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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)

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by: RosieMo This user has validated their user name.

Sat Feb 16 16:24:21 2019

And they are still milking non US sellers with no end in sight and we are being told to contact the non existant Etsy Support team for updates?
Fridays ''error'' is just one thing in a long line of mess ups, first the overcharging on transaction fees and VAT on said fees, then the altering of legal tax documents which are now useless then the mess of the 1099 and now this all in the space of 4 months and they concentrated their efforts on a new forum which was not needed and nobody likes.... it beggars belief where their priorities lie.

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by: Iwishiwaskidding This user has validated their user name.

Sun Feb 17 01:46:24 2019

Aaaaand yet another example of why being paid INTO my own paypal account  is a huge perk of selling on ebay.  How do they not see that this is a benefit of selling on ebay that they lose completely the day they force us all into adyen?  Knowing my money is not going to vaporize (it could any minute on etsy, mercari, poshmark...) is a hugenormous giant neon sign that, until 2020, says SELL HERE ON EBAY.

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by: Flying Childers This user has validated their user name.

Sun Feb 17 11:39:54 2019

Great comments- but why is Etsy above the law??  Any other company, the execs would be going to  jail.

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

Sun Feb 17 13:58:48 2019

Dunno about jail, but definitely some pink slips are in order.

It's been years since I had an active Etsy shop, so I haven't experienced the "new" Etsy Payments myself.  A comment today in that 50+ page Forums post mentioned that the way Etsy constantly debits sellers' bank accounts or charges their cards leaves no basis for internal auditing.

Some sellers who were hit with these crazy charges are beginning to see money returned to their payment accounts -- less either a 5% or 8.5% deduction.  Etsy appears to collecting fees on the money refunded due to their mistake as if the amount was from item sales!

It just keeps getting worse.  Am so glad I got out when I did.

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by: SammyCat This user has validated their user name.

Sun Feb 17 14:32:10 2019

They need to revert to the OLD PAYMENT SYSTEM - enough of taking money the instant a sale is made, and days before a shop owner gets their funds.  The length of time people are waiting for this to be resolved is the time it takes us to get our pay-out.  They got their cut in a nano-second.

This can not continue on as it is. 

The hike in fees is also costing Canadian sellers much more money in fees according to a friend.  Before they converted to US take their fees, and then back to CAD which meant lower overall fees.  So this 5% which in reality is STILL higher because they have not fixed their overcharging issue from last October is another debacle yet to be resolved.

They shouldn't be allowed to run a payment system on a retail platform - there is no separation and they can do whatever the hell they want without taking the proper care of other people's money.  The have a fiduciary responsibility which is not being met at its most basic level.  

Obviously some people over their are totally incompetent and so money hungry that they will let anything pass.  Some heads need to roll and a lot of people will not be satisfied until there is.  

I can only image the emotional stress and panic over and above the financial hardship this has caused so many.  

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by: lalaland This user has validated their user name.

Mon Feb 18 00:28:55 2019

by: Flying Childers This user has validated their user name.
Sun Feb 17 11:39:54 2019
Great comments- but why is Etsy above the law??  Any other company, the execs would be going to  jail.

Excuse me, but have you ever heard of a company called "eBay"?

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by: TDAKS This user has validated their user name.
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Mon Feb 18 02:50:21 2019

At least Etsy admitted there was a problem. A few years back the PayPal to Bank Account transfers of thousands of sellers simply vanished. It took PayPay almost a week to admit there was a problem. Sellers' money eventually came out of the black hole and landed in their bank accounts. It was the most 'quiet' catastrophe ever. Did YOU hear about it ?

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by: Disgusted This user has validated their user name.

Mon Feb 18 02:58:14 2019

Etsy is in a finacial collapse.  They only know how to copy ebay and in this case try to one up them.  It is all a game to them just like ebay.  Peoples lives are on the line and they really could care less.  

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by: rover This user has validated their user name.

Mon Feb 18 03:53:02 2019

''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.''

So if you were one of those sellers who were unfortunate enough to have been muted by Etsy's draconian forum rules you would not even be able to post in ''bugs'' that you had a problem. Unbelievable!

Etsy has a foothold in the EU and has already broken numerous EU directives regarding VAT, etc. I wish someone within that juristiction would sue the ass off of them.

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by: Fahrenheit451 This user has validated their user name.

Mon Feb 18 06:02:43 2019

Well, first of all I'm glad I pulled out of Etsy when I did, after six months of poor to nonexistent sales. Second, I never signed up for auto-pay in the first place. Third, I think an employee decided to enrich himself before he took off for the hills. It's been known to happen before. I would not blame PayPal, I'd blame Etsy for setting up their checkout the way they did.

If sellers are leaving in droves as I would guess, like I did, then Etsy has a lot to answer for. We were customers too but they were far more focused on liquidity instead of integrity. I for one am glad I don't sell on Etsy anymore, and you could not pay me to sell there.

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This user has validated their user name. by: lmhilly

Mon Feb 18 07:01:24 2019

I do have a seller account on there, haven't used for years. Was able to delete my credit card on there, but no way to delete my bank info on there. I had to delete the entire account. Oh well..............

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by: hawk This user has validated their user name.

Mon Feb 18 07:12:56 2019

it does not take long for greed , corruption , and incompetence to creep in to these companies. and the law lets them get away with it all the time. the mobs always has protection.

that leaves struggling sellers and honest workers without their money , as the corrupt get to do what they want with their money.

there has to be someone somewhere that can get these thieves put in prison for their practices. honest people are going without while they play with our money like phony gods. what a disgrace !!!

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by: Flying Childers This user has validated their user name.

Mon Feb 18 07:40:04 2019

I can think of NO other company in the real world that could get away with the mishaps  that are committed every day by Etsy and EBay.

At least in NY we have all kinds of consumer protection laws that heavily penalize contractors or companies that rip off buyers or customers.  Then there is the SEC and the state Attorney General.

For the life of me I can’t understand how Etsy is getting away with highway robbery.  Which is exactly what you call STEALING someone’s money like this!

Think what would happen to a crook who stole your credit card or debit card and used it to go on a spending spree.  They would get arrested and it would be treated as a CRIMINAL matter.

No way should the crooks at Etsy be treated any differently.

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by: MIscetal This user has validated their user name.

Mon Feb 18 07:41:10 2019

But it's 'just' a "small group of sellers."

Who does Etsy's PR?? Helluva job.

Since the remake of the site, visits and views are way down, and the forums virtually unusable. I'm not renewing until I see some forward motion - you know: improved search, photo editing, "rainbow" replaced with plain accuraate "multi-color" and a findable phone number for a live human doing customer service.

Because sellers are the site's customers.

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by: hawk This user has validated their user name.

Mon Feb 18 07:58:30 2019

this is the second time in the last 2 months that my small deposits were returned to my payment account. i didn't get my due money , but they d*m sure got there crooked , phony , promotion fees daily immediately.

if i would steel money in my small business just like etsy , i would be arrested immediately. what phony , 2 sided laws we have. isn't that wonderful !!!

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by: cvsharkey This user has validated their user name.

Mon Feb 18 08:11:51 2019

If you've had your credit card number changed & the old number made void, you might check with your card company as to how long they leave the old card open to vendor charges. I found, that on my Chase card, they allow additional charges for 3 months! This policy, according to Chase, was because customers were using it for re-occurring payments & didn't want to have to change the billing.  (I think that's bunk.)

I had this happen and what did Chase do? Change MY card number again, causing me to be without it until the new card came. It was later that I discovered the fraudulent charge had been on an old card number they has supposedly deactivated.

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by: notfunanymore This user has validated their user name.

Mon Feb 18 08:16:19 2019

Best decision ever made was closing my 5 eBay stores in 2018. It’s getting harder to sell online. Thankfully I wasn’t blinded. Anyone who cares to look at their online “business” will realize you are just a pawn. You have zero control of ANY part of your “business”
Was not easy to give up $400k monthly in sales, however. When you look at the risk-reward it wasn’t close.  When you pay the site you are selling on more in fees than you net, you’ll realize who works for who.. you work for them, and you assume all liability. So when you get sued by a manufacturer, it cost thousands to defend, and you’ve only made hundreds of dollars, (maybe) on the item, it’s a wake up call...

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by: ib30667 This user has validated their user name.

Mon Feb 18 08:24:54 2019

One of the reasons I left Etsy. I have heard nothing but bad things about their payment system. I'm sure it works for some, but the majority is not happy.

That is one hell of a glitch.

Selling online is becoming more and more challenging. More sites are using "direct payments" approach. I don't like these places controlling MY money. Or having too easy an access to my account.

It used to be "fun".  

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by: amarak This user has validated their user name.

Mon Feb 18 09:36:18 2019

I'm not sure how many people were aware of the Promoted Listings glitch on Etsy in January. For a couple of days, they were on the fritz. You could turn them off and turn them back on, but you wouldn't see or change any current bids. Well, they racked up a few bucks in one of my shops that never would have happened, because I keep a very close eye on them. And I had PL turned off at that time. I wrote Etsy, and much later on when I got a response, it was so cold and formula, denying there ever was an issue and that my PL charges were on my account. I know for a fact I wasn't the only seller reporting the issue, it was all over the Etsy groups on FB. Imagine how many thousands of dollars they scammed sellers out of by rigging the PL! I have to give them credit for being sneaky, because not every seller watches their PL like a hawk. And the way some listings get all the clicks, no sales, til you turn it off... reminds me of Office Space, if you catch my drift...

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by: SammyCat This user has validated their user name.

Mon Feb 18 11:24:18 2019

".... The bigger issue is they keep having major issues (usually on a holiday weekend no less), and how they handle it. This isn't a new company but a 14 year old company publicly traded for 4 years. There should be safe guards in place for such important things as this (and payment processor alternative). A big mistake shouldn't have to happen first.

Even though things can go wrong the other issue is how etsy handles it. Ignore, ignore, deny, look into it when finally hundreds of sellers are involved, admit there is a small issue, then later fix it and put in a safeguard."

THIS is key to the issue.  A seasoned company of 14 years that continues to play around with code as though its creative game, and by all accounts allows coders to make changes and then treat it as a game. Saving money on sandboxing proposed changes?  

Quit your day job they said, and what,  lose your home?  Starve?  

There are major black-outs regarding search, perhaps because people are on different servers that they basically turn off and on as an IT person suggested - turn 1 off and turn the other 1 on etc etc.  

There is no problem with search beyond them playing games with who shows up and when.  

How are payments and personal financial information not sacred and on a different server with authority given only to a hand selected few?  

This is amateur hour and there is absolutely no excuse good enough to have allowed this and other things to happen, i.e.: over charging those outside of the US for one, which is yet to be resolved after many months starting in the fall of '18.

Taking money for fees the nano-second a purchase is made if fraught with problems and they need to take heed and go back to the old billing method. Perhaps people waited to the last minute to pay, but that is their right, and laid out as OK by Etsy.  I also believe that we should have a choice from what account or CC we wish to pay.  IF they don't like the 15 days, then make it 7, but to take it instantly is craziness IMHO. 

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