Online marketplace Etsy has come under fire from sellers for putting 75% of their takings on hold for 45 days.
Hundreds of small business owners got an email from Etsy notifying them it was actioning its “reserve system”.
Ceramics seller Rachel Collyer said Etsy was holding £899 of her money, which means she cannot afford to buy materials to keep producing.
Etsy said payment reserves were used to “keep the marketplace safe” and cover any potential refunds.
Ms Collyer has been selling ceramics on Etsy since 2021. She was given only a few hours’ notice before her money was put on reserve.
“This is ruining my business – I can’t afford to buy any clay or glazes. We might have to move house because I can’t pay any bills,” she said.
Etsy’s payment policy states the reasons for putting money on hold include a sudden increase in sales, a shop having only made its first sale recently, the shop committing a “policy violation” or “other risk factors”.
Some sellers told the BBC that two reserve periods were imposed on them consecutively.
Dan sells made-to-order wood furniture on the site and told the BBC he had no idea why his money was being held.
“Etsy are holding around £7,000 of my money, leaving us to use credit cards and family loans to try and keep our business running and keep food on the table,” said the 44-year-old from Buckinghamshire.
His partner Sam said: “There is no ability to have the reserve lifted within the 90 days, you must see out the full period. It’s destroyed my business.”
Joanna, who ran a bespoke underwear shop on Etsy, told the BBC she too could see no reason for her funds being withheld, and so suddenly.
“I have been selling [on Etsy] for four years,” she said. “I woke up to a communication… stating that my account has been put on a 90-day period of reserve whereby they will hold 75% of my sales.
“We have no cases against us, we have performed no malpractice in any way,” she said, adding that her account was not restored to normal even after following the site’s guidance on lifting the reserve.
The 62-year-old said she would have made £5,000 this month and cannot take out a loan while she waits for the money.
“I cancelled all my on-reserve orders and put my shop on vacation. I won’t trade with them. I can’t afford to,” she said.
And almost as suddenly as the reserve was implemented, it was lifted. She received no explanation for either decision.
