Etsy to protect buyers, sellers with new refund plan
Etsy Inc. will soon offer refunds to buyers who get less than they paid for (or nothing at all).
Starting Aug. 1, 2022, the online marketplace retailer will launch its new Etsy Purchase Protection plan. The upcoming program will provide buyers with a full refund for purchases on Etsy.com in the cases that they don't match the item description, arrive damaged, or never arrive.
The company plans to invest at least $25 million per year into the purchase protection program to cover refunds on behalf of sellers for qualifying orders up to $250. In addition to the purchase protection program, Etsy says it will continue to invest in product and customer service improvements to make the issue resolution process as seamless and efficient as possible for both buyers and sellers.
Etsy is offering sellers some coverage for buyer refunds in the wake of recently increasing its seller transaction fee is increasing from 5% to 6.5%. The company has reported that as of the fourth quarter of fiscal 2021, it had 96.3 million active buyers on the platform. The Etsy marketplace acquired approximately 10 million new buyers in the quarter, its highest level of new buyer acquisition since the fourth quarter of 2020.
Habitual buyers, those with six or more purchase days and over $200 in spend in the trailing twelve months, grew 26% year-over-year, remaining the company’s fastest-growing cohort. The company also says it is leveraging its operational playbook for its most recent acquisitions — U.K.-based fashion resell marketplace Depop and Brazilian online marketplace Elo7.
"Easy issue resolution is a critical part of the e-commerce shopping experience, and our new Etsy Purchase Protection program aims to help make shopping on Etsy even more worry free," said Raina Moskowitz, Etsy COO. "This program will help buyers feel more confident when they shop from small businesses on Etsy, while we invest directly in our sellers to provide them an important layer of assurance."
"This is just one of many steps we are taking to inspire trust and confidence in the Etsy brand," said Moskowitz. "Etsy's Purchase Protection program will complement our broad efforts to improve customer support, increase trust signals across the user experience, and maintain the integrity of our marketplace as a destination for unique and special items."
Etsy's Purchase Protection program will go into effect Aug 1., 2022. The company says the program has no impact on Etsy's second quarter fiscal 2022 financial guidance provided on May 4, 2022.
Founded in Brooklyn, N.Y. in 2005, Etsy Inc. operates two-sided online marketplaces that connect buyers and sellers of handmade and creative items around the world. The Etsy portfolio also includes fashion resale marketplace Depop, musical instrument marketplace Reverb, and Brazil-based handmade goods marketplace Elo7. Each Etsy marketplace operates independently, sharing product, marketing, technology, and customer support resources.