Why am I receiving an error message in chat when I try to give customers a discount?
By 'chat', do you mean you're messaging potential buyers with discount codes?
If you were sending unsolicited messages to people who favorited your items, it's considered spam. Those people may have marked your messages as spam and Etsy has revoked your messaging privileges.
@RileysWorkshopGoods: Are you referring to the 'quick discount' button on Messages, or to something else? And are you experiencing this using an Etsy app (on which operating system) or via mobile browser or desktop browser (which browser and operating system)?