Major Funds Withdrawn from Sellers on Etsy; Refunds Now Being Issued


The Etsy website is a forum that has made it possible for many independent small business owners to flourish online, offering creative and homemade products that customers can find. However, a so-called “glitch” in their platform caused money to be withdrawn from the payment cards of some sellers over the weekend.

In an internal post from Etsy’s support team, the platform confirmed that the problem had been resolved, saying that a technical error caused the issues, which will be returned to the accounts. To make matters worse, the federal holiday over the weekend has delayed the refunds even further.

The withdrawals happened in a range of amounts, with some seeing thousands of dollars deducted, and others seeing hundreds of dollars charged to their accounts. After the initial post from the support team, the company appears to be completely quiet on social media, refusing to reply to any of the angry and frustrated users of the online marketplace.

With these accounting problems arising for a mainstream selling website, which could easily be an error, an exit scam, or a hacking, this is an example of the role that internet platforms play as the middleman. In the years before now, these platforms were the center of commerce and communication that was lauded by the public.

Bitcoin and other cryptocurrencies have an advantage here, considering that their senders have to explicitly give consent to make a payment, considering its push payment system. A pull system includes bank transfers and credit card payments, which is great for automatic charges, but there is a greater risk of misuse.

This downfall is perfectly exemplified within the Etsy debacle.

No matter what the cause of the withdrawal was, these false withdrawals are damaging and wrong. With many users losing their savings over the matter of a weekend, and sellers remaining exposed without access to the money they earned.

Perhaps users will consider their own storefront with the use of Bitcoin or another cryptocurrency in the future, where their wallets cannot be randomly withdrawn from.

2/22 Update From Etsy on the Matter:

The error caused a small number of sellers to have incorrect charges applied to their payment card on file. Etsy issued a refund to all incorrectly charged cards.

The error caused a small number of sellers to have incorrect charges applied to their payment card on file. Etsy issued a refund to all incorrectly charged cards. Additionally, in order to ensure all sellers, including those who did not have incorrect charges to their card,  received correct disbursements, we also reversed disbursements scheduled for Friday and rescheduled them for Tuesday, 2/19/19. We notified all sellers who would have a delayed disbursement of this updated timing.

We communicated directly with sellers who were impacted by this error, and we also provided an update in our forums.  We clearly stated, “As part of fixing this issue, all incorrectly charged cards have been refunded. It may take several business days for the refunded amounts to clear and settle in card accounts.”

In order to ensure all sellers, including those who did not have incorrect charges to their card, received correct disbursements, we also reversed disbursements scheduled for Friday and rescheduled them for Tuesday, 2/19/19. We notified all sellers who would have a delayed disbursement of this updated timing.

Etsy issued a refund to all incorrectly charged cards.  As explained in our communications, when sellers' cards were incorrectly charged, an incorrect balance was also reflected in their Etsy payment accounts. Once we refunded the incorrectly charged cards, we then also adjusted the Etsy payment account balances accordingly.

Etsy has now posted an update on their internal forum which can be read here.

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