Changes to Etsy Policies: Effective February 2021

We’re making some updates to our policies that will go into effect on 23rd February, 2021. 

  • Because of the millions of new buyers who have recently discovered Etsy, some sellers are seeing an increase in customer issues. To keep the Etsy marketplace safe and easy for everyone, we’re introducing Payment account reserves for some sellers that have recently made their first sale on Etsy.
  • We’ve added information about following local tax laws and providing Etsy with certain tax information to our Etsy Payments Policy, and clarified that Etsy may take action against your shop if you’re not adhering to those requirements. This only applies to certain markets, so you’ll receive additional info if these changes affect your shop.
  • We also made some minor changes to the Fees & Payments Policy and our Terms of Use.

You’ll also receive an email from Etsy about these changes. Learn more about Etsy’s policies.

If you have feedback about Payment account reserves, please take our survey. 

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Why reserve funds? 

We aim to make buying and selling on Etsy safe and easy for everyone. A reserve means we’ll set aside a percentage of some sellers’ earnings on an order for 45 days just in case there’s an issue with the order.

Many online platforms use reserves. Reserves help to keep your balance from going into the negative if you receive a chargeback from a customer’s credit card company, or any other unexpected charges.

Who will have a reserve placed on their account?

Sellers may have a reserve placed on their account for a short period after they make their first sale on Etsy, if their earnings are above a certain threshold.

We expect that fewer than 1% of Etsy sellers will be affected by a reserve for now. If you  have a reserve put on your Payment account, we’ll send you an email and messages in your Shop Manager to let you know.

How will this impact my Payment account funds?

If you have a reserve placed on your account, we will hold a percentage of sale funds from each order. These reserve funds are held in your Payment account, and not available to be deposited into your bank account for a period of time. Your reserve balance can be used to cover your expenses and charges such as fees and refunds. 

Any reserve funds not used for your refunds, chargebacks, or expenses will be available for deposit after the reserve period.

How can I keep my shop in good standing?

Providing great customer service and clearly communicating with buyers can help prevent cases from being opened against your shop. 

Following these best practices can also help you get your funds earlier: 

  • Respond to customers quickly – within 24 hours if you can. 
  • Dispatch on time and adjust your processing times if needed. 
  • If you dispatch your packages without using postage labels purchased on Etsy, remember not to mark items as dispatched before they're dropped off with your carrier.
  • Include tracking info when you dispatch a package. When you add tracking we may be able to release funds in reserve earlier

In the event that your buyer alerts you of an order issue or your buyer files a dispute, we also recommend that you quickly address and resolve buyer disputes in your shop. 

Learn more about providing great customer service.

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