Etsy will be “substantially decreasing” the amount of sellers’ funds held in its reserve globally after UK vendors began boycotting the marketplace over a hold-up in payments.
The U-turn comes after the BBC reported that some sellers had 75% of their money frozen for 45 days, although the business did not specify the new rate or time frame.
Sellers have been putting their Etsy shops in “holiday mode” and switching to rivals including Folksy, Shopify and Facebook Marketplace after the website began ramping up its reserve system from the end of May.
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Sellers like Dan, who sells made-to-order wood furniture on the site, said Etsy had £7,000 of his takings on hold, adding that the announcement “lacked detail”.
Etsy’s tension with sellers has sparked boycott calls and raised pressure on the company, which posted a decline in profits this week.
In the months April to June, its profits fell to $61.9m, down by 15% compared with the same time last year.
It also forecast lower revenue than expected in the next three months as it saw a “year-on-year decline” in its growth in the UK.
Etsy’s payment policy states the reasons for putting money on hold include a sudden increase in sales, a shop having only made its first sale recently, the shop committing a “policy violation” or “other risk factors”.
But some sellers told the BBC that two reserve periods were imposed on them consecutively.
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