Etsy injects $25 million into new payer protection program


Etsy plans to roll out a new purchase protection program for buyers and sellers, as part of a larger effort to improve the user experience on their site.

The program, which is due to begin August 1, will reimburse shoppers up to $250 for missing, damaged or falsely advertised items.

For the thousands of Etsy sellers who recently went on strike over rising transaction fees on the platform, this program represents a promising step in the right direction. Yet, with selling fees remaining at an all-time high, many sellers are still exploring other ways to sell online.

Etsy Launches Payer Protection Program

Have you ever had to dip into your own pockets to finance a lost delivery? Etsy has finally acknowledged this issue, and starting August 1, sellers will no longer be required to cover the cost of lost or damaged items themselves.

Yesterday, the online retailer announced that it would launch a payer protection program that will fund refunds on behalf of sellers, up to $250 per item. This amount is also intended to cover tax and shipping costs.

Etsy has promised to invest at least $25 million annually in this program, and seller participation is completely free.

“Easy problem solving is an essential part of the online shopping experience, and our new Etsy Buyer Protection program aims to make shopping on Etsy even more worry-free” – Raina Moskowitz, Chief Operating Officer of Etsy

According to a recent publication from the sales platform, the program is part of a larger effort “to improve customer support, increase signals of trust through user experience, and maintain the integrity of our marketplace as a destination for unique and special items.”

In addition to providing retailers with a safety net when events occur beyond their control, Etsy has also committed to investing over $50 million in its customer support system. This budget aims to reduce customer wait times by expanding the site’s support team by 20% and improving its live chat presence.

Generally, these changes have been welcomed by Etsy sellers, but they didn’t come out of nowhere.

The program announcement comes just months after thousands of Etsy sellers went on a week-long strike against the site, raising transaction fees by 30% from 5% to 6.5% on each sale.

One of the main demands of the strike was to improve the sales experience on the site. So, with the new protection system aimed at addressing this concern, will the program appease Etsy sellers?

What does Etsy’s new protection system mean for sellers?

When the program is implemented, sellers will be able to keep their earnings when an item they sent never arrives or arrives damaged. Undeniably, this represents a massive win for online retailers – but the program comes with some caveats.

First, the scheme will only cover the first claim in a calendar year. After this initial recovery, sellers will be required to pay for the depreciated items themselves.

Second, retailers will need to use a shipping label purchased on Etsy, deliver items with tracking information, and have an estimated delivery date to be eligible for the program. In addition, if the details given are incorrect, the cost of the package cannot be covered.

Despite these hurdles users will be forced to jump through, the program should ease the worries of countless disgruntled sellers. But for retailers looking for lower transaction fees and greater selling autonomy, Etsy isn’t the only way to sell online.

Is Etsy the best way to sell online?

If you don’t often need to cover the cost of lost or damaged items, Etsy’s new program may not affect you as much. Additionally, if your business has low margins and may be struggling to keep up with rising platform fees, it might be time to consider other options.

By launching your own e-commerce site, you can fully control your selling process and avoid Etsy’s growing processing fees. Although it may take longer to earn, it is likely to provide your business with greater and more profitable opportunities in the long run.

If you’re curious about revamping your eCommerce site or building one from scratch, read our guide to the best eCommerce website builders on the market. Alternatively, if you want to see the best solutions at a glance, check out our comparison table below.

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