Etsy Faces Backlash from Sellers Over Money Holding Policy.

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Online marketplace Etsy has come under scrutiny as sellers express frustration over the platform’s decision to put 75% of their earnings on hold for a period of 45 days. The move, known as the “reserve system,” has left hundreds of small businesses grappling with financial difficulties and uncertainty. Many sellers received an email notification about the implementation of the policy, which has led to significant financial constraints for some.

Sellers Struggle with Financial Constraints

Ceramics seller Rachel Collyer shared her distressing experience, with £899 of her money being held by Etsy. The withholding of funds has left her unable to afford essential materials for her business, potentially jeopardizing her livelihood. Similar complaints emerged from other sellers, with some facing consecutive reserve periods, making it difficult for them to operate their businesses smoothly.

Lack of Clarity and Transparency

Sellers like Dan, who offers made-to-order wood furniture on Etsy, expressed confusion as they were given no explanation for why their money was being held. The lack of clarity and the inability to have the reserve lifted during the 90-day period have left many sellers frustrated and struggling to maintain their businesses.

Growing Concerns and Seller Unrest

The situation has raised concerns among sellers, with some calling for a “strike” to protest Etsy’s actions. However, many sellers chose to remain anonymous due to fears of losing their shops on the platform. The Small Business Commissioner has also expressed concerns, noting an increasing number of complaints against the US-based firm.

Experts Weigh In

Online retail expert Martyn James criticized Etsy’s withholding of sellers’ money, expressing deep concern about the impact on small businesses. The Federation of Small Businesses emphasized the need for online platforms to handle sellers’ funds responsibly, considering their significant power over small businesses.

Etsy’s Response and Ongoing Discussions

An Etsy spokesperson defended the reserve system, stating that most sellers receive their funds promptly after a sale. However, the spokesperson did not address the growing concerns from sellers and the negative impact on their businesses. Etsy has met with UK government officials to discuss the situation.


Etsy’s decision to implement the reserve system has sparked unrest among sellers, who feel left in the dark about the reasons behind the money holding policy. As sellers face financial hardships and uncertainties, calls for greater transparency and responsible use of power by online platforms are growing louder. The future of the reserve system and its impact on small businesses remain topics of ongoing discussions and concerns.

SOURCE: Ref Image from Forbes

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