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Etsy Apologizes for Taking Money from Sellers in Major Error

Etsy Apologizes for Taking Money from Sellers in Major Error

Etsy posted an apology for what it called a bill payment error after some sellers reported the company took large sums of money from their credit cards and bank accounts on Friday afternoon.

EcommerceBytes reported the problem on the AuctionBytes Blog on Friday, which we continue to update. Etsy continues to say the problem affected “a small group of sellers.”

Sellers have expressed concerns about the ramifications of having money withdrawn from bank accounts or charged to credit cards – including cash flow issues and potential tax complications. Some sellers reported hundreds of dollars had been withdrawn or charged, others reported thousands. The Presidents Day holiday on Monday is adding to sellers’ woes.

In addition, as Etsy worked to fix the problem, it created another problem. Some sellers who were supposed to receive disbursements on Friday didn’t get them – Etsy said today it will send them on Tuesday, February 19.

In addition to issuing an apology to sellers, Etsy said it created a Payments task force to address concerns or troubles arising as a result of the error. If that sounds familiar, it’s because Etsy created a Payments task force in 2016 following a major payments disruption.

Etsy said it would “refund any undue fees associated with this incorrect charge and change in deposit schedule.”

Here’s today’s latest update from Etsy:

An update on recent issues affecting payment accounts
“On Friday, February 15, a bill payment error affected a small group of sellers which resulted in some cards being incorrectly charged. Sellers who were affected have been notified by email, or by Etsy Conversations, and the issue that caused this has since been resolved.

“As part of fixing this issue, all incorrectly charged cards have been refunded. It may take several business days for the refunded amounts to clear and settle in card accounts. Also related to fixing the root problem, some sellers saw their scheduled deposit of funds returned to Etsy on Friday, February 15, and those deposits will now be sent on Tuesday, February 19.

“For affected sellers, we are very sorry for the trouble or concern this may have caused. Our first priority has been to correct the issue. This was not a fraud issue, but instead an error related to a site change which affects a small group of sellers and is unrelated to buyers’ purchases.

“This is an issue we do not take lightly. We’ve assembled a Payments task force, including senior executives across Etsy, to address any concerns or troubles resulting from this error. We will refund any undue fees associated with this incorrect charge and change in deposit schedule. We don’t expect this error to impact additional sellers going forward.”

It’s interesting that Etsy calls this issue an “error” as opposed to a “bug” or a “glitch.”

Stay up to date by following this AuctionBytes Blog post.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.

9 thoughts on “Etsy Apologizes for Taking Money from Sellers in Major Error”

  1. Upon the creation of a Civilized, ETHICAL, with Domestic Customer Service Reps, wholey American, eCommerce venue,
    I will be leaving Etsy IMMEDIATELY.

  2. Yes, it is extremely annoying that mistakes involving sellers’ money are made, but it sounds as if this is a legitimate error and that etsy notified those affected and took corrective action immediately. What could they have done that they didn’t do?

    Sellers scream to high heaven about buyers expecting perfection of us, but many of us are worse than our buyers when it comes to expecting perfection of others, it seems to me.

    Having been in retail before ecommerce when Visa would happily pluck any amount from your account and give you 3 days to provide absolute proof that they should return it, I’m delighted with the with the amount of transparency and responsibility etsy showed in this case. I’m sure some will disagree with me, but this is a good reason to link accounts to a bank account with a cushion in it as well as to a credit card with an ample credit limit.

  3. I’m also happy I closed my Etsy shop last year. It hurt my handcrafted jewelry sales but they eventually picked up again when I moved them all back to eBay and elsewhere. This “glitch” of Etsy’s should have come with more than an apology. I’m sure there will be a lawsuit or two, as messing with people’s money & livelihood is a a serious, devastating thing.

  4. Holy. Moley. Is etsy just run by art department majors, because my accounting classmates wee mediocere but I cannot imagine any of them being THIS incompetant with numbers.

  5. I just closed my Etsy account due to this glitch (I wrote the reason on the closing page, as if anyone at Etsy would ever read it)… I am fortunate that the charges did not happen to my account but i no longer want to risk anything with Etsy. This is not the first time they have had a major glitch that has cost many sellers. I have never seen such a poorly run company (they make Ebay look like a gold standard of competence).

  6. Will Etsy be paying for overdraft charges for those sellers who had their bank accounts drained?

  7. What about the 5%s that weren’t 5%s that Etsy charged non-US sellers? No sign of Etsy paying it all back yet. It’s outrageous! I don’t know how Silverman sleeps at night when it’s one financial debacle after another.

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