect both the merchant and the payment processor if an unplanned risk event occurs, such as a chargeback. 

This form of insurance is often put in place for high-risk merchants, including new businesses or those in risky industries. It’s important to understand terms related to reserves when entering into any business contract or agreement. Reserves are meant to be temporary; they are often returned once certain terms are met. 

When a merchant is subject to improper retention of their reserves, it’s recommended to contact a business attorney who can recover the funds. A merchant reserves recovery attorney is a legal professional who assists businesses in retrieving funds that have been improperly withheld by their payment processor. These disputes often arise from chargebacks, rolling reserves, or sudden account freezes—issues that can severely impact a company’s cash flow. To understand how such conflicts typically develop and how to address them effectively, explore our insights on common payment processing disputes that affect merchants across industries.

Are Reserves Recovery Cases Handled in Court?

When dealing with reserves recovery, proceedings are often resolved out of court. Your attorney will most likely begin by trying to enforce a contract or other agreement between you and your business’s payment processor. If a settlement isn’t reached in a timely manner and negotiations don’t yield a successful result, the case may then go to court. 

Under merchant reserves recovery laws, certain circumstances may also require the case to go to court right away, such as allegations of unlawful activity. If a significant amount of money is being withheld, this may also warrant immediate court involvement. Reserves recovery falls under civil court jurisdiction, so, depending on the amount in question, the case may be handled in small claims court or district civil court.

The specific courthouse depends on where you are located. For example, reserves recovery court cases near Los Angeles are most likely to be processed at the Stanley Mosk Courthouse. This is located at 111 N. Hill St., Los Angeles, CA 90012. If the case involves parties in different states or violations of federal law, it falls under federal jurisdiction. The federal district court in Los Angeles is located at 350 W. 1st Street, Los Angeles, CA 90012.

Choose Rome LLP for Your Reserves Recovery Case

If you’re looking to hire a merchant reserves recovery lawyer, look no further than the skilled and qualified attorneys at Rome LLP. Our legal team has extensive experience in handling a wide variety of merchant reserves recovery cases, working on behalf of businesses of different sizes and types. We also represent clients in Stripe payment processing litigation, addressing disputes over withheld funds, frozen accounts, and contract violations involving one of the industry’s largest processors.

FAQs

What Is the Purpose of Merchant Reserves?

The purpose of merchant reserves is to provide protection to businesses and their bank or other payment processor from certain risks and unplanned events, such as when consumers request a refund. A portion of a business’s money is withheld temporarily and returned after specific requirements are met. Reserves are typically used for high-risk merchants, including new businesses.

How Much Does a Merchant Reserves Recovery Lawyer Cost?

How much your merchant reserves recovery lawyer may cost in legal fees can vary, depending on the law firm and the details of your case. Lawyers may charge a percentage of the recovered funds, an hourly rate, or a flat fee. In addition to your attorney’s payment structure, lawyer fees are influenced by how complex your unique case is. 

How Long Will It Take to Recover My Reserves?

It’s difficult to estimate beforehand how long it may take to recover your reserves, whether partially or completely, without assessing the circumstances of your situation. Reserves are typically held for a number of months, but the exact timeline varies, depending on the contract and the perceived risk. Some cases may take less time if you can negotiate an early recovery of the reserves, while other cases may take longer if they are highly contested. 

What Are the Different Types of Reserves?

There are several types of reserves, and it’s important to know the type you have so you can make sure your business isn’t being taken advantage of. Rolling reserves occur when a percentage of a merchant’s daily electronic sales over a specific period is withheld. Upfront reserves are a specified amount that is required to be deposited upfront. Capped reserves entail a maximum limit that can be held by the payment processor. 

Why Do I Need a Reserves Recovery Attorney?

There are numerous reasons why you can benefit from having a merchant reserves recovery attorney. For businesses of all sizes, but especially small businesses, the funds held in reserves can be incredibly useful. That’s why it’s important that your temporary reserves are returned to you, and working with a lawyer can make this process easier. 

A Reserves Recovery Lawyer for Merchants

Rome LLP is a boutique law firm based in Los Angeles that serves clients across the country and the world. We can address your business law concerns and make sure your rights are protected. Contact us today to schedule a consultation with a skilled merchant reserves recovery lawyer.