Etsy To Decrease Vendors’ Funds Held In Reserve After UK Boycotts The Shopping Platform


UK (Parliament Politic Magazine) – Etsy has announced that it will significantly reduce the amount of funds held in reserve for sellers worldwide, following a boycott by UK vendors due to delayed payments. Many sellers have chosen to put their Etsy shops on “holiday mode” and switch to alternative platforms such as Folksy, Shopify, and Facebook Marketplace.

 This decision comes after Etsy implemented a reserve system in late May, withholding up to 75% of sellers’ earnings for a minimum of 45 days. With Etsy’s fees deducted from the remaining 25%, small businesses have struggled to maintain cash flow for themselves and their suppliers.

Sellers Have Expressed Frustration 

Sellers have expressed frustration over the lack of transparency regarding the placement of their funds on reserve. Inquiries have been met with automated responses that often do not address their specific concerns. In response to these complaints, the UK government’s small business minister, Kevin Hollinrake, sent a letter to Etsy expressing his concerns and seeking clarification on how the marketplace plans to address the issue.

Chirag Patel, the head of payments and risk at Etsy, addressed the situation in a blog post on the company’s community site. He acknowledged the disruptions caused by the reserve system and stated that Etsy is working to make the scheme more dynamic. This includes reducing the amount held in reserve globally, as well as improving communication with sellers.

Protests Against Etsy Reserve Measures 


Daniel Vass, a seller of handmade furniture on Etsy operating under the name Cutting Edge Creations, has been actively participating in protests against the reserve measures implemented by Etsy. Vass expressed his frustration, stating that Etsy is still withholding approximately £6,000 of his income without providing a clear reason for the delay, despite numerous exchanges with the group’s help system. From a £250 order, Vass only receives a little over £5 immediately.

Vass revealed that he has been declining new orders due to financial difficulties in purchasing supplies, and if Etsy does not release the funds soon, he will be forced to shut down his business. Switching to alternative platforms at short notice is not a viable option for him. He explained, “I can no longer sustain my business. Those other sites won’t save me as it would take too long to rebuild my business there.”

Sellers Worldwide Have Been Affected 

Etsy claims that, on average, funds held in reserve for most orders become available within two weeks of the order date. They also state that less than 2% of active sellers currently have a reserve on their account. According to Etsy, for 70% of these sellers, the funds on hold are worth less than $50 (£39). However, sellers argue that this means approximately 140,000 sellers worldwide could have been affected, with the system withholding around $7 million in cash in Etsy’s account.

Liz Barclay, the UK’s small business commissioner, who has addressed the issue with Etsy following a surge in complaints, expressed her disappointment, saying, “Two weeks ago, Etsy promised us a direct route to refer sellers seeking help. We are still waiting for these promised communication improvements, while our talented and essential small and micro businesses are suffering.”

Read More: Studex To Grow Their Business By Taking Part In UK Jewellery Festival Trade Event

The Held Funds Of The Sellers Reduced By Half 


The majority of sellers who have set a reserve price will have their held funds reduced by at least half, according to Etsy. The company stated that, based on current data, the most common reserve level is expected to be 30%.

Following extensive media coverage, numerous sellers reported are being released from the reserve system overnight. However, many remain skeptical about the long-term impact, speculating that Etsy made the adjustment in anticipation of releasing their quarterly trading figures on Wednesday night. As a result, some sellers have permanently closed their Etsy stores.

Expressing their disappointment, one seller shared on the Etsy Reserve Strike Facebook page, “My trust has been shattered. I have a Folksy shop that I don’t use, so I will be moving there. I also utilize eBay and [Facebook] Marketplace.” Another seller suggested that Etsy was only making changes due to the negative response in the UK, stating, “They have lost my business as a customer.”

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.