Etsy accused of 'destroying' sellers by withholding money

https://www.bbc.co.uk/news/business-66201042

by aligray • 3 years ago

64 43 3 years ago

bbc.co.uk

rightbyte2• 3 years ago

This is the problem with all these middlemen platforms. If you base your business around them you are at their mercy.

Agreed. I actually thought about it a lot lately mostly because I occasionally sell stuff on Ebay and the fees make me extra annoyed each time. Running a big enough market itself is a difficult task ( and if you want to sell in the entire US, this is effectively what you do ). Add to this taxes, refunds, fraud mitigation and all of a sudden you realize it is a big ask.

Still, I keep thinking about it, because I am sure it can be done in a way that does not make me want to start a new online marketplace each time..

derbOac• 3 years ago

I agree with you but also feel there should be enough competition in these services that a vendor can switch without undue cost if they feel wronged.

I sort of feel as if we're collectively deluding ourselves about the extent and number of monopolies in our current economy.

rightbyte2• 3 years ago

I think Etsy brings in the customers too. It is like a YouTube channel, right? Etsy have control over the consumer relations you build up.

I.e.much more screwing possibility than say Shopify or PayPal.

lockhouse• 3 years ago

I agree with you to a point, but what’s the alternative?

Running your own storefront online is a huge undertaking, even more so if you want to accept international orders. Processing payments securely while also properly accounting for things like taxes, customs, and other laws is a huge undertaking.

This is just not something that would be realistic for most of the people on sites like Etsy to implement properly.

arp2422• 3 years ago

Ideally there should be a few storefronts you can viably choose from as a provider of goods or services.

For example, I can walk to a Tesco, Lidl, Aldi, SuperValu, and Spar from where I live, there are a bunch of clothing shops relatively close, phone shops, off-licenses, computer shops, etc. etc. And all that in a town of ~25,000 people.

It's kind of unusual that for a lot of online stuff there's so little choice, especially from the seller's perspective: it's "Etsy or bust" (or "Amazon or bust", "YouTube or bust", "Android or bust", etc.)

JohnFen• 3 years ago

Indeed. I view the risk as being unacceptable. If I had the choice of having to use these services or not go into business, I'd certainly opt for not going into business.

Other people's risk tolerances are different, of course, but I really hope everyone that does business with these companies understands that they are taking risk in doing so.

pengaru• 3 years ago

Unless you're doing strictly cash transactions or bartering, there's always a middle-man of some kind who can create friction at will.

https://www.forbes.com/sites/dariosabaghi/2023/07/27/masterc...

custom-pros• 3 years ago

Adyen provides payment services for Etsy, and it is highly likely that Adyen charges for storing the deposit.

NoZebra120vClip3• 3 years ago

Etsy partners with Worldpay, PayPal, Adyen, and other licensed payment providers to facilitate card payments and other payments and the disbursement of funds to sellers. The provider and processing time for your payment will vary based on the country in which you're located.

Adyen is a Dutch bank of some sort. PayPal, however, is definitely not a bank, and so the rules around their storage of funds are more obscure.

justinclift2• 3 years ago

Etsy told her it "isn't able to give... [a] specific reason"

Sounds like it's probably some newly implemented "black box" (either AI or external vendor) solution that can't be probed or debugged. :(

MertsA• 3 years ago

That's pretty standard for any sort of fraud prevention. You never tell people what triggered it because when it's not a false positive you're telling scammers what to avoid next time.

justinclift2• 3 years ago

Yeah, that gets repeated a lot as if it's acceptable.

Pity about the whole "destroys legit businesses" result that entails. :(

Because who needs customers right? /s

_aavaa_2• 3 years ago

Ahh yes, the old security through obscurity.

Georgelemental• 3 years ago

"The accused shall enjoy the right … to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him …"

65102• 3 years ago

The interesting part there is the seamless transition from seller/people to scammer. I believe the policy will eventually have to change to accommodate innocence until proven guilty.

There are some pretty dramatic stories out there with people getting unusual amounts of orders forcing them to buy unusual amounts of materials and do unusual amounts of work which creates an unusually full agenda and may drain finances to the edge... and then they don't get their money or the orders are refunded after delivery and they don't get proper assistance resolving the issue. "We wont tell you what you've done wrong because of reasons" is really the stuff you want to hear at that moment.

Not sure what the solution should be but I wouldn't want a role in that movie.

What is the problem usually? We don't know? How do you fix an unknown problem? If it is that someone is selling an unusually large amount it seems doable to limit the number of widgets they may sell in stead of platforms taking more orders they know cant be resolved.

tjpnz• 3 years ago

That's a tired and frankly ignorant excuse. An experienced fraudster will in most cases know full well what happened, and if they don't it won't take them long to put together some theories and test them. The "no reason" routine is to shelter the company from legal liability.

sleepytimetea2• 3 years ago

Yup.. sounds like they implemented some AI system that misclassified the stores and it is highly likely that they don't even know what the model weights mean or how the model got mistrained.

toss1• 3 years ago

Maybe, and Hanlon's Razor say's your right ('don't attribute malice where incompetence can explain it').

But it seems here mor like Hanlon's Razor is a handy cover for the fact that interest rates are up, which makes it more enticing for Etsy management to steal their sellers' funds and rake off the interest yield under a flimsy and obscure excuse.

Sure, it's only £800 here and £7000 there, but do it a few 10,000 times, and it'll yield material-to-the-bottom-line cash, and nevermind that it hurts the victims more than it benefits them.

IOW, it is just corporate theft because they can get away with it.

raincom2• 3 years ago

Use "blackbox" to avoid any responsibility. This is how c-level executives have layers and layers of people to do the dirty work to not get prosecuted. Now replace 'layers of people' with software/ai/machine learning, etc. This is how financial institutions are debanking people in the name of de-risking (read how politicians and small businesses are being debanked in UK--maybe, banks should debank techocrats) This is how the West will delegate their authoritarian ways to third parties (private entities: banks, utilities, fintech, search providers, mail providers, ring central), while at the same time blaming the third world dictatorships for not upholding western-values such as freedom, democracy, etc.

cyanydeez• 3 years ago

If we could rid ourselves in America of republican fascism, we could focus on the business end of that.

sleepytimetea2• 3 years ago

Would Shopify custom shopfronts be the alternative to using Etsy ? Will custom shopfronts be searchable via Google or Pinterest - how do they submit them for indexing ?

Nmi2osv7• 3 years ago

not "the" alternative but yes they are competitors

pcdoodle• 3 years ago

Can confirm, shopify will rank in searches but typically if you also sell on these other platforms, the majority of the traffic goes to them.

Recently lost amazon due to hoop jumping lockout, sales down on a certain product 80% but that's better than losing 100%. My main complaint is amazon won't let you sell your product cheaper on your own website.

LanternLight83• 3 years ago

Maybe something like https://artisans.coop will be able to take off.

arp2422• 3 years ago

The big advantage of a platform like Etsy is just discoverability: it's like walking into a store and browsing to see what they have. Everything I bought from Etsy was by "browsing" like this.

It's the same as YouTube in this regard. Sure, you can set up "https://sleepytimetea.video" and start posting videos, but attracting an audience will be so much harder, and it was never easy in the first place. This kind of thing only really works for people who already have an audience.

SenAnder• 3 years ago

Such things will always happen when the difference in power is too great. Either organize (politically, economically, or both), or suffer.

Right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must.

reneberlin• 3 years ago

And what does that last sentence mean?

"The BBC understands that a representative of Etsy has met with UK government officials."

mst• 3 years ago

It almost certainly means that (some part of) the government delivered a polite but mildly menacing "what the fuck?" message and Etsy sent somebody with a suitably fancy sounding title over to reassure them.

villgax• 3 years ago

Stripe is of a similar trajectory

handmadeta• 3 years ago

My fiancee has a handmade women's and children's cloth business here in Germany where I help out with IT, software, customer support and back office. We are affected by this as Etsy is currently holding about 4000 of our Euros. I am glad we are not totally dependent on Etsy (and on this business) because otherwise it might well wreck us financially.

I would say that our account is a good citizen. We have been on Etsy for two years fullfilling over 1200 orders and garnering a 5 star ratings from hundreds of reviews. In all the time we operated we had a single, unjustified case against us that was quickly withdrawn by the counterparty. Not a single Etsy order was lost during shipping, and we have managed to maintain a positive account balance without any issues related to fees or refunds. Our return rate is also below the industry average for our niche.

Now, we are not perfect. Often we run over the promised delivery date by a few days simply because we get swamped with orders. We also don't ship single items with tracking. Rather we send it as a German Post "Big Letter" which is quite reliable and has the benefit that people can receive it in their mailboxes and don't have to sign for it. This works quite well and is "the way" that we handmade / second hand people usually send around stuff.

This lack of tracking is, I think, the crux of this whole matter. Etsy really wants sellers to add tracking and it states in the "reserve" that you can get your money at once if you just add valid tracking.

To me this leaves a bad taste. I really resent being "nudged" by platforms like this especially if there isn't even a problem. The fact that they can simply change the rules out from under you is also disconcerting. The first time we noticed that this was even happening was when they already had withheld 2000€ (1). The worst thing about it is that we raised a support request for this, for which you have to jump through really stupid hoops, and have not even heard back from them in weeks. Not even a boilerplate response. This is really a scary prospect, to have your income be at the mercy of literally a faceless entity that'll happily take your fees but CBA to connect you with a real person when you run into trouble.

I also want to mention that I think a "reserve" is generally reasonable. But it's not really reasonable to hold 75% over 45 days. I think if it was 25% for 15 days from shipping then, generally, seller would be able to handle it financially.

(1) I am necessarily not blaming Etsy here, we are all just very busy and I just expect for this stuff to keep working like it did.

Etsy accused of 'destroying' sellers by withholding money

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