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

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

Sat Dec 5 22:49:52 2015

I'm guessing PayPal has Hamstrung Etsy.

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

by: User1313 This user has validated their user name.

Sat Dec 5 23:28:30 2015

By the looks of the comments in the bugs forum on Etsy, 99% of the sellers live paycheck to paycheck with little or no reserves.

While Etsy holding their money is certainly unacceptable, It would be wise to learn money management.  

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

by: Sierra This user has validated their user name.

Sat Dec 5 23:37:33 2015

@User1313, Guess I'm part of the 1% then. I'll get by until things get ironed out, and I know a couple of attorneys in case I have to chase Etsy down to get my $16.  

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

Sun Dec 6 02:31:51 2015

It is unlikely that Etsy is co-mingling the funds from these payments with Etsy's money.  For accounting purposes and legal ones, the funds would have to be separate.  If Etsy were to transfer from the funds owed to various sellers into their own account [Etsy's], they would be risking their entire business.  So for that very reason, it is highly unlikely that they are mixing the money.

@user1313

Not everyone earns enough money to do anything but live paycheck to paycheck.  There is a wide range of income levels and other diversities among sellers.  

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.

Sun Dec 6 06:49:57 2015


not sure if you remember, but they did try to get sellers just recently to integrate paypal with direct payments, we opted out, as we saw absolutely no benefit with etsy holding our paypal funds like they do with direct, but they must have had a good reason to try and woo sellers to do this? like earning interest on the float,

I think it's bad for everyone, rich or poor sellers, and definitely bad for etsy's reputation, regardless of what is causing this delay,

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

by: mickey This user has validated their user name.

Sun Dec 6 08:55:39 2015

we sell on etsy and amazon. no problems at all with immediate deposits to bank account by etsy. now amazon is another story, they hold your funds for a week and sometimes they still deposits small amount of monies into your account to spread out your payments. now this is a site that won't make you rich with slow small deposits. etsy is a real blessing. just hang in there! everyone or every place of business have rough patches they go through. Etsy is a much Better class of folks to deal with than selling on ebay. now that's another chapter.

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

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

Sun Dec 6 09:14:58 2015

Etsy has been abusing its sellers in so many ways, so this is the icing on the cake. The thing that makes Chad & Co. so obnoxious is their constant BS about how they have invented a "new" kind of e-commerce that is all sweetness and light when in reality, they are just as cut-throat and sneaky as everyone else.

Since they have flooded the site with factory made Chinese goods that they have allowed to be mislabeled as "handmade" and "vintage" sellers have had no choice but to branch out and try something new.

As everyone here knows, that is surely a good thing.

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

Sun Dec 6 10:00:58 2015

You can bet one thing what ever Etsy says is a lie. They just happened to have a software glitch that resulted in Canada and International members to not get paid last week? Then a few days later it happens again to USA members? Blamed on the faulty Computer Programming that they are responsible for? The dog ate their homework?

A little while back something similar happened to the unpaid? Canada Post shipping labels they sold to their Canada Members. The Labels were refused at the Canada Post Office.

I do not know if this was caused by a lack of funds on Etsy's part but you better believe the Stock Market World will think this. Twice in one week is not good. Perception is just as bad as reality when it comes to the stock market of a public traded company with a track record of zero income.

A company with almost a year of Zero income that does not pay their bills "as in their sellers" is not perceived as a good thing. real or not real does not matter.

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.

Sun Dec 6 10:06:35 2015

Why do these "payment services" charge you a fee, ostensibly to GET your money, then they don't give it to you?

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

Sun Dec 6 13:12:43 2015

@Volvo351

They charge a fee because they are providing a service.  That is what they do, it is why they exist and they are a for profit company.  If we didn't have companies like PP [& others], then millions of sellers would not be able to sell on the internet as they would not have a way to accept money electronically.

I'm not defending any company for the amount of fees they charge or  any reason.  I'm just answering your question.  If they didn't charge a fee, then the company could not exist to provide the service.

In Etsy's case, it is my understanding that they partnered with PP for their process.  That would mean that PP has the money and it is Etsy's responsibility to make sure it is dispersed back to the individual sellers.  It further appears from what has been posted on the subject that it is Etsy that is having the issue, not PP.

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

by: StayClassy This user has validated their user name.

Sun Dec 6 13:30:27 2015

This is a bit more worrisome than Etsy simply holding funds. Earlier they were late in payment to Canada for postal fees they had already charged sellers for , they disabled phone support , they cut back on Mods in the forums leaving the forums wide open after hours and weekends, not to mention the glitchy mess in shipping labels and listing bugs. Stock is below $10 now - if I was a betting woman I'd say they are cash strapped. How long before the investors vote no confidence in Chad Dickerson and get his butt out of there taking his techie crew & blameless post mortem with him. I hope they do that before they decide to cut their losses and liquidate. It's more than fretting...it a RED FLAG.

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: iheartjacksparrow

Sun Dec 6 15:46:22 2015

What I don't understand is, if the payments have been going to the sellers as scheduled up to this point, what changed to break the system? It almost does seem like an intentional "glitch."

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

Sun Dec 6 17:03:14 2015

Seems like people here look or see a conspiracy around every corner.  While this certainly is a problem, a serious problem that needs a rapid solution, other than a bunch of guess work and gossip, there is nothing to show it was done on purpose.

Programs have issues from time to time.  They fail, they act up in some way, they mess up...  Each time this happens does not mean it was intentional.  Something cause the problem most certainly, but an intentional problem.  Not necessarily.  

Could have been a new program that affected in it a way that wasn't anticipated.

Could be an update to the program affected it in a way that wasn't expected.

Could be some type of virus, which then would make it intentional, but not necessarily by Etsy.

It could be a lot of things and it could even be a conspiracy, but so far, for me, I've seen no facts to support that at all.  However, I should say I could have missed some information, as I'm sure I haven't read everything.

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

by: booksy This user has validated their user name.

Sun Dec 6 17:31:37 2015

While this is certainly a concern, it is NOT happening to everyone.

I'm in Canada and my postage labels worked last week, and I also got my deposit this past week, so it's not like Etsy just flipped a switch and said 'hold all the funds for a few days'.  

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: bitbybit

Sun Dec 6 17:37:50 2015

Marie, not disagreeing with you, but so many sellers have been intentionally manipulated by eBay that suspicions are bound to carry over to other venues. Sellers had to endure years of deceit, draconian policies and abuse starting with Meg and then going full throttle with Donahoe. I'm not on Etsy but have read about how Etsy is turning into a mini me clone of eBay. Both sites started out so nice too. What a shame to have paranoia run so deep.  

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

Sun Dec 6 17:57:32 2015

@bitbybit

I get that.  But being paranoid about everything isn't the answer.  It is unhealthy and it will not help anyone EVER.

After reading the same kind of stuff over and over and over again about any subject posted here, it just gets old.  Even when it clearly isn't the sites problem, whether Ebay, Etsy or some other one, some posters can't help themselves but to post stuff like this.  

The reason blog regarding an Ebay promotion is a good example.  The problems outlined were because the seller didn't understand the promotion.  Ebay had not done anything wrong.  Yet it suddenly became Ebay doing a bait and switch which had no basis in reality or fact.  Just paranoia.  Now I know Ebay gives us plenty of reason to be suspicious, I've been on Ebay almost since the beginning.  But we all need to keep a grasp on reality or we are doing far more to hurt ourselves than anyone else could ever do.  

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: iheartjacksparrow

Sun Dec 6 21:47:27 2015

@Marie - I disagree that anyone wondering if the payment glitch is intentional is "paranoid." I think it's a valid concern that Etsy may not have the money to pay the sellers based upon recent events. Remember the "glitch" where PayPal was paying sellers' funds directly into the account of Etsy? Also, shares on opening day of the IPO were $30 each; shares are now down to a little over $9. I don't know anything about the procedures of Direct Checkout, but as a person on the "outside," it seems suspicious that payments scheduled for Friday are delayed until Monday, giving them three days to do what?  

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: Ina

Sun Dec 6 22:10:41 2015

Just posted an update to the bottom of this blog post - Etsy provided details of what went wrong, how many sellers were impacted, and what it's doing by way of apology to those sellers who were impacted. Also see Monday's Newsflash for details.

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 00:11:39 2015

Jack

I still think it was a big leap to suggest it was intentional.  And now in light of Etsy's response that Ina has noted, clearly they are trying to do the right thing.  If they were as cash strapped as you state, they would not have been so generous with the refunds they are giving the affected sellers.

It is just my opinion, I just think it was way too soon and not near enough information to make such an accusation.  

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

by: Interesting Antiques This user has validated their user name.

Mon Dec 7 00:40:04 2015

It is 'funny' because just last week etsy 's Canadian sellers who printed out their labels (charged by & paid to etsy) had a terrible experience- postal clerks were telling the sellers that etsy 's account was blocked. etsy stated it was a glitch, another glitch? related to monies. How embarrassing it seems someone did not pay Canada post's bill and they blocked etsy.
Seems a little funny to have these 'glitches' so close together and related to paying of monies.
cash strapped? money flow problems? Who knows!  

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