Etsy sellers say a fraud protection program is destabilizing their businesses
VergeAPR 3 2023
Though the reasoning behind placing accounts on reserve is well-intended — as online marketplaces must take action to disincentivize fraudsters — Etsy's execution has been a complete disaster. It's unacceptable that longtime sellers in good standing are being forced to resort to savings and credit to keep their businesses afloat. Etsy cannot continue to hold back money without any explanation.
A lack of reputation and small processing volumes can prevent tiny businesses from being profitable, but Etsy makes this kind of artisanship a feasible full-time living. However, like many other payment aggregators, the platform has had to establish a reserve to deal with trust issues and minimize the risks associated with transactions involving small scale businesses. Those mulling about shutting an Etsy shop down because of a reserve should educate themselves on the reality of cash flow management.