Other Receivables

9 Months Ended

Sep. 30, 2021

As of September 30, 2021 and December 31, 2020, the balance of other receivables, net, on the consolidated balance sheets is comprised of the following:


As of	September 30, 2021		December 31, 2020
Account reactivation fees receivable, net	$	675,320	$	804,060
Receivables from merchants	786,238		599,246
Other receivables, net	$	1,461,558	$	1,403,306

Account reactivation fees receivable, net, is comprised of outstanding account reactivation fees that Sezzle reasonably expects to collect from its consumers. As of September 30, 2021 and December 31, 2020, Sezzle’s account reactivation fees receivable and related allowance for uncollectible accounts are recorded within the consolidated balance sheets as follows:


As of	September 30, 2021		December 31, 2020
Account reactivation fees receivable, gross	$	1,941,884	$	1,875,648
Less allowance for uncollectible accounts:
Balance at start of period	(1,071,588)		(483,518)
Provision	(3,433,610)		(2,347,733)
Charge-offs, net of recoveries totaling $935,163 and $71,110, respectively	3,238,634		1,759,663
Total allowance for uncollectible accounts	(1,266,564)		(1,071,588)
Account reactivation fees receivable, net	$	675,320	$	804,060

Sezzle maintains the allowance at a level necessary to absorb estimated probable losses on consumer account reactivation fee receivables. Any amounts delinquent after 90 days are charged-off with an offsetting reversal of the allowance for doubtful accounts through the provision for uncollectible accounts. Additionally, amounts identified as no longer collectible—such as when a consumer becomes deceased or bankrupt—are charged off immediately. Payments recovered after the 90 day charge-off period are recognized as a reduction to the allowance for uncollectible accounts in the period the receivable is recovered. Sezzle has not changed the methodology for estimating its allowance for uncollectible accounts during the nine months ended September 30, 2021.

Receivables from merchants primarily represent merchant fees charged, but not yet paid, to the Company. Additionally, during the three months ended September 30, 2021 and 2020, the Company recorded direct write-downs of $539,242 and $110,392, respectively, for uncollectible receivables from merchants, which is included in the provision for uncollectible other receivables. Such write-downs for the nine months ended September 30, 2021 and 2020 were $994,425 and $274,705, respectively.