Tabs Pay: Reserves and Negative Balance Handling

A payout is a daily transfer from your Tabs Pay balance account to your bank account that represents the net sum of all customer payments that settled on that day.

Two things can stop a Tabs Pay payout: your balance going below zero, and an unmet reserve balance. This article explains both.

When your balance goes negative

Your balance account holds the money from your Tabs Pay customer payments until Tabs pays it out. Refunds, chargebacks and fees come out of that same balance. On a day when those outgoings add up to more than your sales, the balance drops below zero.

That is usually a question of timing. A quiet week followed by one large chargeback will do it, as will a refund on an invoice that was paid a month ago. A merchant with steady daily volume rarely goes negative, because each day's payments absorb that day's refunds.

Two things happen while your balance is below zero.

Payouts stop. Payments keep working and your customers can still pay you, but money doesn't move to your bank since there is no positive balance to transfer.

Tabs recovers the shortfall for your account. Tabs debits your connected bank account to bring the balance back to zero. That's the same account that normally receives your payouts, and the debit is covered by the ACH authorization you signed when you set up payments with Tabs. This debited amount is not kept by Tabs - it stays in your balance account to maintain a $0 minimum.

What to do about a negative balance

Nothing is required of you. The recovery runs on its own. What helps is understanding what caused it.

Open your transactions in Tabs and look at the refunds, chargebacks and fees from the period in question. The shortfall is the difference between those and your sales over the same period. If a chargeback caused it and you would like to contest that chargeback, navigate to the "Disputes" section of the app.

Reserves

A reserve is an amount held back from your payouts and kept as a buffer against future refunds and chargebacks. It isn't a penalty, and it isn't triggered by something going wrong.

Most accounts don't have one. Reserves are set case by case by Tabs' risk and finance teams and sized as a percentage of the payment volume you process, so a reserve scales with your business rather than being a fixed figure. Tabs will reach out to you if a reserve is required for your account.

Three things follow from that, and each one comes up regularly.

Payouts wait while a reserve is being built. Until the reserve is met, payouts don't land in your bank account. For example, if a reserve amount is $1000, then payouts will resume once that $1000 has been reached in customer payments, with the reserve still being held in your balance account.

The reserve is there to be used. When refunds or chargebacks draw it down, that's the reserve doing its job rather than a failure state. It starts building again once it has been drawn down. If your balance account goes negative, Tabs debit your bank account to bring it back to the reserve level.

The percentage is specific to your account. It's set and reviewed by Tabs rather than calculated from a published formula using your average daily payment volume.

If you have questions about your reserve, contact payments-ops@tabs.com. 

Questions

If your payouts have stopped and you're not sure why, contact Tabs with your account name and the date you last received a payout.