Reserve is killing my business

[PrimePrintsUK]

Good evening,

I'll try to keep this short and to the point.

My shop sells greetings cards. 6x6" square folded card, so obviously we post them as letters via Royal Mail 1st Class, which is an untracked service.

Etsy placed a payment reserve on our account on the 20th May 2023, over a month ago.

The only way to get our funds is to provide tracking information. But how?

Signed for letters cost £2-3 and our product ranges from £3-4 so this is impossible. We have over 50,000 sales but are now going to be forced to close our shop unless given a solution.

We've survived over a month with the reserve but are now at breaking point where our bank balance has reached £0 and we're unable to cover our Royal Mail business account payments, so the account has been frozen. Not to mention as a corporation that is VAT registered, we have quarterly VAT bills and other tax affairs to take care of.

Is this a major oversight in Etsy's reserve system?

[OrWaDesigns]

Having a reserve is awful. I have one also. I can see you have several 1 star reviews tho which is what probably triggered the reserve. It is risky to ship without tracking. 

[nineteen27]

reserves are not killing your business.

shipping without tracking is killing your business.

and customers are complaining their items are shipping late.

and arriving late.

which is also killing your business.

you will need to raise your prices.

and start sending things tracked...

with accurate processing times and delivery dates.

[quilligraphy]

In the US to send a first class or international first class and you want to add tracking..it will cost you $4.00 additional to do that.

This is getting ridiculous.  I don't think Etsy is the place to sell stationery.

[ExtremeCreation]

It may very well be the 1 star reviews you have had recently. From what I read, the customers mentioned not receiving the order or receiving them late. Tracking would help tremendously with those issues. 

Perhaps making a 5 or 10 pack of your cards for a variety of special occasions or allow your customer to pick 5 or 10 cards for the "personalized mix". This may be beneficial to be able to cover the cost of postage that has tracking. 

[CarpetCollectionAU]

"Is this a major oversight in Etsy's reserve system?"

Rather than representing an "oversight" it may be that the particular situation is exactly what Etsy considers to be a "risky" business.

Many Shops have managed to ship without using a tracked service and still avoid a "Reserve" of funds. Conversely, many Shops are coming to Forums stating that it was their belief that one particular thing caused the "Reserve", but, in fact, there were several other "risk factors" present as a consequence of that thing or something else completely.

But, in your case, it would seem that it is not simply the untracked Shipping which is the issue, but the number of less than 5 Star Reviews (18.4% for June alone) which state late or not received delivery. If these people also required a "Refund" then another of the "Reserve" triggers will have been pulled. 

Added to these issues is the absence of Messaging SSP Badge. 

Shippping, Messaging and Reviews are not just prerequisites for SSP, but basic Service Level Standards expectations of Etsy. Now, more than ever, attention to all three focii of SSP is imperative. Failure to comply with these when accompanied by any other "risk" factor such as  Refunds/Cases could be just enough to "tip the Reserve scales" for previously unscathed Sellers.

Reserves are not punishments and, whilst understandable, it is wrong to take it personally. But Reserves do indicate that something about the Shop's business model / performance presents as a "risk" to Etsy and they are mitigating against that risk

What is clear is the fact that some types of Shops are more susceptible to this "risk" evaluation than others. High $ Value Custom Made items which require long processing and shipping is one. Conversely, relatively lightweight, low $ value items which are sent without tracking is another. 

PAR has been an active program since Feb 2021. SSP has been an active program since Sept 2021. There is nothing new with either of these. What is new is the apparent increased interrelation between the two in recent weeks.

Many were quick to advise that the "little Purple Star" was meaningless and have consciously ignored it for nearly 2 years. Well, it may have been meaningless if one was ex[ecting better placement in search or increased sales etc for Shops with SSP. But could it be possible that Etsy planned an entirely different purpose for SSP all along and we were all looking in the wrong direction?

Instead of being a "Reward with Benefits", SSP is a way to identify and quantify Service Level Standards performance and use this as one criteria in the PAR algorithm

[customisedbyclaire]

Can't you send your cards via Royal Mail 48 which costs 95p on account? This has a valid tracking number that works with Etsy. Or Royal Mail 24 which is £1.20. 

[CraftedCreated]

It's most likely because you don't have any of the star seller badges.

Orders under £10 in value shouldn't need a tracking number to count towards the shipping badge

Funds will become available when tracking is added or after 45 days from the date of sale.

[PrimePrintsUK]

Thanks for the responses all.

To address some comments in one:

I appreciate that we likely need Star Seller badges to avoid reserves - we will work towards this over the next month.

In the meantime, because the badge isn't achievable until 1st August, we are stuck.

We can't increase prices like some have said as we're already selling greetings cards for £3-4 and you can't get away with selling such a product for much more.

Here are my only options with Etsy shipping: https://i.imgur.com/YY5QjmW.png

The cheapest way to get tracking is to pay over double as much (£2.25) for Signed for 2nd Class -- again, completely impossible for a product that only sells for £3-4 (deduct materials, ink, packaging, VAT and fixed costs)

Royal Mail 48 isn't an option on Etsy.

[CappuccinoLace]

Royal Mail 48 isn't an option on Etsy.

Use 2nd class in the drop down (it's only used for estimated delivery dates) and buy RM48 through Click & Drop.

When completing the order, add the tracking number.

It should arrive before the last date of 2nd class estimate of 3 days, and satisfies the tracking element.

[ExtremeCreation]

Have you considered selling your cards in packs of different amounts for a variety of special occasions or allow your customer to pick x amount of cards for their "personalized mix". This may be beneficial to be able to cover the cost of postage that has tracking. Maybe at a slight discount for purchasing more than one would be appealing to people.

[JJewellerySuppliesUK]

I don't see how you could feasibly pay for any tracking on your items so I would concentrate on trying to get the Star Seller badge which will take you out of reserve.  You only need tracking for orders over £10 and I would guess most of yours are not over £10.  For those that are, then I would suggest paying the extra £1 for those ones only.  However, I thought Tracked 24 and Tracked 28 only added an extra 30p or so to a Royal Mail business account price.  I'm guessing you already have a RM business account with your sales volume but if not then I would look into that. 

I think the main issue which has triggered the reserve is the negative reviews for non receipt and I don't know what you can do about those retrospectively so you will have to wait for them to fall out of the 3 month review period.

All the best

[PrimePrintsUK]

@CappuccinoLace in response to "buy RM48 through Click & Drop"

There is no such option. The closest thing I can see on Click & Drop is Tracked 48 which costs a minimum of £2.70.

https://www.royalmail.com/sites/royalmail.com/files/2023-04/royal-mail-online-price-guide-april-2023...

Let me know if I'm mistaken.

@JJewellerySuppliesUK we do have a Royal Mail Business account but it is now frozen due to being unable to make payment.

[CappuccinoLace]

yes it's because it's called RM Trakced 48, so people shorten it to RM48 or tracked48.

I was simply mentioning that just because it's not on etsy's list doesn't mean you can't use another service.

And to @customisedbyclaire 's post about the cost on account.

Which from the rest of your post I see you can't use right now.

[customisedbyclaire]

You can ask for that service to be added to your account. It definitely exists as I use it! It isn't the same as Tracked 24 and Tracked 48. It just has delivery confirmation but your funds will get released when it shows delivered.

[PrimePrintsUK]

@customisedbyclaire are you saying you have RM24/RM48 on your Etsy account?

I also forgot to mention that before our Royal Mail account was frozen about 10 days ago, we did use the RM48 service but all orders with tracking are still in reserve.

Here's a screenshot from my Etsy orders: https://i.imgur.com/9E5YerB.png

So Etsy doesn't accept RM48/RM24 as tracking now?

[customisedbyclaire]

I don't use Etsy labels if that's what you mean. I have a Royal Mail OBA and use Click and Drop which integrates with Etsy and marks everything shipped for me and inputs the tracking number. As soon as most of the orders show delivered the money gets released. 

[ElysianArtisanCA]

This is the worst of Payment Reserve.. Low value items.

I hate the reserve, I got mine because of messages, which is ridiculous. But being higher valued items I just ship them the next day, delivered in 7 and reserved order released due to delivery.

If you have over 50k sales then closing your store is silly. Change the way you do business and make money.

3 Options, though it sounds like your too far gone for any except #1 now initially:

1. Raise prices by the cost of lending the float money and get a loan to cover the reserve period. Money is money.

2. Change your pricing model. Lowest priced goods are getting hit the hardest everywhere and it will get worse.

3. Change your delivery service, increase postage price to compensate.

[moonbeamgifts]

You have to do what's right for your business but either sustaining it on your own with the reserve or offering the product with appropriate  shipping costs are likely to be your option on Etsy going forward - at least reading the writing on the wall.

We're in the US and are fortunate enough to have tracked first class (name change coming in July) shipping but it was a much lower cost than when I first started selling.   As I continued on the journey, USPS raised prices  time and again and I was sure at some point, people wouldn't pay to ship 1 yard of ribbon.   

Maybe some don't and move on without purchasing but I don't strive to make money off of shipping (looking at you, Etsy and your red text warning me buyers like free shipping) and charge as close as I can to the realistic rates with safe packaging.   
Ribbon still sells so I guess I'll continue to as well - until either Etsy decides I won't (hahaha, never know) or USPS raises the rates so high that it's not feasible.

[LastCentury]

"Signed for letters cost £2-3"

And you get tracking on that? If yes... Every Canadian shop is envious of that price... we can't get tracking for less than $7 or $8 and even that has major limitations depending on the carrier we use & delivery method. 

[PrimePrintsUK]

Etsy Support are giving the most robotic email responses you can think of.

I think our only option at this stage is to pass on the ridiculous cost of '2nd Class Signed For' to our customers, and see if that even works.

We will prepare to stop selling through Etsy. After 50,000 sales it's a shame but a full focus on Amazon sounds like the way forward.

By comparison, Amazon have a VTR (valid-tracking rate) metric where Royal Mail 1st/2nd Class are actually exempt because they are well aware that tracking is impossible for such low-value items. Etsy are oblivious to it. What a shame.

[ExtremeCreation]

Just note that Amazon also has reserves no matter how long a shop has been on there or how many sales it has had that can be affected several factors they take into account for example by the shop's performance just like Etsy. I believe its a 2 week reserve after the orders are marked as tracked with valid tracking. If anyone know exactly, please inform as this would be insightful information.

[AAANativeArts]

If  you  don't find it feasible to ship with tracking, your only option is to wait 45 days after the sale to get paid when you are on a reserve. At least in the US where I am, payment for tracked orders are released within 2 to 3 days of showing shipped. Perhaps you could use tracking just for a while so you can get some operating funds, even if you are losing out on the shippping cost. You can always deduct that loss on your taxes later, and at least  you would get your money faster while you are on a reserve. Otherwise, you will probably end up having to refund orders just because  you don't have the money to send them.

With the tactics Etsy has been using lately, it would be a good idea to set aside a fund that will cover you for at least 45 days if Etsy puts you on resevere. It can happen to anyone. I am in the top 1% of sellers in my category, and have been on Etsy a long time and even have the fast shipping badge, and I am on my 2nd one, and have no idea what I've done wrong.

[GoldstoneNursery]

I'm in the US and I have orders tracked as delivered a week ago.  I purchase all labels through Etsy. I have yet to see one dime from an angle order with valid tracking.  In your experience they are issuing payment?  Because that is definitely not my experience since having the reserve placed on June 10. 

[TinTeddy]

Your policies don't comply with UK online selling laws, which may not be helping the situation.

You must display the physical address of the business in the area called Seller Details and have a GDPR privacy policy in place.

The listings I looked at had an option for customization, but can also be bought as they are.  For items that are not customized, you are legally obliged to offer returns. 

I would recommend fixing these important things - not only because they are legal requirements, but also because it could help convince Etsy that your shop doesn't need the reserve.  I don't know if these are criteria that Etsy considers when setting reserves, but they are important, and clearly having a shop open for so many sales without such significant issues can't be helping your argument.

I hope you are able to sort the reserve issue soon.