20 July 2023 , 07:07
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Single mum Sarah Biddle makes a modest living selling homemade hair extensions on the craft shopping site Etsy.
Her Etsy shop has an established track record of almost 4,000 sales and excellent reviews.
But without warning, Etsy placed her account on reserve, meaning it withholds payment for up to 45 days.
First the amount withheld was £29.45, then when Sarah made more sales the amount held back was increased to £87.13, and then after further sales to £197.57.
“Etsy won’t pay out unless you meet the minimum reserve, which goes up with every sale, so it is impossible to get over the reserve amount to get paid,” said Sarah, from Reading.
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“I now have no money to buy new stock so I’m not sure how to keep my small business going.”
She complained and received an automated response stating: “Etsy Support isn’t able to give you the specific reason a reserve was placed on your account.”
It did list general reasons for this action, such as orders not being dispatched on time or missing tracking information or an increase in refunds.
“None of these reasons are applicable to me,” said Sarah.
She’s not alone. Many other sellers are complaining that Etsy puts 75% of payments from buyers into reserve, so that after the platform has taken its fees, the seller gets barely 10% of the sale price until the rest is belatedly released.
Dean Moss, from Leicester, creates handmade furniture with five-star reviews but Etsy is keeping his funds for 45 days or until he provides postal tracking numbers.
“As all items are oversized there isn’t a tracking number – I can’t post tables, I deliver them,” he said.
“They will not give a reason for the reserve and there is no way to escalate a complaint.
"We are not sure that our business can survive now.”
Too big to post: a bespoke parquet table by Dean MossTim Wolfe, from London, makes storage trunks from reclaimed wood.
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He said: “My latest sale was £220 plus £40 shipping and Etsy paid out just £31.”
Bookbinder Susan ThompsonDesigner recycled leather bookbinder Susan Thompson, from Brighton, doesn’t want to use expensive tracking to deliver items.
“The tracked option for Royal Mail costs £8 to £12, which is too much to add to products costing only £20 to £40,” she said.
“I’ve been obliged to use a tracking service that costs more because Etsy doesn’t list the more affordable Royal Mail service.
“Etsy is holding over £1,000 of my well-earned money on reserve. I’ve never had any issues until this was imposed without warning and no reason given.”
Painted glass jewellery on Ruth Morcombe's Etsy shopRuth Morcambe, from Corby, Northants, has great reviews for her painted sea glass jewellery but still found her shop put on reserve for 90 days, with funds starting to be released after 45.
“I’m really struggling as this is my main source of income,” she said.
“I have contacted Etsy support but only received a pasted reply listing their policies.
“They expect such high standards from us sellers but their customer service is pretty dire, you can't speak to a real person.”
Furniture maker Samantha Vass, from Leighton Buzzard, Beds, says that Etsy has around £6,000 of her payments in reserve.
“They say they release money when you ship an item tracked but every evening we have to argue with customer service to get money released,” she said.
“It’s exhausting and we are trying to get other platforms working so we can leave Etsy altogether.
“We have had to use credit cards and have suppliers extend credit to us just to keep going. The stress is breaking us.”
Another furniture seller, Maria Williams, asked: “Would I get away with sending a buyer one drawer of a chest of drawers and telling them they can have the rest in 45-90 days if there's no issues?”
Angela Hunter and Colin Maclennan sell whisky barrels and garden planters.
“This is the second year in a row that Etsy have put restrictions on the account,” said Angela.
“Last year they had over £20,000 at the 90 day mark and this year so far they have almost £7,000.
“We ship whisky barrels so our goods are outwith their tracked delivery regulations as they are too bulky.
“We also supply barrels wholesale to people who resell on Etsy and they have now been put on reserve too so can't pay us either.”
After the Mirror contacted Etsy, a number of sellers have had their reserves lifted.
Among them is Susan Thompson, who said: "There is still a good case for publishing your article: it may help to promote more action by Etsy to act transparently and fairly and to avoid fear and confusion and further damage to the livelihoods of small companies."
Etsy told me that it would not discuss individual cases, but said that only a “very small” proportion of sellers have funds kept in reserve.
“Etsy has long provided sellers with a generous payment schedule," said a spokesperson.
"The vast majority of sellers receive their funds when they make a sale rather than having to wait until the buyer receives the item, like they might with other selling platforms.
"In some cases, we will delay a portion of funds from a sale until we can confirm that the order has shipped.
"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.
"As always, we will continue to iterate and improve upon our programs, including payment reserves, in order to support our sellers.”
According to its latest quarterly results, New York-based Etsy made a gross profit of $445million – about £340million – in the three months to March31.
Chief executive Josh Silverman said he wanted it to be “the preferred platform for our sellers because we help them grow effectively and efficiently”.
A lot of sellers would dispute that. Etsy has around six million active sellers. It says that the percentage of those put on reserve is in single digits so, let's stay 5%. That makes 300,000 unhappy sellers and, as some have pointed out, a significant amount of money being kept by Etsy and presumably earning it interest.