Etsy, the global online marketplace used by millions, is facing claims from sellers it has been withholding thousands of pounds from small businesses by imposing reserves on accounts that take 75% of sellers’ income for 45 days with no warning.
Sellers say the company is retaining their income with little care for how it will affect families in a cost of living crisis.
Pietra (her surname is not used for fear Etsy will shut her account), a Miami-based Etsy seller, told Sky News she has more than $20,000 (£15,463) held in two of her accounts in an enforced reserve that she is unable to access.
Image: Dan Vass from Aylesbury runs a furniture business through Etsy
Since 2015 she has designed wedding favours to sell on the platform full-time, balancing work with being a single mum.
Her business was taking in more than $30,000 (£23,195) per month in orders. From that total, once production and shipping costs are removed, she is left with $8,000 (£6,185) profit.
But after a reserve was placed on her account on May 18, she saw her income drop to just $444 (£343) in June.
“It’s insane that in a two-month period my whole life went to hell because of this,” she said. “They’re holding $20,000 (£15,000) of mine, and I basically can’t buy food.
“I’ve just reached two months of my rent being late and I’ve maxed out two credit cards, one for $5,000 (£3,800) the other for $6,000 (£4,600). It’s been close to impossible to get out of bed.”
Image: Mr Vass says his business was going from strength to strength until a reserve was imposed on his account
‘We haven’t been able to pay bills’
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Dan Vass, from Aylesbury in Buckinghamshire, runs a furniture business through Etsy which was going from strength to strength until a reserve was imposed on his account on June 14 without any warning.
“We currently have over £5,000 in reserve and it just seems to keep growing. We haven’t been able to pay bills and this is our only source of income.
“There have been times this month when we literally do not know how we can keep the business going and our family fed because the items take a long time to make, have high material costs and Etsy are holding all of our funds, so we can’t actually begin to make them when orders come in.”
Image: Mr Vass says he has around £5,000 in reserve with Etsy
‘I’ve had to retrain’
Anthony Whitworth, from Tadcaster in North Yorkshire, owns Etsy shop The Bizzy Box and is ranked in the UK’s top three Etsy sellers.
He’s been running a thriving business for seven years through the online marketplace which has enabled him to make a good living whilst supporting his wife who has Multiple Sclerosis.
His business pays Etsy over £35,000 in fees per year and has a 5-star rating from more than 63,500 sales, but since May his account has been put into reserve swallowing his income.
“I’ve had to retrain as a locksmith just to make enough money to keep things ticking over since May and in case Etsy goes seriously downhill in the long run.”
‘Quite shocking’
The Small Business Commissioner Liz Barclay told Sky News that over the past few months she has received a rising number of complaints from small business owners that online platforms are holding their money in reserves for a longer period of time than they previously did.
“Up until now, we have been hearing of online platforms withholding smaller amounts of money. This is the first time I’ve heard 75% being withheld in reserves and that is quite shocking.”
Image: Etsy has a “purchase protection programme” which enables a customer to easily apply for a refund
“These small suppliers are the lifeblood and the talent that drives your business success. They need to be paid as quickly as possible or they may go to the wall.”
Ms Barclay said the government has no jurisdiction over online selling platforms such as Etsy, which are not UK companies.
She said the government is reviewing the tools it has to help small businesses get paid faster with a report expected to be published in Autumn.
An Etsy spokesperson said: “Etsy Purchase Protection is designed to protect both buyers and sellers as Etsy covers the cost of refunds for all eligible orders; since launching last year, we have received positive feedback around this program.
“And while we understand that payment reserves can cause short-term disruptions to a seller’s payment schedule, these temporary holds are common practice across marketplaces.”
‘I’m worried I’ll lose lots of sales’
Sky News understands Etsy began using payment reserves in 2021.
Reserves are not uncommon amongst seller platforms.
Sellers who have been on Amazon for over a year and have processed at least 100 orders will have 3% of their daily payments held in a reserve for the purpose of covering transaction disputes.
In comparison, Etsy sellers have shown evidence to Sky News that whilst in a “reserve”, 75% of the amount they receive from orders is unavailable to them for 45 days or until they have provided tracking proof.
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This means the money needed to pay for the product and ship it out is not received until after it is made and shipped.
A lot of sellers don’t want to force their customers to pay for tracked shipping because international tracking can rack up a huge cost.
Steen Ross, from Norwich, has £1,800 held in a reserve on her Etsy account.
She has sold custom costumes to a largely American customer base on Etsy for a decade and relies on her Etsy income to pay rent.
“Most of my sales go to America and about 90% of people don’t want to pay the additional cost of tracking because it’s so expensive, they are happy for me to just provide proof of postage.
“I’m worried that if I raise prices to include tracking, I’ll lose a lot of sales, but if I don’t Etsy won’t release funds from my reserve before 45 days.”
Etsy’s purchase protection programme
In June 2022, Etsy introduced a new “purchase protection programme” which enables a customer to easily apply for a refund if they claim their item is lost or stolen.
Since then, Pietra, Steen Ross and Dan Vass claim they have experienced no-challenge refunds, where funds appear to automatically leave their reserve when a claim is made.
These complaints have been echoed by hundreds of people online tweeting Etsy’s CEO John Silverman and a Facebook group ‘Etsy Reserve Strike’ has been set up in the last month to organise a strike amongst sellers.
Etsy has almost 90 million buyers worldwide and about 6 million sellers but last year, for the first time since 2012, Etsy experienced a fall in its number of users and sellers.
Mr Silverman has dropped $24.4m (£18.7m) of his shares in the company since the beginning of February.
As of 10 July, Etsy’s share price sat at $85.83 (£65.56) compared to the all-time high share price of $297 in 2021.
NHS funding could be linked to patient feedback under new plans, with poorly performing services that “don’t listen” penalised with less money.
As part of the “10 Year Health Plan” to be unveiled next week, a new scheme will be trialled that will see patients asked to rate the service they received – and if they feel it should get a funding boost or not.
It will be introduced first for services that have a track record of very poor performance and where there is evidence of patients “not being listened to”, the government said.
This will create a “powerful incentive for services to listen to feedback and improve patients’ experience”, it added.
Sky News understands that it will not mean bonuses or pay increases for the best performing staff.
NHS payment mechanisms will also be reformed to reward services that keep patients out of hospital as part of a new ‘Year of Care Payments’ initiative and the government’s wider plan for change.
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Speaking to The Times, chief executive of the NHS Confederation Matthew Taylor expressed concerns about the trial.
He told the newspaper: “Patient experience is determined by far more than their individual interaction with the clinician and so, unless this is very carefully designed and evaluated, there is a risk that providers could be penalised for more systemic issues, such as constraints around staffing or estates, that are beyond their immediate control to fix.”
He said that NHS leaders would be keen to “understand more about the proposal”, because elements were “concerning”.
Health Secretary Wes Streeting said: “We will reward great patient care, so patient experience and clinical excellence are met with extra cash. These reforms are key to keeping people healthy and out of hospital, and to making the NHS sustainable for the long-term as part of the Plan for Change.”
In the raft of announcements in the 10 Year Health Plan, the government has said 201 bodies responsible for overseeing and running parts of the NHS in England – known as quangos – will be scrapped.
These include Healthwatch England, set up in 2012 to speak out on behalf of NHS and social care patients, the National Guardian’s Office, created in 2015 to support NHS whistleblowers, and the Health Services Safety Investigations Body (HSSIB).
The head of the Royal College of Nursing described the move as “so unsafe for patients right now”.
Professor Nicola Ranger said: “Today, in hospitals across the NHS, we know one nurse can be left caring for 10, 15 or more patients at a time. It’s not safe. It’s not effective. And it’s not acceptable.
“For these proposed changes to be effective, government must take ownership of the real issue, the staffing crisis on our wards, and not just shuffle people into new roles. Protecting patients has to be the priority and not just a drive for efficiency.”
Elsewhere, the new head of NHS England Sir Jim Mackey said key parts of the NHS appear “built to keep the public away because it’s an inconvenience”.
“We’ve made it really hard, and we’ve probably all been on the end of it,” he told the Daily Telegraph.
“The ward clerk only works nine to five, or they’re busy doing other stuff; the GP practice scrambles every morning.”
A haul of cocaine worth nearly £100m has been seized at a UK port, authorities say.
The haul, weighing 2.4 tonnes, was found under containers on a ship arriving from Panama at London Gateway port in Thurrock, Essex.
It had been detected earlier this year after an intelligence-led operation but was intercepted as it arrived in the UK this week.
With the help of the port operator, 37 large containers were moved to uncover the drugs, worth an estimated £96m.
The haul is the sixth-largest cocaine seizure in UK history, according to Border Force.
Its maritime director Charlie Eastaugh said: “This seizure – one of the largest of its kind – is just one example of how dedicated Border Force maritime officers remain one step ahead of the criminal gangs who threaten our security.
“Our message to these criminals is clear – more than ever before, we are using intelligence and international law enforcement cooperation to disrupt and dismantle your operations.”
Container ships are one of the main ways international gangs smuggle Class A drugs into the UK, Mr Eastaugh said.
Cocaine deaths in England and Wales increased by 31% between 2022 and 2023, according to the latest Home Office data.
Elsewhere this weekend, a separate haul of 170 kilos of ketamine, 4,000 MDMA pills, and 20 firearms were found on a lorry at Dover Port in Kent.
Image: One of the 20 firearms found at Dover Port. Pic: NCA
Experts estimate the ketamine’s street value to be £4.5m, with the MDMA worth at least £40,000.
The driver of the lorry, a 34-year-old Tajikistan national, was arrested at the scene on suspicion of smuggling the items, the National Crime Agency said.
Sir Keir Starmer has said fixing the UK’s welfare system is a “moral imperative” after the government’s U-turn.
The prime minister faced a significant rebellion over plans to cut sickness and disability benefits as part of a package he said would shave £5bn off the welfare bill and get more people into work.
The government has since offered concessions ahead of a vote in the Commons on Tuesday, including exempting existing Personal Independence Payment claimants (PIP) from the stricter new criteria, while the universal credit health top-up will only be cut and frozen for new applications.
Speaking at Welsh Labour’s annual conference in Llandudno, North Wales, on Saturday, Sir Keir said: “Everyone agrees that our welfare system is broken, failing people every day.
“Fixing it is a moral imperative, but we need to do it in a Labour way, conference, and we will.”
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Sir Keir also warned of a “backroom stitch up” between the Conservatives, Reform UK and Plaid Cymru ahead of next year’s Senedd elections.
He said such a deal would mark a “return to the chaos and division of the last decade”.
But opposition parties have hit back at the prime minister’s “imaginary coalitions”, with Plaid Cymru accusing Labour of “scraping the barrel”.
Reform UK said the NHS “isn’t safe in Labour’s hands” and people are “left waiting in pain” while ministers “make excuses”.
Voters in Wales will head to the polls next May and recent polls suggest Labour are in third place, behind Reform and Plaid.
Labour have been the largest party at every Senedd election since devolution began in 1999.
Conservative Party leader Kemi Badenoch has not ruled out making deals with Plaid Cymru or Reform at the Senedd election.
At the conference, the prime minister was joined on stage by Wales Secretary Jo Stevens, First Minister Eluned Morgan and deputy leader of Welsh Labour Carolyn Harries.
He described Baroness Morgan as a “fierce champion for Wales” and “the best person to lead Wales into the future”.
Sir Keir said the £80m transition board to support Port Talbot steelworkers after the closure of the plant’s blast furnaces was a result of “two Labour governments working together for the people of Wales”.
He described Nigel Farage as a “wolf in Wall Street clothing” who has “no idea what he’s talking about” on the issue.
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