Online marketplace Etsy which provides an outlet for small independent craft producers has been slammed for retaining payments to the producers it profits from. The business has begun to withhold payment of as much as 75 per cent of seller sales revenues for 45 days as part of a ‘reserve system’ to cover itself for refunds in the event of customer dissatisfaction. This is causing many of its vendors severe financial difficulty, left unable to fund purchases of raw materials to continue producing products.
Etsy appears to have literally shot itself in the foot through this heavy-handed action as an Etsy Reserve Strike group on Facebook is gathering momentum with many threatening to migrate to other platforms. It is also drawing widespread negative media coverage which will not only put off prospective vendors but the customers of the site as they learn of its poor treatment of sellers.
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