Online marketplace Etsy has announced adjustments to its policy in response to complaints from UK sellers. These sellers were experiencing a “reserve system” that withheld 75% of their earnings for up to 90 days, causing financial difficulties. The reserves were initially intended to cover potential refunds and protect buyers. However, Etsy has acknowledged that the policy changes implemented in 2021 may have caused disruptions. Head of Payments Chirag Patel stated that the company will substantially decrease the percentage of funds held in reserve for the majority of sellers. These changes are expected to be implemented in the coming days.
Despite this announcement, some sellers remain unsatisfied due to the vagueness of the statement. They argue that Etsy has negatively impacted their lives and benefited from holding onto their money. The UK’s Small Business Commissioner, Liz Barclay, has requested clarification from Etsy regarding the reduction in reserves and its timing. Minister for Enterprise, Markets, and Small Businesses, Kevin Hollinrake, has also reached out to the company, emphasizing the importance of not jeopardizing reputable small businesses.
In response to the lack of communication from Etsy, some sellers have decided to put their shops in “holiday mode,” making their items unavailable for sale. This action is part of the “Etsy Reserve Strike,” with a Facebook group supporting the protest gaining 1,100 members. It’s worth noting that Etsy faced a similar backlash last year due to its increase in seller fees.
Overall, Etsy is revising its policy to address the concerns of UK sellers and minimize disruptions. The company aims to find a balance between protecting buyers and supporting the livelihoods of small businesses.
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