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An Update on the Etsy Billing Disaster

An Update on the Etsy Billing Disaster

Late last week we reported on the Etsy billing debacle in which it incorrectly withdrew funds from some sellers’ bank accounts and charged some sellers’ credit cards, despite the sellers not owing fees. The problem occurred on Friday, with some sellers reporting hundreds of dollars had been withdrawn or charged, others reporting thousands of dollars had been removed from their accounts.

In trying to fix the problem, Etsy created another problem: some sellers who were supposed to receive disbursements on Friday didn’t get them – Etsy said on Saturday it would send them on Tuesday, with the Monday Federal holiday causing delays as banks were closed.

In response to our inquiry for an update yesterday, February 21, an Etsy spokesperson told EcommerceBytes, “We plan to follow up with affected sellers within the next 24 hours to provide them with more information, and remind them that they can contact support if they still have questions.”

Sellers continue to post on an Etsy discussion board thread started on Friday, which one week later is 119 pages. It’s difficult to determine how many sellers who were impacted have received funds back in their accounts (or have received their disbursements).

The only response from Etsy that is visible on the first page of that thread is from Saturday. The same day, Etsy marked the thread “solved,” which many posters found troubling as reports of problems continued to pour in. We personally find the inability to quickly scan all of Etsy’s responses on the first page of the long thread to be extremely frustrating, something that is new since Etsy moved to a new platform to host its discussion boards recently.

To see how complex this has become, check out this post from a seller from February 21st in the Bugs section. What does come through loud and clear is the financial hardship and uncertainty the seller describes. An Etsy moderator replied and posted, “I’ve got a member of our Support team looking into this and they’ll be reaching out to you shortly for more information.”

Etsy has said it communicated with sellers who were impacted by the error, calling it a small percent of active sellers, and said it would reimburse associated fees, such as overdraft fees.

Nevertheless, there are many sellers who expressed a lack of confidence that Etsy is doing right by its sellers and seem to find it difficult to trust the site after hearing reports of hardship resulting from the problem that Etsy called a “bill payment error.”

Cash flow issues are very real for small businesses, and they can be particularly devastating for the type of artisan and vintage sellers found on Etsy.

On Monday, Etsy CEO Josh Silverman will face Wall Street analysts who, like sellers, are no doubt wondering how the problem occurred and what the company is doing to stop it from happening again.

You can leave a comment on the AuctionBytes blog post published on February 15.

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 “An Update on the Etsy Billing Disaster”

  1. Well they took over 3 grand from me. I cancell’ed my credit card and the credit card company stopped payment as it was a fraud and issued me a new number. That stopped all the problems cause now its the banks and Etsys problem. In the meantime ETSYS NOR ANY OF THEIR SO CALLED PEOPLE HAVE CONTACTED ME OR MY BACK.

    Good thing the card was cancelled. Etsy is becoming Greedbays twin. It will be weeks before this mess is fixed. Lots of luck people.

  2. Etsy’s seemingly laissez-faire response to this situation is stunning!

    Etsy claims that all funds have been returned, is it true?:


    Etsy has agreed to pay fees imposed on sellers who have been effected…overdraft, over-limit, etc. But, one problem that will be more difficult/impossible to fix is the affect it may have on peoples’ credit. How will Etsy fix that?

    @who really cares: It is a darned good thing that you were so proactive!

    1. “Etsy claims that all funds have been returned, is it true?” No, it is not true! Many of us who were promised refunds in December are still waiting and others have had large chunks taken from their accounts without authorisation. Something is rotten in the state of Denmark.

  3. Of coarse we NEED the money.
    We spend every waking moment making product for people who appreciate us.
    And when we’re too old, Etsy and the rest are going away.
    WE are the engine of prosperity.
    Show us respect by NOT screwing up our meager deposits.
    And we are NOT looking forward to “upgrading” computers.
    I’m SICK of computers.
    We’re too old to have a second job now.
    So, life is getting dangerously unpredictable.

  4. Having just read “Fivepercent”s link,
    It appears Etsy suffered the Hack of a Lifetime.
    Probably by some terrorist group.
    This is the only plausible reason.
    Right around this time I also suffered 2 strange unauthorized charges on my card.
    This is in addition to the unwarranted Etsy charges.
    The first was less than a dollar, that was the test, then the next was for a few hundred.
    After replacing my card, the only way to get it replaced on Etsy was > I had to buy something.
    Now THAT was shifty.
    Someone needs to get us a New Virgin Venue that STAYS GOLDEN.

  5. I was fortunate not to have any charges placed against my accounts. When this happened, I went to Etsy and closed my listings, canceled my payment methods and closed my account. They were only a small part of my sales. Being on a fixed income with online supplements, I could not afford to have money disappear from my accounts. I wonder how many others have closed their Etsy accounts due to this “glitch”?

  6. “On Monday, Etsy CEO Josh Silverman will face Wall Street analysts who, like sellers, are no doubt wondering how the problem occurred and what the company is doing to stop it from happening again.”

    I wasn’t affected by this mess (Thank God) but it is nice to know that Mr Silverman will now have to answer to a group of people that obviously see there is something fishy going on. Hopefully, this will also bring more public attention the many changes that Etsy has made “in the sellers best interest” that have actually only benefited Etsy & put the sellers in a position of being at their mercy.

    The fact still remains that Etsy doesn’t even have a real customer service team of representatives that can be called upon in serious situations like this that have any answers. The only people I have ever spoken to are what I call the “Etsy Pacifiers”, these are people with little knowledge of much of anything. They simply take the information given to them to “the proper department” for their review, which of course never goes anywhere.

    There should be customer service departments that handle different issues & we should all be privy to those department phone #’s. I thought that was what part of our increased fees were supposed to be going for. For yet another fee, you have the option of paying for “Etsy Premium” which is supposed to get you better Customer Service…. a site of this size with as many issues as it has should offer all of its customers (the sellers) the same kind of support for absolutely no extra charge. Isn’t that what a “Transparent” company would normally offer their paying customers?

  7. And it’s STILL going on, with no word from Etsy as to when they will stop overcharging non-US sellers and thus breaking their own terms of use.

    “To avoid incurring foreign exchange charges, Etsy recommends you list your items in the same currency as your payment account currency.” Yet they are STILL over-charging non-US sellers and the 5% that is quoted in their terms of use is in fact nearer 5.2% in most cases. The VAT is also being overcharged.

    I find it baffling that this has not been reported in the press, as surely it’s illegal to charge your clients, because that’s what we are, more than you state in the agreement you both made.

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