Etsy Payments Glitch empties seller’s bank accounts over holiday weekend

By Chris Dawson February 16, 2019 - 12:32 pm

Sellers have reported an Etsy payments glitch over the weekend which led to Etsy mistakenly debiting sellers’ bank accounts for 100s and in some cases 1000s of dollars.

In some cases this Etsy payments glitch has wiped out seller’s balances and there are reports of banks cancelling customer cards, perhaps flagging the transactions as unusual. Depending on the seller’s auto-billing payment method, credit and debit cards, or bank accounts may have gone overdrawn or start attracting interest charges.

“Charged over $12,000 to my credit card! Card has now been de-activated due to suspicion of fraud! What is going on”
– Etsy Seller

The Etsy payments glitch situation is exacerbated as much of the US has shut down for a three day weekend to celebrate Presidents Day a federal holiday which this year falls today, the 18th of February, meaning that customers can’t get to their banks before Tuesday.

There appears to be mass confusion over how Etsy are rectifying the issues. Sellers would prefer that Etsy simply reverse the transactions, but there are reports that having charged by card refunds are being posted to Etsy seller’s payment accounts. It has also been suggested that rather than simply reverse charges, Etsy are refunding by making a payment to seller’s bank or credit card accounts which will take several days to clear.

As is always the case when a marketplace screws their sellers, there are a ton of conspiracy theories. Some are suggesting that Etsy timed it for the weekend Federal employees get paid. Others that Etsy purposefully picked this weekend so that they could borrow some cash for free over a three day weekend. In reality sellers suggesting conspiracy are giving Etsy far too much credit – we’ve yet to come across a marketplace glitch like this where it wasn’t a simple mistake – someone programmed the computer incorrectly, got a formula wrong, ran a test in real time by mistake, or simply pressed the wrong button is much more likely.

“We’re aware of a bill payment error affecting a small group of sellers which resulted in some cards being incorrectly charged. We don’t expect this error to impact additional sellers going forward.

For affected sellers, we’re very sorry for the trouble or concern this may have caused and we are currently working to make things right. We’ll update the impacted sellers directly as we have more information.

Thank you”
– Etsy

This latest Etsy Payments Glitch follows billing issues with the new Etsy Payments powered by Adyen with Etsy sellers overcharged due to currency conversions.

16/2/19 10pm Edited to add:

Etsy have issued an update for affected sellers:

“On Friday, February 15, a bill payment error affected a small group of sellers which resulted in some cards being incorrectly charged. Sellers who were affected have been notified by email, or by Etsy Conversations, and the issue that caused this has since been resolved.
As part of fixing this issue, all incorrectly charged cards have been refunded. It may take several business days for the refunded amounts to clear and settle in card accounts. Also related to fixing the root problem, some sellers saw their scheduled deposit of funds returned to Etsy on Friday, February 15, and those deposits will now be sent on Tuesday, February 19.
For affected sellers, we are very sorry for the trouble or concern this may have caused. Our first priority has been to correct the issue. This was not a fraud issue, but instead an error related to a site change which affects a small group of sellers and is unrelated to buyers’ purchases.
This is an issue we do not take lightly. We’ve assembled a Payments task force, including senior executives across Etsy, to address any concerns or troubles resulting from this error. We will refund any undue fees associated with this incorrect charge and change in deposit schedule. We don’t expect this error to impact additional sellers going forward.”

– Etsy

  • Bob Smitot
    2 years ago

    Looks like everyone affected might want to consider Class Action status for fraudulent activities against Etsy.

    • 2 years ago

      There’s a difference between fraud and a massive cock up

    • Jay
      2 years ago

      Oh that scentence Chris is grossly unfinished. Literally crying on the floor laughing at the possibilities!

  • 2 years ago

    “Massive cock up” would be solved by Etsy canceling the transactions on credit or debit cards….they are are “refunding” through payment accounts which will mess with profit statements, taxes and require people wait days to get the money back. That sounds more like fraud.

    I like how they say a “small number” is affected, yet they can’t seem to handle fixing it in a timely manner.

  • KK
    2 years ago

    A bigger problem is the bank fees these sellers have accumulated because of this. Is etsy clearing those as well? Word is in Facebook crafting groups that shiiine were charged up to 15,000 dollars. I believe this is rock bottom for etsy as a selling platform.

  • Toby
    2 years ago

    I’m sure they have something in the t&cs saying that they are not liable for any costs caused by their complete balls ups……. meanwhile inncoent customers will be hit with charges, not having any money to pay bills and all that jazz…
    Oh, and why is it always a ‘small amount of people’ affected when these things happen?!

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