Etsy Scrambling To Avert a Widespread Sellers' Strike

An Etsy boycott initiated by UK-based sellers over its payment system has gotten the American company's attention. From a report: Etsy addressed criticism of its policy in a blog post on Aug. 1, and promised to "substantially" decrease the amount of funds held in reserve. Vendors have complained that the platform's policy, which can freeze up to 75% of earnings in reserve for as long as 45 to 90 days, is destroying businesses and placing sellers in dire financial straits. Etsy also takes fees out of the remaining 25% of funds, stripping shops of even more earnings. [...] Vendors have begun switching their shops into "holiday mode" in protest of the payments policy and are leaving for rival sites like Shopify. The UK's Office of the Small Business Commissioner (OSBC), which has been flooded with complaints, has already contacted Etsy about its reserves system, as has the UK's Minister for Enterprise, Markets and Small Businesses.

this comments sections like an Etst Market

[Growlley]

Sparse.

VPN

[bill_mcgonigle]

I stopped buying there because it's too much effort to whitelist sites from the network-wide VPN and I don't much feel like supporting places that block VPN's in this climate.

Imagine thinking a valid login with 2fa and a valid paypal transaction for a $12 craft is risky.

No, it seems like they're probably selling user data or metrics or something and the crafters are a secondary concern.

If that's untrue they really need to clean up their act.

Re:

[Roger W Moore]

If that's untrue they really need to clean up their act.

If it's true they also need to clean up their act.

Re:VPN

[jythie]

They don't actually block VPNs, but they do IP block misbehaving sellers trying to get around being kicked off the platform, and those sellers try to get around it using VPNs.

Re:

[raynet]

Wouldn't it be easier to block their creditcards/account information, those are harder to get than random IPs.

IS this something new or..

[Fly Swatter]

are the starving artists starting to starve with all this inflation and that living paycheck to paycheck thing is becoming an actual thing for them now? Summary doesn't mention there was a policy change to cause this just people going broke that need cash now.

Re:IS this something new or..

[strech]

From Etsy's August 1st [etsy.com] post addressing the controversy (bolding mine)

We introduced payment account reserves in 2021, and to date it’s been successful in helping us to deter fraudulent activity and ensure reliable shopping experiences. However, as we’ve expanded and iterated on the program to further protect our marketplace, we recognize it may have led to disruptions in how some sellers manage their day-to-day operations.

So they started the reserves back in 2021 just for new accounts at first but they've become wider and wider since. Some information from an etsy blogger [cindylouwho2.com] and an Etsy policy statement [etsy.com] suggests a lot of it relates to shipping, but as Etsy doesn't actually integrate with shipping trackers properly (including Royal Mail in the UK) you can ship something with tracking and Etsy is too cheap to notice, but will withhold funds anyway. Also they don't properly explain why they're withholding funds, and sometimes just do it by accident; it seems like something that's been growing over the past couple years into an increasingly large problem.

Given that the withholding is 75% for up to 3 months with no explanation - more than enough to derail a business entirely - the annoyance seems pretty justifiable.

Re:

[jenningsthecat]

Also they don't properly explain why they're withholding funds...

Maybe Etsy's revenue projections are inflated by the interest they expect to collect on those reserved funds, and they don't want customers to know that.

PayPal treats many of their customers in a similar fashion, freezing accounts for no obvious reason and causing people serious financial hardship. The numerous complaints I've read about them suggest to me that they're thieving crooks - maybe Etsy decided they want in on that action.

Re:

[arglebargle_xiv]

We introduced payment account reserves

which just happen to function exactly like seigniorage but pay no attention to that

and to date itâ(TM)s been successful in helping us to

collect interest on the funds we hold for sellers while they sit there waiting to be paid, but officially it's to

deter fraudulent activity and ensure reliable shopping experiences

and protect kittens and save the environment and, um, something with orphans. Definitely not profit from seigniorage, definitely not.

Re:

[jythie]

etsy has major problems with scammers, and I suspect this is an attempt to curtail that. But just like their VPN problems, people get upset at them anyway.

Kinda funny.. people hate being scammed with fake sellers, but they also don't want companies to actually do anything about them because it might inconvenience them.

Re:

[misexistentialist]

Sounds more like Etsy doesn't want to be inconvenienced to vet sellers, though to be fair maybe they keep fees low instead

Probably a venue for CC fraud.

[laughableideasintech]

My guess is fraudsters starting using the platform to cash out stolen credit cards. It puts Etsy in a spot. They can eat it or raise prices or do this. It is a shame really.

Re:Probably a venue for CC fraud.

[Fly Swatter]

No, you create a seller account and sell junk no one would buy for the listed price except those using the stolen cards - money laundering 101. You don't even have to ship anything since the 'buyer' is in on it they can say they received it and all is good. If this is the real reason I can see why Etsy would start doing this if it became a huge problem for them.

Landfill operators

[tomatoguy]

are relieved...