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Fri Feb 15 2019 15:39:31

Etsy Money-Grab Glitch Causes Havoc for Sellers

By: Ina Steiner

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Etsy took money from sellers' credit cards or bank accounts that they don't owe the company, some sellers are reporting this afternoon. In some cases, the amount is in the hundreds and even thousands of dollars. It appears to be a glitch, but questions remain about how it happened and how many sellers were impacted.

Etsy acknowledged the issue when a seller posted on the Bugs forum at 12:22 pm ET that Etsy had drafted $395 out of her checking account when she didn't owe any fees.

At 1:18 pm, an Etsy moderator wrote: "There's a team working to correct into this as I type. Once I've got more information, I'll be updating this thread. I'll be pinning this thread to the top of Bugs and directing other threads about this situation into here for easy updating. Thanks!"

In the meantime, some sellers reported Etsy had charged their credit cards, such as a seller who said Etsy charged their card for $344.46 despite having held a positive balance. "Why doesn't Etsy have a email support or phone number to get answers," the seller asked.

One panicked seller said Etsy took funds she didn't owe the company out of her checking account. "Etsy took over $$$$ out of our checking acct too!! WTH?? My husband is on the phone with them trying to stop that!"

"Charged over $12,000 to my credit card! Card has now been de-activated due to suspicion of fraud! What is going on," another seller asked.

On another thread where sellers discussed the issue, some sellers reported a supposed fix from Etsy that seemed to further complicate matters for some sellers. "They charged my CC, yet they want to refund me through my Etsy Payment Account. I don't even have access to that money until it is finally deposited into my bank account (Monday is also a federal holiday). For the time being, this is a pending charge on my CC, and they SHOULD be refunding or stopping these transactions before even have the chance to go through, instead of refunding us through our payment accounts."

Another seller said, "Same thing happened to me today. I called, and instead of reversing the incorrect charge back to the credit card, they sent the money to my bank account. Really? So, now I am responsible for paying a 1317.00 bill on credit card, as well as any interest from 3 days until money clears on Monday. They would have had to pay a bank service charge for the reversal, oh well. They goofed big time, now it is my responsibility turned off autobilling, so that will not happen again. My question is how it happened in the first place. Scary. With their new policy, I never have a bill, so whoa, this is a big bad thing."

One seller advised his colleagues to call their banks. In his case, his bank opened an investigation, but won't charge him interest, nor will they make the withdrawal appear as an over-the-limit purchase until the issue is sorted out.

The Presidents Day holiday is adding further stress for sellers worried about their liquidity over the long weekend.

We've got an inquiry in to Etsy.

Update 2/15/19: Etsy referred us to its update on the thread that is pinned to the top of the bugs board:

"We're aware of a bill payment error affecting a small group of sellers which resulted in some cards being incorrectly charged. We don't expect this error to impact additional sellers going forward.

"For affected sellers, we're very sorry for the trouble or concern this may have caused and we are currently working to make things right. We'll update the impacted sellers directly as we have more information. Thank you."

Update 2/15/19: Some sellers who were impacted said they received emails from Etsy. One email informed a seller that Etsy refunded the charge to her card on file - "and it should appear on your statement shortly." It seems sellers should expect their Etsy payment account balances to go back down accordingly. 

Sellers continue to express concern about the fallout, including fees and overdraft charges (in the case of checking accounts), as well as possible tax ramifications.

Update 2/16/19: Etsy apologized to sellers and acknowledged another problem that arose as it tried to fix the initial error: "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."

Etsy also said it would "refund any undue fees associated with this incorrect charge and change in deposit schedule" - see more in EcommerceBytes Newsflash.

Update 2/23/19: See the following updates published in Newsflash:

"An Update on the Etsy Billing Disaster" (February 22 Newsflash)

"Etsy Updates Sellers on Last Week's Billing Glitch" (February 23 Newsflash)

Comments (55) | Leave Comment | Permalink
Readers Comments

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This user has validated their user name. by: NoMoreEbay

Fri Feb 15 15:48:32 2019

These 'glitches' always seem to favor the company and never the customer.

Every single victim should report Etsy to the FDIC for theft of funds.  

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This user has validated their user name. by: Marie

Fri Feb 15 17:01:02 2019

That is a DARN SERIOUS glitch!!!  It doesn't appeared to have happened to me, but this is really bad!

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by: sasikat9 This user has validated their user name.

Fri Feb 15 17:09:01 2019

Had dollars taken illegally. Called my credit card and they put a stop payment on the money for fraud. According to the bank Etsy will get no money. They also cancelled my card and reissued it with a different number. So now Etsy can straighten the mess they made out with the bank who has many more smart people than Etsy does.

We used Capital One Venture Card.

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by: Sierra This user has validated their user name.

Fri Feb 15 17:11:28 2019

OMG! I first read about this on FB a few hours ago, posted to the 2 teams I captain and then read some of the Bugs forum. What a nightmare!  

It looks like this may have happened just to sellers who had auto-pay set up to pay their Etsy bill. If you have auto-pay, check your payment account and bank account or credit card that you use for auto-pay!

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by: mcposty This user has validated their user name.

Fri Feb 15 17:34:44 2019

I never trust any establishment with autopay, this does happen with other types of services such as car payments, electric bills etc..I know autopay is probably really convenient, but it can bite you one day like this and cause all sorts of problems..imagine if you had to pay overdraft fees or overage limit fees..the nightmare of trying to get those fees from etsy?

Just do things manually is my best advice.

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by: mysticmoons This user has validated their user name.

Fri Feb 15 18:32:18 2019

It is NOT only sellers with auto pay and it isnt people using a credit card vrs people using a debit card. There are many sellers who are not on auto pay reporting it being done to them! Someone just posted a 124,000$ deduction that his bank refused to pay!

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by: KyuuketsukiNiko This user has validated their user name.

Fri Feb 15 18:55:26 2019

They charged me about $3000 for a balance that doesn't exist. All I've gotten from Etsy is an email that basically says, "oops! our bad!" and that's not going to cut it. They stole thousands (maybe even hundreds of thousands) of dollars from people and will be collecting that interest through the long weekend. Seeing as how this isn't the first time this has happened, one has to think either this is premeditated or gross negligence.  

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This user has validated their user name. by: The End

Fri Feb 15 20:27:14 2019

Ya, over the coarse of last year, they hit my card TWICE at the End of Every Month for several months.
Didn't notice it 'til now.
They owe me HUNDREDS in fraudulent charges.

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by: FairlyGhoulish This user has validated their user name.

Fri Feb 15 21:09:57 2019

One of many recent slipups by Etsy. A pay system that is too complicated and convoluted for tax accountants, new forum that doesn't work, team members blocked from their teams and now this. Will Etsy pay for all those credit fraud cases? Restore lost credibility to customers? Handle any legal charges for it's paying members?  As a now PUBLIC entity, they can no longer conduct business as usual.

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by: OnlyPollyPocket This user has validated their user name.

Fri Feb 15 21:34:54 2019

@sasikat9

"We used Capital One Venture Card"

Capital One is A-number-1 at CYA for it's cardholders.  I have had a few issues over the years with thieves and scammers and CapOne always has my back!

On topic:  I didn't get hit but my heart goes out to all who did and hoping that it gets squared away satisfactorily for you.  I just don't get why every single employee at Etsy (including Silverman!) isn't burning midnight oil getting all of these charges reversed, immediately, TO THEIR ORIGINAL SOURCE

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by: SammyCat This user has validated their user name.

Fri Feb 15 22:18:20 2019

I am still locked out of my own team where i am a captain.  That stupid new forum sucks.

Raised fees and got nothing for it - no phone support, lower sales, claims department a joke,  no one knows anything about vintage over there -- bottom line, no nothing except BS and more BS.

Ppl outside of the US still NOT refunded for overcharges that was revealed last October -- and still being overcharged.  Suspect it was always the case but because we didn't see it in our own currency, and because Etsy never revealed their exchange rates in real time we didn't know and can't do anything about it.

Search still sucks and sales are down for most people.  Personally, last year ended down over 50%.  

Now funds being pulled from CC and bank accounts - the consequences of which can be huge;  credit rating, bank charges, nsf's etc etc.

What in the hell is going on over there ... is there anyone in charge?  

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by: SammyCat This user has validated their user name.

Fri Feb 15 22:43:23 2019

oh and they messed up the 1099's as well.

It seems you have to pay to get support -- who in the hell does that???  

You need to buy into one of their 'plans' to get support now it seems.

I do NOT see a bright future for Etsy.  

Just too much that sucks and goes wrong, without accountability.  

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by: Lowe40 This user has validated their user name.

Sat Feb 16 01:04:43 2019

Etsy needs to get their shit together or they’ll be going down the crapper!

NOTHING they’ve done in the last year-ish timeframe has been good/worked/helped.

They need to get it together or get someone who can get it together.  Sooner rather than later!

Perminate Link for Etsy Money-Grab Glitch Causes Havoc for Sellers   Etsy Money-Grab Glitch Causes Havoc for Sellers

by: Silver Ice King This user has validated their user name.

Sat Feb 16 07:49:25 2019

I do not use Etsy but I said last year when they suddenly started taking fees out of Sellers sales immediately and also collected all the fees owed from the previous month that this sounded like a company that was having major cash flow problems.  Now they are taking money that they have not even earned and do not seem to be all that concerned about getting it back to the Sellers.  Once again it still sounds like Etsy is having problems paying the bills and are now stooping to Ebay levels to get the cash they need through Interest Free loans from their Sellers.

Etsy at least appeared to have things under control on their Managed Payments program but now it is starting to look like its not anywhere near as smooth as everybody was giving them credit for which should now really concern those Ebay Sellers who are in managed Payments or are going to be soon when Ebay starts the second round of lowered sales due to their requirements.  

Etsy had been given so much credit for not following all the bad moves that Ebay had done and then they go and hire a new CEO who was trained by Ebay and low and behold they suddenly have the same issues that Wenig and Ebay have.  

i wonder if Wenig and Silverman chat daily to compare ideas on how to destroy their companies cause they sure seem to be on the same page these days.  I wonder if Silverman Shorted Ebay and Wenig Shorted Etsy just as these issues started happening.

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by: MissEnchanted This user has validated their user name.

Sat Feb 16 09:44:11 2019

I just got an email from Etsy stating that funds that were  deposited yesterday were being returned to my payment account ("Due to an error that we experienced today..." -- nice passive deflection of responsibility.)

It's pitiful accountability. They grab every possible penny as soon as they can (listing fee, transaction fee, shipping fee, payment processing fee, shipping label...), yet it's OK for them to hold on to MY money for a few extra days when they "experience" an error?

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by: cat_rage This user has validated their user name.

Sat Feb 16 10:02:57 2019

This is an outrage!  They charged my credit card over my limit.  I reported everything to the NY State attorney general.  I no longer trust that gawd awful site.

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This user has validated their user name. by: iheartjacksparrow

Sat Feb 16 11:41:00 2019

Saw this on the forums:

"Sounds like somebody needed A LOT of money today and borrowed it without asking from a whole bunch of shops personal bank accounts.  Putting it back into payment account and not refunding the CC's directly immediately gives them an interest free HUGE LOAN until they make payments to the accounts."

Think this seller is correct.

Perminate Link for Etsy Money-Grab Glitch Causes Havoc for Sellers   Etsy Money-Grab Glitch Causes Havoc for Sellers

by: Caza88 This user has validated their user name.

Sat Feb 16 12:51:17 2019

Well it makes Etsy's bottom line look better for their likely abysmal quarter. Like the temporary increase in businees from merging PayPal to theirs and increasing fees ( it is only a temporary increase) they are running out of ways to make it look like the company is thriving when it is not....resorting to dirty tricks now.  

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by: leathermermaid8 This user has validated their user name.

Sat Feb 16 13:01:10 2019

Along with a very public statement about what went wrong and how they plan to FIX this and how long it will take, they should also give ALL the interest they earned on this glitch/loan/float they took, back to the sellers.

There's just no way they can spin this and come out looking good. Stockholders, potential  sellers, take note.

UNreal.


 

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This user has validated their user name. by: Life During Wartime

Sat Feb 16 14:06:53 2019

It might surprise people to know that major corporations (much bigger than Etsy) have issues when employees distracted by holiday and long weekend enticements set up billing or payroll processing incorrectly.  To prevent something like what happened on Etsy this weekend, you have to have internal auditing on financial processing before it gets out to the banking system, employees, vendors, and customers.  

Etsy has long had the reputation for being a company where employee errors have little to no consequences.  Everything Etsy is about the playful whimsey, and "code as craft".  I'd like to think a scare like this would force upper management to pull up their big kids training pants and try to act like adults.  But I don't see this happening.

If Etsy paid as much attention to the boring nuts-and-bolts responsibilities of their business as they do to monitoring Forums posts they'd be the tightest run corporation on the planet.


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