Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sat Dec 5 2015 20:41:06

Sellers Fret as Etsy Holds Their Funds

By: Ina Steiner

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Etsy has delayed sending payments to sellers who use its Direct Checkout system, a problem occurring since the long holiday weekend. The first issue impacted international sellers on Cyber Monday and was cleared up on Wednesday, but now it's impacting US and international sellers, who are writing to EcommerceBytes about their missing funds.

Sellers are fretting over bills they have to pay and are concerned about whether Etsy will come through on Monday with their money that was due on Friday.

"I hope the Etsy employees are all having a great weekend and able to pay bills, go out to dinner, and do other fun stuff. The sellers are all missing funds that we could all be doing this stuff with. Not your late rent payment, car payment, phone bill,etc....so it isn't a big deal to you," wrote one frustrated seller on the Etsy discussion boards.

A number of sellers are so concerned that they are deciding to turn off Direct Checkout. One such seller wrote to EcommerceBytes, "Etsy hasn't been releasing funds to sellers from the Direct Checkout system. For the past few days it was just international sellers. As of yesterday US sellers, including me, didn't get a scheduled deposit."

Another seller told us, "A large number of sellers, including myself, have turned Direct Checkout off until this is fixed. We see it as, if we miss a sale because of it, there is no difference. We aren't getting the money from the sale anyway."

An Etsy moderator posted today at 2:26 pm:

"Our apologies for the delay with getting back with more details on what has happened with deposits scheduled for December 4th.

"This appears to have impacted both US and International Shop Payment Account deposits. 

"Our Payments Team is aware of this issue and investigating. However, since it’s after banking hours, deposits will have to be sent on Monday.

"We'll be sure to update with more information as soon as we receive it."

Some sellers wondered if Etsy was having a cash flow problem of its own. You can read the expanding thread here beginning on page one.

Update 12/6/15: Spokesperson Nikki Summer provided us with a letter Etsy is sending to sellers who were impacted that began going out this evening:

I'm writing to sincerely apologize for the delay with Friday's Direct Checkout deposit, which was  caused by a technical error. Your funds will be disbursed tomorrow (Monday) and will be credited to your bank account no later than this Wednesday, December 9. You do not need to take any action at this time.  

About 12,500 sellers were impacted out of our 1.5 million seller community, and we take this seriously. To acknowledge this error, we are refunding to impacted sellers the listing fees, transaction fees and Direct Checkout fees associated with sales between their last deposit and the deposit originally scheduled on Friday, December 4.  For most of the impacted sellers, this represents one to three days of sales, but for some, it is four days. This refund will be included in tomorrow's deposit and will be seen in your Shop Payment Account account as an "Etsy Miscellaneous Credit."  If you incurred late fees or overdraft fees from your bank account in conjunction with our mistake, please contact us through the Help Page so that we can reimburse those, too. Our hope is that this refund will help address any difficulty you experienced and that you will accept this as an apology for any disruption that this caused over the weekend. 

The delay was due to a technical error that prevented the deposit file from being created. As of last evening, the technical error has been addressed. Unfortunately, the monitoring we have in place to ensure the creation of a deposit file did not detect the error, and we were not aware of the issue until we started seeing reports from sellers. Please know that we are not withholding your funds over the weekend intentionally. ACH rules prevent us from transferring money over the weekend. Our payments team is looking into ways we can improve our monitoring and deposit process so this doesn't happen in the future. We'll report back to you on our progress. You can read more here.

We are grateful that you're part of the Etsy community and very much appreciate your business. Please don’t hesitate to reach out to me by Convo if I can be of assistance to you.
Thank you,
Heather Jassy
SVP, Members and Community

We've got more on this story in Monday's EcommerceBytes Newsflash, available here.

Let us know what you think of how Etsy is handling the issue.

Comments (47) | Leave Comment | Permalink
Readers Comments

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: Watching the Wheels This user has validated their user name.

Mon Dec 7 00:47:38 2015

Marie, the dweebs working at Etsy mean well. The REAL problem is that their corporate culture DOESN'T PUNISH FAILURES.

They have cranked out half baked coding since, I've been on the site.

Has Etsy offered to cover any overdraft fees that might have been charged to their sellers because of ETSY'S FU?

Are the sellers determined enough to fight for this money. I have  NEVER CONSIDERED GOING WITH THEIR PAYMENT SYSTEM based upon their record of mediocrity.

I use Paypal, and for a couple of reasons.

1. Paypal KNOWS WHAT TELEPHONES ARE

2. IF willing to fight them into a corner, Paypal will refund lost funds caused by their screw-ups.

@Marie, Etsy always TRIES to do the right thing. The REAL problem is that they just are NOT "TOP SHELF", AND THAT IS MANAGEMENT'S FAULT.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: joyful17 This user has validated their user name.

Mon Dec 7 01:20:11 2015

Watching the Wheels is right! I ONLY use PayPal...and get immediate payment...have never understood why ANYONE would use direct checkout and have Etsy 'hold' your money(while they make a % on it)...when you have the option of choosing to use PayPal!

Yes, having a 'real' person to resolve problems is a plus for PayPal users. An easy call back ; problem discussed;problem solved; and Bob's your uncle!!

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: Marie

Mon Dec 7 02:23:37 2015

@watching the wheels

"Has Etsy offered to cover any overdraft fees that might have been charged to their sellers because of ETSY'S FU?"  YES they did.

I wasn't trying to defend Etsy, their actions or their lack of action, whichever situation it may be.  My point was accusing them of serious infractions without any facts or proof to support isn't right.  Not everything is a conspiracy against sellers as some would want you to believe.  Sometimes is it just human error.



Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: fgilles02420 This user has validated their user name.

Mon Dec 7 06:31:53 2015

Agree totally with the two above posters. I've never signed up for Direct Checkout - paypal only until Etsy can provide prompt, reliable customer service by phone. This is only one more reason not to allow Etsy to handle my money - I've never had a problem accessing my funds on paypal in over a dozen years of using them.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: White Rabbit

Mon Dec 7 07:38:20 2015

Well thankfully Etsy has their Suport working full time here - just like on the Etsy Forums.

Personally, I do not trust a word Etsy says. not one.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: White Rabbit

Mon Dec 7 07:47:02 2015

A computer glitch is an excuse word to say my Etsy companies 100+ programmers can not do their jobs correctly. Blaming a Real thing called a glitch is nothing more than saying they totally screwed up a job that should not be screwed up- the member's money. The deposits were fouled up twice in one week .. international and then USA- member's checking accounts were then not funded so they could NOT pay their bills. Excuses are sweet and flowery but they do not excuse the incompetence that this was blamed on.

If it was intentional? and the excuse a LIE then that means Etsy has big problems . Who knows.. Either way this is totally inexcusable  

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: White Rabbit

Mon Dec 7 07:54:27 2015

Marie- Etsy was accused of exactly what they did- a fact so accused is a wrong word to use. A fact is a fact. plain and simple.

they did not pay their sellers on time twice in one week.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: maxmad This user has validated their user name.

Mon Dec 7 09:59:25 2015

I think smart informed sellers have already done this, but if you have not already done so,

this should be a clear warning call to at least opt-out of combining your paypal sales with etsy Direct Checkout,

What ever is going on over there, it appears to not be resolved yet.

and by the looks of their financial statements, you would have no choice, but to be very paranoid right now, they are definitely bleeding red

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: Volvo351 This user has validated their user name.

Mon Dec 7 10:09:09 2015

@User1313

Your post smacks of blaming the victim. The financial habits of the sellers have NOTHING to do with etsy'e behavior here. etsy is in the wrong, period.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: Volvo351 This user has validated their user name.

Mon Dec 7 10:10:34 2015

@Watching the Wheels

Software failures at etsy probably pale in comparison to what the brainiacs at feeBay routinely release!

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: Whatever This user has validated their user name.

Mon Dec 7 10:20:45 2015

And these shenannagan's are shocking? People - their corporate now. No more to be said.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: Bad Hair Day

Mon Dec 7 10:29:28 2015

I've always thought that Etsy had a lot of nerve charging the same processing fee as PayPal. They don't even come close to offering the same services as PayPal, including most importantly 'customer service'!!!

You  think they would have cut their sellers a break!?!

How can they justify charging the same fee as PayPal who has been in business infinitely longer and provides more comprehensive services?

Woo their sellers away from that 'dasterdly' PayPal...charge the same high processing fees with inferior services...then turn around and accept PayPal on their site anyway???

May I also add, that I am not a conspiracy theorist, however I would love to hear from those individuals who have ever been directly impacted by a glitch that has worked in favor of the seller?

All these companies need to add the same iron clad security on our monies as they do theirs!!

 

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: White Rabbit

Mon Dec 7 10:30:38 2015

If I was Paypal and Had an account like Etsy.. as now most all paypal traffic goes through the Etsy Account. I would certainly be concerned.. If I was Paypal and I read the Etsy Quarterly reports of less than Zero Income. The projected next 5 quarters are available on the internet also.. very sad looking. see Wedbush.  Wedbush info:

they have been proven to be conservative in the past so I assume again here they are conservative.
http://bit.ly/1Sgfp8J

If I was paypal, I would certainly require a hefty multi million $$ deposit to cover all possibilities.

I do hope this is resolved now as it is the Christmas season and things are bad enough for sellers generally on Etsy this year.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: cillianred This user has validated their user name.

Mon Dec 7 10:31:37 2015

@Marie

"After reading the same kind of stuff over and over and over again about any subject posted here, it just gets old."

1000% in agreement with you.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: maxmad This user has validated their user name.

Mon Dec 7 11:52:47 2015

Yes it sure does get old, hearing about the same manipulation tactics, and abuse that these venues do to sellers (aka customers) once they start needing more and more money, they all of a sudden switch from providing a simple balanced classified ad service, to becoming a greedy retailer, only showing products from sellers that make them the most money.

it's a Disgrace, and yes it sure is getting old,  

 

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: eXtinctBay

Mon Dec 7 11:58:42 2015

Etsy is a sinking ship. I was in a network marketing business for a brief period of time, and they kept changing the compensation plan for those in the business.

And they soon closed the doors. And everyone who invested in the company lost money. As they have changed their payment options to include PayPal, and their stock price is in a freefall, Etsy is in trouble.

Now this. Run for the hills before they file for bankruptcy, and hold everyone's money. You will NEVER receive your funds, they will keep them when the site is shut down. Glad I don't sell on there!!

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: Toledo Maude This user has validated their user name.

Mon Dec 7 12:05:14 2015

When eBay drove me to Etsy three years ago, I was quite impressed with Etsy's payment system.  
Money was in my bank within two days of a sale.  And due to Etsy's low fees, more money was in my bank account.

I have not had a problem with Paypal since they lost one of many class action law suits to the tune of $50 million 10 to 12 years ago.  Before that Paypal screw both buyers and sellers very democratically.  

Since then, Paypal has pretty much behaved.

But my immediate problem on both eBay and Etsy is low sales.  Looking at a spreadsheet comparing the first week of December 2014 to 2015, sales are down this year by 66%.  

Not looking good for Santa this year.  

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: Marie

Mon Dec 7 13:24:26 2015

@White Rabbit

I think you are jumping in the middle of a conversation I was having with another poster.  To know what I was addressing, you'd need to go back and read all my posts.

I have no argument with the FACT they did not pay their sellers on time.  Absolutely a fact and has been admitted to by Etsy.  

@bad hair day

They charge the same fees as PP because they process through PP.  Etsy offers this service to those sellers that do not want to deal with PP directly.  Etsy takes on that responsibility.  Not that they have done well in that regard.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

by: monarch 1 This user has validated their user name.

Mon Dec 7 14:27:00 2015

Wow, this hits me with a double blow. I am a vendor unable to access my funds. Also I purchased a shipping label for Canada shipment. It did not print the postage, TWICE! I have be reimbursed for one label but not the other. This is all very disturbing indeed.
Thanks for the info.

Perminate Link for Sellers Fret as Etsy Holds Their Funds   Sellers Fret as Etsy Holds Their Funds

This user has validated their user name. by: Bad Hair Day

Mon Dec 7 15:02:34 2015

@ Marie

I respect all of your posts. However, Etsy has been charging that high transaction fee since they got into the payment processing business.

That fee is 3% + 0.25. PayPal fee is 2.9% + $0.30.

They have only recently started processing through PayPal..I think in the last few months?

I reiterate. They have a lot of nerve charging their sellers such a high transaction fee for what they offer as compared to PayPal.

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