Overview

The TikTok Shop Reserve Policy explains how reserve amounts, reserve periods, and reserve funds are calculated to help mitigate risks associated with refunds, disputes, and fees that sellers owe.
All sellers who offer products for sale through TikTok Shop using Ship by TikTok, Ship by Seller, and Fulfilled by TikTok shipping types are subjected to this policy unless an exception is applied prior to the seller onboarding process.
Important: This policy only applies to orders, transactions, products, and shipments specifically in the US.
This policy is not exhaustive, nor intended for legal advice. Sellers must seek independent legal advice if they have questions about the laws and regulations concerning their products.
This policy is updated periodically. Sellers must check this page regularly to ensure compliance with our current policy.

Definitions

• The reserve percentage is the percentage of the settlement amount of each order ID, held in reserve by TikTok Shop for a predetermined period of time.
• The settlement amount for a given period is the total revenue, minus platform fees and returns (including any warranty reimbursement), if applicable.
• The reserve amount is the amount of money corresponding to the reserve percentage applied on the settlement amount for each order ID.
• The reserve period is the predetermined period of time for which the reserve amount is held by TikTok Shop. At the end of the reserve period, any unused reserve amounts are made eligible to be disbursed back to the sellers.
• Reserve levels represent the reserve percentage and the corresponding reserve period.
• Reserve criteria are a set of rules that determine the reserve level of each seller.

Transaction-Level Rolling Reserve

Reserve Calculation and Holding Period

• TikTok Shop will calculate and hold a reserve amount from the settlement amount of each new transaction based on the set percentage.
• The reserve will be held on a rolling basis for a defined reserve period from the delivery date calculated in calendar days.
• If unused, reserve funds will be made eligible to be disbursed back to the sellers at the end of the reserve period.

Reserve Levels

TikTok Shop operates using four reserve levels: Level 0, Level 1, Level 2, and Level 3.

Level	Reserve Percentage(applies to settlement amount)	Reserve Period(from delivery date)	Reserve Criteria (during t-45 to t-15 days, where t is the day of evaluation)
Level 0	70%	30 calendar days	This level can be activated at any point in time if any of the following conditions are met: When the total outstanding dispute amount equals 85% of the reserve funds available. If there is a high risk associated with a seller during the periodic risk assessment conducted by TikTok Shop
Level 1	10%	30 calendar days	This level can be activated if any of the following conditions are met during the regular evaluation: Sellers are on probation. Late Dispatch Rate (or LDR) is more than 8%. Seller Fault Cancellation Rate (or SFCR) is more than 5%.
Level 2	5%	30 calendar days	This level can be activated if any of the following conditions are met during the regular evaluation: Seller Fault Cancellation Rate (or SFCR) is more than 2.5% but less than or equal to 5%. Late Dispatch Rate (or LDR) is more than 4% but less than or equal to 8%.
Level 3	0%	0 calendar days	All of the following conditions must be met during the regular evaluation: Sellers must be out of probation at the time of evaluation. Seller Fault Cancellation Rate must be less than or equal to 2.5%. Late Dispatch Rate (or LDR) must be less than or equal to 4%.

• New sellers who are onboarded or on probation will be set to Level 1. Sellers must refer to the New Seller Probation Period article for more information.
• After the probation period, the appropriate reserve level will be determined based on the seller's performance.
• A seller could be moved to Level 0 at any point in time outside of the normal evaluation period. Level 0 will only be applied if any of the following conditions are met:
  • If there is a high risk associated with a seller during the periodic risk assessment conducted by TikTok Shop.
  • When the total outstanding dispute amount equals 85% of the reserve funds available.

Reserve Evaluation

• Reserve level evaluations are conducted at the beginning of every month based on the reserve criteria.
• Once the reserve level has been determined, the corresponding reserve percentage will be applied on all future settlements for the entire duration of the month until the next evaluation day.
• If unexpected circumstances occur during the course of 30 calendar days, the reserve level may be subject to review and adjustment.

Reserve Fund Utilization

• Reserve funds are primarily intended to cover any monetary loss to TikTok Shop if sellers are unable to cover any refunds, disputes, and fees that they owe.
• Reserve funds will be used in the order it was withheld, starting with the oldest fund.

Disbursement of Unused Reserves

• All unused reserves will be disbursed back to sellers at the end of the reserve period, if the net reserve is more than $0.
• In case of permanent shop closure or if a seller voluntarily closes their shop, the shop balance may be withheld, as described in the Withholding Balance section of our TikTok Shop Seller Performance Evaluation Policy.

Visibility and Transparency

• Seller Center will display the reserve amount withheld from each transaction.
• Sellers will be notified of any changes in reserve levels through Seller Center.

Enforcement Actions

If sellers fail to adhere to this policy, we reserve the right to take enforcement actions as set out in our Seller Performance Evaluation Policy and Seller Terms of Service.