Etsy faces growing calls to boycott its services after withholding sellers' money

Online marketplace Etsy is facing growing calls for sellers to boycott the site for withholding their money.

A reserve system meant some sellers had 75% of their takings frozen for 45 days, leaving them struggling to trade.

Furniture seller Stephen James is one of the hundreds who have joined social media groups calling for other sellers to come off the platform in protest.

It is not clear how many would join in any boycott. Etsy said it would continue to review its reserve system.

It added that it took seller feedback seriously and that payment reserves were used to "keep the marketplace safe" and cover any potential refunds.

Small Business Commissioner Liz Barclay told the BBC her team were receiving a rising number of complaints about Etsy.

They had also noticed a growing number of people joining social media groups to discuss a strike or boycott.

On Facebook, the Etsy Reserve Strike group has more than 800 members and many are sharing tips on moving to other online platforms to sell their goods.

On Reddit, a thread known as a sub-Reddit, has been set up called r/EtsyStrike. The online group Not on Amazon has also become a place where Etsy sellers are airing their complaints.

A strike or boycott of Etsy would mean a seller would put their store on holiday mode, effectively stopping people from buying from them.

It is not clear how many people in these social media groups are sellers and how many of them would join a strike.

But with just under a million users in the UK, a boycott could dent the amount of commission and fees which Etsy received from each sale.

Stephen James, 52, from Shropshire, said he would join any Etsy sellers strike or boycott after saying the reserve system left his furniture business with "only two planks of wood".

He said he was unable to buy any more material after a reserve led to £3,000 of his takings being withheld.

Stephen said the reserve hit "out of the blue", just when he was scaling up his business. He now only has two members of staff, instead of three.

When the reserve began, Stephen wrote to his buyers explaining what was happening. He said some buyers were "disgusted" by Etsy's approach, and cancelled their orders on his Etsy store.

Stephen is now building his own website to sell his furniture.

Julia Aufenast, 50, has been selling semi-precious gems on Etsy for 13 years and had a reserve imposed and removed without explanation.

"I have over 30,000 sales and really good feedback. Not only did they put my shop in reserve but they forced it into vacation mode," she said.

Ms Aufenast said she was able to continue trading online using her own website and PayPal account.

"But I did think about people who don't have that, and how on earth they manage to pay their bills let alone buy new supplies," she said.

Ms Aufenast stays in touch with other sellers on Facebook who are co-ordinating a boycott of the platform. She said she was prepared to stop selling on Etsy in protest but understands it would be painful for smaller sellers.

"There is nothing like Etsy and so it's not easy to find some other marketplace to sell with," she said.

Small Business Commissioner Ms Barclay told the BBC Radio 5 Live's Wake Up To Money show she found the situation "really concerning".

"In some cases people are saying: 'we can't afford to feed the kids over the weekend'," she said.

"A lot of people set up in the pandemic and Etsy is their only source of income," she added. "Women, ethnic minority and neurodiverse people found that Etsy's way of working really fits them and their lifestyle - they are going to find it really difficult to carry on."

Ms Barclay added that she had heard of many cases of sellers' takings being held on reserve from outside of the UK too.

She said sellers have told her there were increasing calls for them to take a united stand against Etsy.

"There are all sorts of groups being set up," she said. "There's the Etsy strike group which had 740 members by Friday afternoon. There all sorts of groups arising and a lot are saying 'I've been a seller for years, I'm no risk'. In some cases, sellers will have money held until October."

Other, smaller platforms such as OneFayre and Mayfli are now being sought out by sellers as an alternative.

A spokesperson said: "The vast majority of sellers receive their funds when they make a sale rather than having to wait until the buyer receives the item, like they might with other selling platforms."

They added: "As always, we will continue to iterate and improve upon our programs, including payment reserves, in order to support our sellers."

The BBC understands Etsy is in talks with the UK government about the payment reserve system.