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Etsy Bug Results in Late Payments to Sellers

Etsy sellers spent an anxious weekend wondering if payments due in their bank accounts on Friday would appear on Monday. The problem follows a similar incidentthat occurred on Cyber Monday (November 30th) that impacted international sellers and was fixed that Wednesday.

Both problems affected transactions processed through Etsy Direct Checkout in which Etsy processes payments from buyers, then disburses the funds to sellers’ accounts, however, the company said the problems were not related.

On Friday, sellers noticed they weren’t receiving emails confirming transfers, and after pleas for information on discussion boards, they had to wait until Saturday afternoon before hearing from a moderator that Etsy was aware of the issue, but that nothing could be done until Monday.

In the November 30th incident, Etsy blamed the increased sales volumes over the holiday weekend, although why the US holiday impacted international sellers isn’t clear.

On Saturday evening, Etsy’s Bill Massie posted an update to a discussion board thread, and on a Sunday evening post, he included a detailed account of what went wrong, why, and how Etsy proposed to take action to alert it to such problems in the future.

Here is a recap of some key points Massie revealed in his post:

Who was impacted? “US sellers who requested a disbursal between Thursday at 3:30 PM EST and Friday at 3:30 PM EST. This was about 12,500 sellers out of our 1.5 million seller community. Our automatic Monday US disbursals were not affected by this.”

What went wrong? A little before 3:30 PM EST, there was a configuration issue with Etsy’s servers that temporarily removed an important file and impacted the servers that handle payments processing. It was cleared up shortly after 3:30 PM EST.

“Unfortunately, the process that kicks off the US disbursal job happens at exactly 3:30 PM, and when it couldn’t load the missing file it essentially crashed without doing anything. This prevented the US disbursal process from starting at all which prevented the ACH files from being sent to our bank on Friday.”

Why didn’t Etsy know about the problem as soon as it occurred? “All the monitoring is designed to detect if the process fails after it starts. If the process never starts, our monitoring doesn’t currently know that it should have started.”

Massie said that as many of sellers mentioned in the thread, Etsy should have detected this sooner. “We will be adding additional monitoring to this process to ensure that we can detect this kind of failure in the future.”

He also apologized, ending his Sunday evening post with, “Finally, I want to emphasize that I appreciate how serious this is. Even though this issue only directly affected a fraction of our sellers I understand your concern and frustration whether you were affected or not. I assure you that this issue is receiving the highest possible attention here at Etsy.”

A seller wrote on the thread on Sunday evening that she was told Etsy would refund sellers who were impacted by the delayed disbursements on Friday the listing fees, transaction fees and Direct Checkout fees associated with sales between their last deposit and the deposit originally scheduled on Friday, December 4; and that Etsy would reimburse sellers for any late fees or overdraft fees from bank accounts charged as a result of the late disbursement.

Etsy spokesperson Nikki Summer provided us with a letter the company began sending sellers who were affected via email on Sunday evening confirming the refunds and reimbursements. See the EcommerceBytes Blog for the full text of the email.

Comment on the EcommerceBytes Blog.

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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/.