Etsy stealing money from shop owners
February 19, 2019 7:50 AM   Subscribe

Etsy has taken hundreds, sometimes thousands of dollars out of sellers' bank accounts on Friday. They were supposed to put the money back today, the Tuesday after that Friday, but so far they've been making deposits and then withdrawing them. The link I posted seems to have the most current information.
posted by Nancy Lebovitz (50 comments total) 22 users marked this as a favorite
 
So is this some kind of weird grift where they needed to show a lot of capital for some short period so they're just stealing it from sellers?
posted by Frowner at 8:00 AM on February 19, 2019 [9 favorites]


Sounds like the combination of the weekend and holiday made Tuesday the first day to resolve the issue. Think I'd leave the pitchforks in the shed for a day or two longer.
posted by Static Vagabond at 8:08 AM on February 19, 2019 [2 favorites]


It sounds like a lot of people are attributing malice to stupidity at this point, but regardless this incident is revealing a serious lack of support for sellers on Etsy’s part. As many people are pointing out Etsy is long overdue for a customer care call center. A lot of the bad publicity they’re getting right now could be ameliorated by a calm and knowledgeable voice on the phone.
posted by Tell Me No Lies at 8:13 AM on February 19, 2019 [11 favorites]


Static Vagabond, this is very serious for a lot of their vendors. Some of them were pushed into overdraft. Many more didn't have money they needed.

Their communication with their customers has been minimal.

I don't know what counts as pitchforks, but I'm expecting a lot of their customers to leave, and there will be lawsuits.
posted by Nancy Lebovitz at 8:15 AM on February 19, 2019 [12 favorites]


Sounds like the combination of the weekend and holiday makes for perfect plausible denial to cover their asses. Siphoning money from someone's bank account is not okay, ever.
posted by sageleaf at 8:15 AM on February 19, 2019 [48 favorites]


I don't think it's any sort of a plan unless it's someone trying to sabotage the company, but it's probably a really destructive level of incompetence.
posted by Nancy Lebovitz at 8:17 AM on February 19, 2019 [1 favorite]


> Think I'd leave the pitchforks in the shed for a day or two longer.

It's not ok to steal people's money - even temporarily, even accidentally - over a weekend.
posted by boo_radley at 8:24 AM on February 19, 2019 [72 favorites]


I would say put the pitchforks down except -

From what I can see from Twitter, Etsy removed the money from their bank accounts and are refunding it back onto client's etsy accounts, keeping the money inside the company. Considering it's tax season, that's kinda fishy looking.
posted by 80 Cats in a Dog Suit at 8:25 AM on February 19, 2019 [58 favorites]


It sounds like a lot of people are attributing malice to stupidity at this point, but regardless this incident is revealing a serious lack of support for sellers on Etsy’s part. As many people are pointing out Etsy is long overdue for a customer care call center. A lot of the bad publicity they’re getting right now could be ameliorated by a calm and knowledgeable voice on the phone.

Call centers cost real money, so it's no go for a web based companies. So, it's not likely to occur even if they need it. Hell Amazon has a call center and they do everything under the sun to make sure you cannot reach it or if you do you go into automated phone tree hell.
posted by jmauro at 8:25 AM on February 19, 2019 [6 favorites]


I used to be a seller there but once they removed market neutrality by allowing sellers to advertise/fight other sellers with advertisements, I realized they had given up any kind of moral advantage over other venues.

It sure didn't help that sales went DOWN as they made these changes, too. Before I stopped using them all together, I just used them as a sales platform for specific items already booked by customers.

And when they started doubling listing fees, and then charging a fraction of the sales, and, and, and -- the writing clearly on the wall. It's too bad they drank the investor poison.
posted by seanmpuckett at 8:26 AM on February 19, 2019 [8 favorites]


80 Cats in a Dog Suit, it's worse than that-- Etsy has been making deposits into customers bank accounts this morning, and then quickly withdrawing them.
posted by Nancy Lebovitz at 8:30 AM on February 19, 2019 [4 favorites]


For me, the reddest flag here is the Etsy representative who wrote that the issue was going to be fixed and marked the post "solved."

Outages happen to everyone, even skilled teams. Communicating badly about outages requires systemic dysfunction. Was the representative trained in technical incident response? Was that representative permitted to ask questions to anyone who had had that training? Did that representative's management chain lead them to believe marking things "solved" was the most important part of their job?

I'm ordinarily #HugOps, but if you treat your customers and customer-facing staff like this, maybe look alive, Ops, you have a storm brewing.
posted by bagel at 8:32 AM on February 19, 2019 [9 favorites]


I read later on in that thread, and apparently the only way for Etsy to "pin" the issue to ensure people see it was to mark it as "solved".

Which is hot garbage in and of itself, but less malice and more "oh god, our Customer Support tools are awful, just do whatever you can" kinda thing.
posted by Imperfect at 8:36 AM on February 19, 2019 [1 favorite]


Sellers should have their pitchforks out over the fact that this major online presence doesn't have competent tech staff on call over a three-day weekend.

Aren't most Etsy sellers women? The people in that forum seem to be. Just an observation that I'm sure isn't pitchfork-worthy either.

Not saying the government shutdown victims had it better, but at least they had warning and money wasn't actively removed from their accounts that I know of.
posted by sageleaf at 8:40 AM on February 19, 2019 [8 favorites]


I wonder if Etsy has ever randomly *credited* vast swaths of sellers with hundreds or thousands of unearned dollars due to a glitch. What? They havent? Huh. Weird how glitches work to the advantage of the person whose glitch it is.
posted by edheil at 8:55 AM on February 19, 2019 [61 favorites]


Wow. Some people are getting hit with 5,000 dollar errors and overdrafts. RIP Etsy.
posted by loquacious at 8:57 AM on February 19, 2019 [12 favorites]


Between this and PledgeMusic collapsing last week, it hasn’t been a great time for crowdfunding platforms lately.
posted by Ampersand692 at 9:07 AM on February 19, 2019


I'm guessing the posts aren't editable, either, so there's no graceful way to use this customer support tool as an incident status page with updates.

"We're going to sort this out as soon as possible, our teams are examining the problem now" should not be your last word on the matter, as of two days ago, but ought to come with timestamps and promises to provide more updates.
posted by bagel at 9:16 AM on February 19, 2019 [2 favorites]


What alternatives are there to Etsy?
posted by jadepearl at 9:28 AM on February 19, 2019 [1 favorite]


it hasn’t been a great time for crowdfunding platforms lately

Looks like the xoxo team is up to something (fingers crossed)
posted by gwint at 9:29 AM on February 19, 2019


This reminds me, apparently Patreon's founder says that their core business -- handling an anticipated half a billion dollars in other peoples' money, including skimming 10% of that off the top -- is "not sustainable"...
posted by the antecedent of that pronoun at 9:30 AM on February 19, 2019 [3 favorites]


Just assuming, for the sake of argument, that this was all an error in a code release, Friday before a 3-day weekend is a really bad time to be pushing code releases to live.

Anything that touches people's bank accounts and credit cards should be tested to hell and back, too, of course.
posted by thelonius at 9:31 AM on February 19, 2019 [12 favorites]


This entire debacle underscores just what an absolute mess of a banking system we have, and how errors outside of our control can entirely fuck us.

Let me make sure I understand this correctly before I go further:

Allegedly, an error on Etsy’s end caused them to pull money out of peoples’ accounts on Friday. They realized this and have begun refunding the money thinking it’d all work out Tuesday morning, but it seems like they forgot Monday was a holiday.

It’s possible that Etsy is stupid enough to not realize some “refunds” take 3+ business days. Now, I’m not sure how Etsy’s payment processing system works, but it would be possible for them to “reverse” those pending transactions (if they are pending) and have that money returned to the accounts almost immediately (if I am remembering my banking knowledge accurately.) Otherwise, they could be waiting potentially 10 business days. Like I said, I don’t know how Etsy’s payment processing works, so that could be totally off base compared to how some stores process “refunds”, i.e. you could return a TV to Best Buy and be waiting anywhere between 3-10 business days for that money to be credited to your account. I think this mostly has to do with batch processing of transactions but I’m not 100% on that.

The other issue here is that some banking institutions aren’t going to reverse overdraft charges unless they see the refund come through the account. This is a colossal fuck up on Etsy’s part, right before a 3 day weekend.

And going further, it’s completely ridiculous that the banking institutions are so archaic that anybody needs to wait anyway. Not only are they so labyrinthine that the common banking customer can barely understand these intricate and amorphous rules, but the people that work at the banks barely even understand them, and when they do understand them and somebody asks why it’s like that the only answer is “they just are”.

This entire thing illustrates the issues of our current banking setup and how ridiculous it is. Ignoring the complete idiocy and ignorance coming from Etsy, if they (or any other entity with access to your bank information) make a mistake and pull money from your account, they should just as easily be able to credit it back on there immediately no matter what, no waiting x-amount of business days for it to process. It’s fucking ridiculous.

If any of you want to experience how absolutely insane and incompetent the ground floor banking system is go apply to work at a call center doing customer support. One of the most eye opening and illuminating jobs I have ever had. Also the most depressing.
posted by gucci mane at 9:37 AM on February 19, 2019 [19 favorites]


Alternatives to Etsy
posted by Nancy Lebovitz at 9:48 AM on February 19, 2019 [18 favorites]


Curious to know the cause-- from the comments in the Etsy community thread there seems to be some correlation between the size of the mistake and the size of the shop (22k mistake for a shop open since 2015 with 6k reviews/500 products). Wondering if it's a 'simple' range error in the charges, a flipped `<` instead of `>` and you've been recharged the total of all your charges since your shop opened, rather then the usual interval.

Agreed gucci mane-- one scary time, just before I bought a house (so, I had the full deposit in my checking account plus my savings etc) the bank magically made it all go away, to some credit payment on an account not known to me. Took them six (working) days to resolve that, then a further few weeks to correct the various charges caused by the missing funds and that was all an internal mistake.

The idea of pushing a change on a Friday does seems scary, but I think we're generally past the point of no return with that. Most large companies are deploying constantly, back in 2014 Etsy was doing 50 deployments a day so I'm guessing now it's pretty much continuous. One incomplete test suite that doesn't catch an edge case like this and then you're launched into the nightmare complexity of getting finance involved in your rollback procedures *shudder*.
posted by Static Vagabond at 9:54 AM on February 19, 2019 [5 favorites]


This reminds me, apparently Patreon's founder says that their core business -- handling an anticipated half a billion dollars in other peoples' money, including skimming 10% of that off the top -- is "not sustainable"...

To be fair, it's supposedly skimming 5% for Patreon and 5% for transaction/banking fees. But damn, that's not happy news. I think of Patreon, along with Bandcamp, as one of the Good Guys.
posted by gwint at 9:56 AM on February 19, 2019 [2 favorites]


Of course half of the history of the internet is watching Good Guys turn into Bad Guys :(
posted by gwint at 9:58 AM on February 19, 2019 [43 favorites]


Patreon is sustainable. Its investors don't want sustainable. (a twitter thread.)
posted by gauche at 10:05 AM on February 19, 2019 [28 favorites]


Alternative to Patreon.
posted by terrapin at 10:38 AM on February 19, 2019 [6 favorites]


Friday before a 3-day weekend is a really bad time to be pushing code releases to live

Etsy is notorious for their 10 deploys a day culture. And as Vagaband notes, that number only increased with time. Given that the moderator response came in over a weekend, I doubt the weekend or holiday can be blamed for anything other than Esty seller's banks not processing over the weekend. ACH is not a particularly modern API for banking transfers.
posted by pwnguin at 11:20 AM on February 19, 2019 [4 favorites]


Patreon is sustainable. Its investors don't want sustainable. (a twitter thread.)

I saw a discussion about this elsewhere, and the consensus was that Olson was talking out of his ass. Patreon pivoting to providing more services like fulfillment to individuals with a commensurate increase in fees is both a logical extension of their business model and would be useful to their users, as many don't realize how complicated that is. There's a myth on the internet that middlemen are inherently bad, because they just take money and provide nothing of value. But the reality is that few creators have the diverse set of skills to do all these things, because it's a really wide-ranging set of skills, and thus using middlemen and their skill sets makes perfect sense.
posted by NoxAeternum at 11:30 AM on February 19, 2019 [3 favorites]


Call centers cost real money, so it's no go for [...] web based companies.

Amazon, eBay, and PayPal all have them. I think when you grow to a certain size you have to take the hit.
posted by Tell Me No Lies at 11:54 AM on February 19, 2019 [5 favorites]


I saw a discussion about this elsewhere, and the consensus was that Olson was talking out of his ass.

I don't think the concern was about Patreon adding additional services so much as that the CEO claimed that the primary reason for it was that merely being a middleman is somehow not a sustainable business, despite growing to the point where people are putting more than a billion dollars through their system. The entire argument stems from direct quotes of Patreon's CEO, not from people's feelings about middlemen.

It is of course possible that the CEO was just lying in the interview that spawned all this and that this is just an obvious way to make a few bucks, but if you take him at face value, something is indeed wrong with the way companies like Patreon are funded, or at least run.
posted by Copronymus at 12:13 PM on February 19, 2019 [11 favorites]


Jesus, what a mess:


by LaBreaProps - Community Member - 15m ago

I want to also update...
I was charged 396.37
A deposit to fix was done, but only for 317.69
Then etsy took out the 317.69.
So I don't know what is going on, but I am very much not happy.

posted by naju at 1:14 PM on February 19, 2019 [4 favorites]


Amazon, eBay, and PayPal all have them

Of these three, Amazon is the only one that I've successfully worked with, and I get the impression Amazon is dedicated to useful customer service. eBay makes it really hard to get assistance as a seller and essentiallly says you need to use their messaging system and no human interaction unless you're a powerseller (at which point you're given a special number, my inlaws are power sellers), and I've sat on hold for PayPal's customer service several times and given up, hoping my transaction problem will 'work itself out' (which it did thankfully).

And, Etsy does have phone support, my wife has talked to them a few times as a seller, but I'd hate to be on that end of the phone today.
posted by AzraelBrown at 1:38 PM on February 19, 2019 [1 favorite]


Wow. Some people are getting hit with 5,000 dollar errors and overdrafts.

In this thread, some folks are apparently claiming Etsy took $80,000 to $120,000 out of their accounts.
posted by mediareport at 4:11 PM on February 19, 2019 [5 favorites]


Probably running on the same servers, and with the same dev team, as Fallout 76.
posted by turbid dahlia at 4:23 PM on February 19, 2019 [5 favorites]


Giving routing numbers to third parties who can then use them to move money out of your bank account without you confirming it is such a farcical system. It's why I have one outgoing bank account that gets loaded with money to pay monthly bills and another incoming bank account that deposits get moved away from ASAP.
posted by joeyh at 5:07 PM on February 19, 2019 [13 favorites]


In this thread, some folks are apparently claiming Etsy took $80,000 to $120,000 out of their accounts.

That is really and truly stunning.

With that kind of float you would have to assume that that is a sizable small business with either payroll to pay or suppliers to pay, and it would be logical to assume that that isn't even their primary account or line of credit but their actual short term operating float due to be paid out and turned over ASAP.
posted by loquacious at 9:30 PM on February 19, 2019 [2 favorites]


joeyh: Giving routing numbers to third parties who can then use them to move money out of your bank account without you confirming it is such a farcical system.

Unfortunately, with the way “the rules” work, as soon as you give someone/a website that information, you’re giving them authorization to do exactly that. Which is stupid, but like I said above the rules are so archaic and asinine that “that’s just the way it is”. If Etsy can pull money out that quickly they should be able to put it back in that quickly, no questions asked.
posted by gucci mane at 9:35 PM on February 19, 2019


Just a note on how a moderately reasonable banking system can work: When a company (or the government) sends a charge to my bank account, I have to log in and approve the payment. If I do not, no money is transferred. I if do, it is transferred immediately.
posted by Nothing at 2:32 AM on February 20, 2019 [8 favorites]


Folksy is an alternative in the UK.
posted by paduasoy at 4:19 AM on February 20, 2019 [1 favorite]


This is hitting some creative people I know HARD. It’s worse when you consider that some of them are chronically ill, and this is a way they’ve found to generate income despite being unable to maintain a more traditional job. Folks for whom a couple of hundred dollars is the difference between making the rent or not.

Watching the Patreon situation, too.
posted by Nancy_LockIsLit_Palmer at 6:31 AM on February 20, 2019 [8 favorites]


The tweets about a $124K charge were about a denied credit card transaction. Some of the other larger amounts too. (But not all of them.)
posted by snuffleupagus at 10:50 AM on February 20, 2019


At least one user cited a successful charge of 22k, so these are not small amounts of money. And even for the smaller ones, there are people who are in a lot of trouble, unable to buy critical items because their account has been emptied. It is entirely unacceptable behavior from Etsy, especialy the near-total lack of communication to their customers while happily lying to outlets covering the issue.
posted by tavella at 11:14 AM on February 20, 2019


As a consumer lawyer I'm skeptical about the answer, "These companies won't pay call centers because that costs money and it's not part of their business model." At some point and under certain—theoretical*—circumstances, that becomes an unfair business practice and may violate the law. If a company is knowingly growing its business past a point where it can respond reasonably to foreseeable breakdowns, I think that's actionable by law enforcement (like an AG's office) and by any consumers who were harmed, either individually or as a class. And some consumer-protection laws provide recourse not just for consumers but also other businesses that suffer harm.

* I say "theoretical" because I don't know enough about Etsy or its policies to know whether this is one of those circumstances. I've never used/sued Etsy. This is a common issue that I often hear raised about various Internet-related companies.
posted by cribcage at 12:20 PM on February 20, 2019 [3 favorites]


I don't think they have to have call centers, specifically -- but they have to have something. Amazon isn't really a great point of comparison for any smaller company, even Etsy, but Amazon makes up for making their call centers difficult to reach by providing pretty swift and obliging chat and email support.

Clearly Etsy has screwed up badly and it appears to lack the resources to respond well, if they aren't being intentionally shady (which remains to be seen).
posted by snuffleupagus at 3:46 PM on February 20, 2019


Etsy has posted an update, linked in the original FPP link. I feel like they could have done worse, though they have loads of room for improvement.

Customers are still swapping tips on how to get their money back in the thread.
posted by bagel at 4:18 PM on February 23, 2019


Etsy is notorious for their 10 deploys a day culture. And as Vagaband notes, that number only increased with time

Move fast and take things
posted by thelonius at 4:28 PM on February 23, 2019 [1 favorite]


A small group of sellers (approximately 0.1% of total active sellers) had incorrect charges go through to their payment card on file.

It looks like Etsy has just under 2 million active sellers according to the numbers I saw so this might be more plainly stated as "A small group of sellers (approximately 2000) had incorrect charges go through to their payment card on file."
posted by metaphorever at 7:11 PM on February 23, 2019 [3 favorites]


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