US media coverage of payment reserves today

[#1]

https://www.theverge.com/2023/7/29/23810536/etsy-sellers-payment-reserves-fraud-protection

Quote: "Less than 2 percent of shops currently have a payment reserve placed on their accounts, and for most of those shops, the amount being held is less than $50, says Chirag Patel, head of payments at Etsy"

Based on the most recent numbers of "active" shops on Etsy - 5.9 million - that means 60K to 120K shops on reserve right now. Since Etsy removed a bunch of reserves recently after the negative attention in the UK, that means the number was almost certainly much more than that in May and June.

[BlackberryDesigns]

@cindylouwho2    It certainly comes at a time of all the reserves.  It is suspicious.  It's the 'ole saying...follow the money.  Accountants have been saying that for years, most of the time we are accurate. 

[leinweberstudio]

As I don't believe in coincidences, my only comment is "that's some mighty convenient timing!"

"Suspicious" doesn't begin to describe it.

[BlackSheepDyeworks]

@BlackberryDesigns, @leinweberstudio, exactly my thought when I opened that email - the timing!

It's kind of like Etsy promoting those predatory payday loan providers, capitalizing on the unfortunate circumstances in which some sellers now find themselves (never mind that Etsy had a hand in those circumstances).  Doesn't seem to align with 'stand with small', etc.

[DivineCrossings]

Are you kidding me? I just can’t any more. Yet they’ll spin it as “look what we’re doing for our sellers”. The fact they may, in some cases, have caused a need for such services is irrelevant. It’s too much. BTW, there’s another article about payment reserves here (sorry if it’s already been posted):

https://www.pymnts.com/news/retail/2023/etsy-sellers-organize-boycott-over-marketplace-withholding-f...

[leinweberstudio]

Yep. Destroy or slow down someone's income stream and then offer them a loan.

Tsk, tsk, tsk.

[VibeEnvy]

Etsy always does things with specific agendas and if your analyse the changes they make you find how a majority relate to that agenda. Right now so much seems to revolve around reserves in some way. It's like after star seller came out tons of things could be seen as just a funnel to drive everyone towards using Etsy labels and it's less now but still happening. Even this actually, Etsy labels are the easiest way to get the shipping badge, don't get the shipping badge you get placed on reserve. Before it was off-site ads, constant push to optimize for Google, etc. All their tips and articles to improve shops revolve around using Etsy labels (or risk a reserve) and optimizing for Google (to rake up ad fees)

[lulubugjewelry]

I literally laughed out loud when I saw that email, well more of a guffaw really. I'm sure Etsy gets some sort of cut or percentage from those loans. Ugh.

[leinweberstudio]

 I'm sure Etsy gets some sort of cut or percentage...

Of course they do. They're not doing this out of the goodness of their hearts, or because they care about the well-being of sellers.

[Adorabilities]

@VibeEnvy 
It's funny, because the first advice I'd give someone on a reserve is to stop buying Etsy labels. Surely Etsy realizes that most shops on reserve would be trying to limit extra spending (on labels, ads, etc.)

[TulipCollectibles]

YouLend has also partnered with Amazon, eBay, Shopify, and PaySafe/Skrill (the former employer of Etsy's new VP/GM of Payments and Risk exec Chirag Patel who was quoted in the Verge article and who started working at Etsy within the past couple of weeks.)

The new YouLend partnership also explains one of the reasons for Etsy switching everyone to Plaid.  YouLend uses Plaid data to base its loan decisions on.

https://plaid.com/documents/youlend-case-study.pdf

YouLend is basically a merchant cash advance. YouLend charges merchants a flat upfront fee (from 3% and up), and then a fixed percentage of the loan amount  (5%-20%) is deducted from daily sales (source: https://youlend.com/merchants )

[leinweberstudio]

YouLend is basically a merchant cash advance.

And some sellers might be tempted to use it if they can't pay for supplies or rent, due to having 75% or their money held for 90 days.

Funny how it all comes together: a nice shiny double-whammy (mega-reserves and now loans) to show the investors on Wednesday afternoon.

[Adorabilities]

@TulipCollectibles 

and then a fixed percentage of the loan amount  (5%-20%) is deducted from daily sales

Oh gosh, there goes whatever was left of the 25% minus Etsy fees. 

[FunkyJunkyVintage]

Re the so-called need for security around not telling sellers the reason they've been put on reserve, I hope that one gets rocketed to the top of any government investigation. I've been here since 2010 and all the while etsy claims "transparency" I've consistently read posts in the forums from sellers that etsy closed their accounts with no explanation.

While we all know that there are many shops that are closed for some genuine violation of policy, many more have been left in the dust without any information, just closed. And even if a shop is violating policies what is the problem with telling them, "You did such and such, specifically this so and so, and your shop is closed."

Is it a surprise that etsy's using this same M.O. for payment reserves? They're so drunk with power over us they can do whatever they want with our shops and now our money. Then they skew their legal and TOUs in their favor so we're effectively agreeing to these tactics.

"Transparency" and "Keeping commerce human" right?

Transparency = IMMEDIATE communication to the seller as per why they have a payment reserve. How is not disclosing this pertinent information to sellers keeping etsy secure? TELL them, for Pete's sake.

Keeping commerce human = Do we really need to clarify how much this is screwing with peoples' lives? I'm sorry but I see nothing but "inhumane" written all over the face of this subject.

Anyway, glad to see at least this has caught some traction with the UK government, can't wait to see what comes out in the news next about this.

[EpoqueVintage]

Just seen a screenshot to a seller email from Etsy re "youloan"

I honestly thought it was some kind of scam, unreal, couldn't believe it in light of what is going on with payment reserves.

Appalled does not even cover it for me. 

I left the corporate World 20 years ago because of these kind of shenanigans, I am not naive (I am naive!) but I didn't leave that World 20 years ago to wind up right back in it! 

I'm off to join the luddites! 

[CryzalisDesigns]

this is seriously twisted, words fail me  

[BloominLuvly]

This is no better than kidnapping someone's dog and then calling them up and offering it back for $x00.

[HauteVintageJewels]

Thank you for sharing this information, @cindylouwho2.  I think the most egregious thing about this is the amount of the reserves.  75% is ridiculously high, especially for established shops who find themselves subject to one.  I get it that Etsy needs to protect against bogus new shops, so put new shops at 75% reserve until they have either dropped out or established themselves as legitimate.  Etsy simply cannot continue to rely on stupid bots to police and enforce this (and other supposed violations on the site).  They need to pay for some actual humans to make these decisions that are of such extreme importance to people's livelihoods.  

[EpoqueVintage]

It's so corrupt, absolutely stinks. 

I sincerely hope no seller even considers this.

[EpoqueVintage]

@leinweberstudio 

Wednesday Afternoon!

It will be interesting to see how Etsy will spin it all and spin they will.

[TulipCollectibles]

@EpoqueVintage 

 Wednesday's earnings release will be a perfect time for Josh Silverman to use his favorite word "churn".

One of YouLend's marketing points to platforms is that it can help them reduce churn.

From the YouLend website "Improve Loyalty - Reduce churn by up to 75% by extending your value proposition to the businesses on your platform."

[Eclecticgoods4U]

self deleted

[cindylouwho2]

@Eclecticgoods4U they are covering banking in Toronto now, not tech/ecommerce. 

[DivineCrossings]

@EpoqueVintage @I’m already dizzy @TulipCollectibles @strange how that 75% number keeps popping up. Gee, I wonder if that’s the interest rate that’ll be charged on those loans? Maybe they’re going for a trifecta? Or maybe that’s the percentage of the interest Etsy gets? (Hyperbole)

And things are STILL not nesting correctly! *sigh*

[Eclecticgoods4U]

dang, maybe she knows someone who would be interested?

[AntiqueAnimalJewelry]

My shop was put on reserve and I have no idea why. The message I got said it could be for one of many reasons including

1) you are a new shop

2) you suddenly had a load of sales

3) non tracked shipping

I have been with Etsy for 8 years with this shop, and 10 years with my other shop. I had not actually sold anything for two months when they did it apart frm a set of postcards of my dogs for £4. I always send EVERYTHING tracked but this time I didnt ( and it is the only time I had not used tracking - usually I sell jewellery which is very expensive)  because the shipping would have been double the cost of the cards. My buyer received the cards and left me a 5 star review.

I don't know why they would penalise me for that. 

A few days I sold one of my scarves with jewellery images on and they kept about £300 so i am way over the $50 they imply. If I sell a piece of jewellery it could be even £10,000 that they hold.

I wrote to them but I couldnt get any sense out of them