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Etsy Sellers Deal with Direct Checkout PayPal Bug

Etsy is experiencing a bug that is presumably impacting a small number of sellers, but because of major policy changes – compounded by the way it’s communicating with sellers in a thread about the glitch – a number of sellers are expressing concern.

“The latest problem at Etsy involves the integration of Direct Checkout and PayPal,” a reader told EcommerceBytes. “It appears that even if a seller chose to keep Direct Checkout and PayPal and then decides to turn off DC, Etsy disables PayPal payments.”

Etsy acknowledged a known bug that makes it seem like standalone PayPal (in other words, the seller’s own PayPal account) is gone when a seller turns off Direct Checkout – but sellers should be receiving payments into their own PayPal account, and the problem is expected to be resolved by early next week.

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But the reader said that for those sellers who had turned off Direct Checkout and believed their PayPal account was not working and then turned Direct Checkout back on, they would see the integrated PayPal account and would not be able to revert back to their own PayPal account.

It sounds confusing because Etsy made a major policy change recently as it pushes sellers to accept Etsy’s own PayPal account in Direct Checkout. Sellers who accepted Direct Checkout and PayPal had until December 31, 2015 to switch back to standalone PayPal if they had not opted out of Etsy’s integrated PayPal account.

In this thread on Etsy, sellers were unclear whether opting out of Direct Checkout would mean that they would lose the ability to keep their standalone PayPal account even if they had opted out of Etsy’s integrated PayPal account by the required deadline. While that’s not the case, Etsy does not seem to have answered that particular question in the thread.

The policy change itself caught some members by surprise, such as a seller who wrote on this thread, “I read the emails. I didn’t realize that what I was clicking was changing my account for good. I was taken off guard and didn’t realize that was what I was clicking. I would have NEVER accepted it as I purchase all of my supplies through PayPal. Now that I’m not going to be getting any deposits, I’m totally screwed.”

There’s a big difference between offering one’s own PayPal account (with or without Direct Checkout) versus offering the Etsy-integrated PayPal account through Direct Checkout. As the seller above referenced, being able to use PayPal funds earned from sales to make online purchases, such as supplies on Etsy, is easier. And PayPal payments come into a seller’s account quickly, whereas Etsy makes bulk Direct Checkout disbursements every Monday.

Despite many sellers’ preferences for offering Direct Checkout with their own PayPal account, the policy is now set in stone – new shops who wish to do so cannot, even if they’re not a new seller.

Some Etsy sellers say they are now fearful of making any changes to their accounts with regard to Direct Checkout and PayPal lest they inadvertently lose the ability to accept payments into their standalone PayPal accounts.

While the bug is likely to be fixed, the rather heavy-handed policy is likely to remain in place. You can read sellers’ initial response to the policy change on this September EcommerceBytes Blog post.

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Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. Send news tips to ina@ecommercebytes.com.


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