Etsy sellers furious after company withholds three quarters of takings

Etsy sellers furious after the company withholds three quarters of sales takings… leaving users scrabbling for cash

• Etsy said system is to ‘keep the marketplace safe’ and cover potential refunds

Online marketplace Etsy has faced a backlash from sellers for withholding a big chunk of their takings for 45 days.

Millions of independent businesses use the website to sell goods including ceramics, hand-made jewellery and cards.

Hundreds of small businesses have been notified by the website that 75pc of their sales will be placed in a ‘reserve system’ and unavailable for more than a month.

Etsy said this was in order to ‘keep the marketplace safe’ and cover any potential refunds.

But hundreds of affected sellers are planning to strike, boycott or team together in groups to protest the move.

Online marketplace Etsy has faced a backlash from sellers for withholding a big chunk of their takings for 45 days (file photo)

Rachel Collyer has been selling ceramics on the website since the pandemic and is worried she won’t be able to pay her bills now.

Ms Collyer told the BBC that Etsy was holding onto £899 of her money, which was ‘ruining my business’.

She said: ‘I can’t afford to buy any clay or glazes. We might have to move house because I can’t pay any bills.’

The company – which is based in Brooklyn, New York – says in its payment policy that money could be withheld due to sellers seeing a dramatic jump in sales, a seller making their first sale recently, or a shop violating Etsy policy in another way.

Most sellers will receive cash when they make a sale and a reserve system is commonly used by online marketplaces, Etsy said.

An Etsy spokesperson said that the vast majority of sellers receive their funds when they make a sale. They added that the reserve system was used by many online sellers.

Most sellers will receive cash when they make a sale and a reserve system is commonly used by online marketplaces, Etsy said (stock photo)

But tech giant Amazon only takes 3pc of takings until any disputes between sellers and customers are solved.

Etsy was originally founded in 2005 and made its debut on the NASDAQ stock exchange in New York in 2015. Its biggest shareholders include financial behemoths including BlackRock and JP Morgan.

An Etsy spokesman said its reserve system ‘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,’ she added.

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