With Earnings Locked Up, Etsy Sellers Threaten Strike

Marketplace's promise to alter its payment reserve policy comes without details
By Arden Dier,  Newser Staff
Posted Aug 3, 2023 12:15 PM CDT
With Earnings Locked Up, Etsy Sellers Threaten Strike
File photo of an Etsy mobile credit card reader.   (AP Photo/Mark Lennihan, File)

Online marketplace Etsy says it's adjusting a policy that some UK sellers complained was ruining their businesses, though that hasn't done much to avoid what's been dubbed the "Etsy Reserve Strike." The BBC reported this week that some sellers on the platform were seeing 75% of their earnings held in a "reserve system" for up to 90 days, leaving them without the funds to buy materials or pay bills. A seller could have earnings put in reserve due to a sudden increase in sales, a policy violation, or other unknown reasons. Etsy initially said the reserves were to be used to cover potential refunds and were important for protecting buyers. In a Tuesday statement, however, Head of Payments Chirag Patel said the company recognized expansions to the 2021 policy "may have led to disruptions."

Patel also said the company was "substantially decreasing the percentage of funds we currently hold in reserve" for "the vast majority of sellers," with changes expected "in the coming days." That didn't do much to ease the tension, with several sellers complaining about the vagueness of the statement, per the BBC. "This announcement is nothing more than that—words," one wrote in response, per Quartz. "They've ruined thousands of lives and made interest for themselves on other people's money they've been holding on to. (It's) all unethical and evil." In response, the UK's Small Business Commissioner Liz Barclay said she'd asked the company to explain "the level of the reduction in reserves [sellers] might expect and when this will happen," per the BBC.

Minister for Enterprise, Markets and Small Businesses Kevin Hollinrake also reached out to the company, warning that its policies should not "jeopardize the livelihood of reputable and otherwise viable small businesses." Until they're happy with the communication from Etsy, some sellers have vowed to put their shops in "holiday mode," meaning items up for sale are unavailable to buyers, as part of the "Etsy Reserve Strike." A Facebook group about the strike counted 1,100 members as of Wednesday, per the BBC. (Another protest erupted last year over Etsy's increase in seller fees.)

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