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Etsy Refunds Sellers after Third-Party App Misstep

Etsy said it refunded sellers who were negatively impacted by a glitch caused by a third-party app called Stitch Labs. The third-party vendor inadvertently introduced a bug into the code of its app that integrates with Etsy at 2 am on Thursday morning when it updated the program.

Etsy spokesperson Sara Cohen told EcommerceBytes that Etsy and Stitch Labs worked together to identify the problem, explaining that the third-party app from Stitch Labs had erroneously renewed item listing that were Inactive or Sold Out. “This was caused by a bug on Stitch Labs’ side, and was not related to Etsy’s Listings Manager or other Etsy features,” she said.

Etsy notified sellers early Thursday morning that it was looking into the problem through a post on the Etsy boards. “Thank you for looking into this,” wrote one seller. “Very shocking and upsetting to see this. I hope charged fees will be reversed.”

Another seller responded by noting her Etsy bill had nearly doubled in just two hours.

Slightly confusing matters when attempting to identify the source of the bug was that it didn’t simply impact sellers who regularly use Stitch Labs – it also impacted sellers who had at any point signed up for a free trial.

Etsy temporarily removed Stitch Labs from the Apps Gallery and temporarily disabled its ability to access the Etsy API in order to prevent any additional shops from being affected while the companies worked through the issue. Etsy has since reinstated Stitch Labs.

“Less than 0.1% of active Etsy sellers were affected,” Cohen said. Etsy has identified, deactivated and credited the listings that were impacted and communicated with those sellers about the steps the company had taken, she added.

Stitch Labs co-founder Jake Gasaway said the bug was caused by a manual human error and was not something that was caused by its automated connection with Etsy. “As soon as we discovered the bug, we proactively worked with Etsy to quickly fix it and communicate to those affected. All issues have since been resolved, and we have put in safeguards to make sure this will not happen again,” he said.

Stitch Labs was founded in 2011 as an inventory- and business-management tool for those who design, make, and sell products online and at craft fairs and trunk shows.

Etsy’s Cohen said, “We’ll be reviewing how all third-party apps are authenticated and evaluating if any changes need to be made to the program.”

Edited 2/15/15: Stitch Labs said the bug did not impact users who had taken a product tour.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.