Etsy Sellers Organize Boycott Over Marketplace’s Withholding of Funds


Hundreds of Etsy sellers are reportedly organizing a boycott after the online marketplace withheld merchants’ money.

This effort comes after the firm told hundreds of sellers that it is putting a hold of 75% of their earnings for 45 days, saying it is withholding the money for potential refunds, the BBC reported Monday (July 31). The firm didn’t tell the sellers exactly why they were targeted.

In addition to facing a boycott, Etsy has met with government officials in the United Kingdom about this issue, according to the report.

Reached for comment by PYMNTS, an Etsy spokesperson said in an email that the “vast majority” of sellers receive their funds when they make a sale, with less than 2% of sellers having a reserve on their account.

“In some cases, we will delay a portion of funds from a sale until we can confirm that the order has shipped,” the spokesperson said. “This enables us to continue paying sellers in a timely manner while taking the steps necessary to help keep our marketplace safe and protect our customers when there are unexpected issues with their order.”

The spokesperson added that for more than 70% of the sellers whose funds are placed in reserve, the amount on hold totals less than $50. In addition, the reserves are released when the seller adds valid tracking to the order to confirm it is in transit, and the funds held in reserve are generally made available to sellers within two weeks of the order date.

Etsy’s policies say that money can be put on hold when sellers make their first sale, see a sudden jump in sales or display “risk factors,” according to the BBC report.

Those affected by the freezing of payments include sellers in the U.K., the European Union and the United States, the report said.

One seller was given hours’ notice that the funds were being withheld, per the report. Some others experienced two consecutive 45-day reserve periods, and another was told by Etsy that the firm is not accepting complaints about the issue.

Etsy faced a strike by sellers in the spring of 2022 when sellers protested a 30% transaction fee increase the company made at the time.

The increase raised Etsy’s cut of sales to 6.5%, and small businesses selling on the platform said the increase made it harder for them to make a living at a time when other business and household expenses were already rising.

Etsy Chief Operating Officer Raina Moskowitz told PYMNTS at the time: “The new fee structure will enable us to increase our investments in areas outlined in the petition, including marketing, customer support and removing listings [such as mass-produced merchandise] that don’t meet our policies.”

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