Etsy u-turn in row over withholding seller's money

Online marketplace Etsy has said it will change its reserve policy after sellers complained of money being held.

The u-turn comes after the BBC reported that some sellers had 75% of their money frozen for 45 days.

Etsy said it was "substantially decreasing" the amount of money it would put on hold but did not state the new rate or time frame.

Sellers like Dan, who said said Etsy had £7,000 of his takings on hold, said the announcement "lacked detail".

Small business commissioner Liz Barclay told the BBC that sellers were "very disappointed" that the statement from Etsy was unclear.

"I have asked Etsy to explain what we tell sellers about the level of the reduction in reserves they might expect and when this will happen," she said.

In an update issued to sellers from head of payment policy Chirag Patel, Etsy said it was addressing the "pain points" of the reserve system for sellers.

Part of the changes, the company said, include "improving communications" to new sellers who are in reserve.

Ms Barclay said she had asked Etsy if sellers would have a direct contact for referring their complaints regarding the reserve.

"We are getting very anxious about the possibility that while we wait for resolution of these issues talented and crucial small and micro businesses are going to the wall," said Ms Barclay told the BBC.

Minister for Enterprise, Markets and Small Businesses Kevin Hollinrake wrote to Etsy's chief executive Josh Silverman on Wednesday, asking for the company to address the issue after a "rising number of enquires and complaints" from sellers.

"It is critical that Etsy's approach does not jeopardise the livelihood of reputable and otherwise viable small businesses," Mr Hollinrake wrote in a letter seen by the BBC.