Etsy Updates Sellers on Last Week’s Billing Glitch

Reports came flooding in on Friday, February 15, about Etsy taking funds from some sellers’ bank accounts and charging their credit cards for hundreds, even thousands of dollars. Etsy updated sellers on a thread on its discussion boards, and a week later, it posted an announcement providing users with more information about what happened.

As we posted in the AuctionBytes Blog post from the 15th, Etsy took money from sellers’ credit cards or bank accounts that they didn’t owe the company, and as we reported in an update on the 16th, some sellers who were supposed to receive disbursements on Friday didn’t get them.

Yesterday, February 22, the head of payments at Etsy Morgan Blake posted an announcement that shed more light on the incident – here’s an excerpt:

On Friday afternoon, we made an update to our billing system. Unfortunately, the update contained an error. While we were able to reverse the error in the update within a matter of minutes, the error ultimately led to three things happening:

• A small group of sellers (approximately 0.1% of total active sellers) had incorrect charges go through to their payment card on file. Within hours, we initiated refunds to incorrectly charged cards.
• An even smaller group of sellers had incorrect charges that were attempted, but declined by the card issuer.
• We then reversed deposits scheduled for Friday and rescheduled them for Tuesday, February 19. This included deposits for sellers affected by incorrect card charges as well as those not affected.

For sellers who may have missed our coverage, we immediately reported on the incident on the AuctionBytes Blog on February 15, and followed up a day later with an update in Newsflash. Both articles were included in Monday’s Newsflash email. We followed up with Etsy on Thursday and filed an update in the wee hours of Friday morning.

Thank to the sellers who reached out to us to let us know about the incident and kept us informed throughout.

The AuctionBytes Blog post remains open to comments – let us know if the incident impacted you and if it’s been resolved to your satisfaction.

Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.