Suspension riskFP-2 · Fees & Payments Policy

Sellers are responsible for buyer chargebacks; Etsy may recoup chargeback funds from seller accounts

What this rule means

You are responsible for buyer chargebacks. A chargeback happens when a buyer disputes a payment with their bank or card company. The Etsy Payments Policy says Etsy reserves the right to recoup funds associated with buyer charge-backs from the seller. When your balance is too low, Etsy can charge the card you keep on file for the amount.

What Etsy says

Etsy reserves the right to recoup funds associated with buyer charge-backs from the seller.

Read Etsy's full Fees & Payments Policy

Why Etsy has this rule

When a buyer disputes a charge with their bank, the money is pulled back from the payment. Someone has to cover that amount, and Etsy's Payments Policy puts it on the seller. Etsy responds to the card networks on your behalf, you must give it any information it requests within five calendar days, and Etsy may recoup the funds. By storing a card, you authorize Etsy to charge it for amounts owed to Etsy, including chargebacks, where your available funds do not cover them.

Etsy also watches risk. A shop with many disputes can be a sign of trouble with orders, shipping, or communication. The Payments Policy lists the ratio of cases opened by buyers among the factors in its reserve decisions, and it says Etsy may put a hold or deposit delay on your balance if it believes your actions may result in buyer disputes or chargebacks. Fulfilling orders well and keeping clear records is the best protection.

Common mistakes

Ignoring a chargeback notice and missing the five calendar days Etsy gives you to send information.
Failing to keep tracking numbers and delivery confirmations for each order.
Not checking whether Etsy already took the amount from your balance.
Letting buyers' messages go unanswered, which can lead them to dispute with the bank.
Shipping without tracking on higher value orders.
Leaving your card on file expired, so Etsy cannot collect an amount you owe.
Describing an item loosely, so the buyer feels the item is not as described.
Assuming a chargeback is the same as a normal refund and needs no response.

Examples

AllowedYou check your Payment Account, find the order, and send tracking and delivery proof.
AllowedYou answer a buyer's complaint promptly so that they do not go to their bank.
AllowedYou keep a valid card on file so that amounts owed can be collected.
AllowedYou keep order records for each sale, including shipping confirmation.
Not allowedYou ignore a chargeback notice and hope it goes away.
Not allowedYou ship a high value order with no tracking and have nothing to show the buyer got it.
Not allowedYou leave a buyer's message unanswered for weeks, and the buyer disputes the charge.
Not allowedYou close your card on file while you still owe Etsy an amount.

How to stay compliant

Review the chargeback notification in your Payment Account — identify the specific order(s) involved.
Gather evidence of shipment and delivery (tracking confirmation, order details) to give Etsy within five calendar days of its request.
If Etsy has already deducted the chargeback amount from your balance, check whether the dispute is still open for seller response.
If your account has a Reserve, keep a strong fulfillment and communication record. The Payments Policy says Etsy reviews reserves from time to time and may reduce or remove one after positive performance, such as fewer cases and better order fulfillment.

Effort: medium · 1-3 hours

If your suspension email cites this rule

Read the notice first and find the order or orders involved. Look at your Payment Account to see whether the amount has already been taken from your balance. Then check whether the dispute is still open for a seller response. If it is, pull together what you have: tracking, delivery confirmation, order details, and any messages with the buyer. Etsy responds to the card networks for you, and the Payments Policy says you must give it any information it requests within five calendar days. Send what it asks for and keep copies.

If Etsy has placed a reserve on your account, expect it to be tied to your recent record. The Payments Policy lists the ratio of cases opened by buyers among its reserve factors but gives no exact threshold. The email that tells you about a reserve states how and when Etsy will review it. Fill every order the way you say you will, reply to buyers promptly, and keep records. Be careful about what you say to the buyer. Do not pressure them to withdraw the dispute. Etsy makes the final decision, and the funds may not return.

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Common questions

What is a chargeback?

A chargeback is when a buyer asks their bank or card company to reverse a payment. The money is taken back from the sale. The Payments Policy says Etsy reserves the right to recoup funds associated with buyer charge-backs from the seller.

Can Etsy take money from my card on file?

Yes, for amounts you owe. By storing a card, you authorize Etsy to charge it for amounts owed to Etsy, including refunds, reimbursements, chargebacks, adjustments, claims, and seller fees, where your available funds do not cover them.

How do I respond to a chargeback?

Find the order in your Payment Account and send Etsy what it asks for, such as tracking, delivery confirmation, and order details. The Payments Policy says Etsy responds to the card networks for you and that you must give requested information within five calendar days. Keep copies.

What is a payment reserve?

A Reserve is money held back from your sales. The Payments Policy says Etsy places one when it believes there is a high level of financial risk, holds a percentage of your balance for a specified period, and releases it on a rolling basis unless a buyer raises a case or files a charge-back. A variable reserve can delay funds for up to 180 days or deduct them for up to 90 days. The policy lists the ratio of buyer cases as a factor but gives no exact threshold.

Does a chargeback hurt my shop?

It can. The amount is taken from you, and a high rate of disputes can lead to a payment reserve or other action on your account.