Etsy Formal Complaint: Etsy Withholding Payments, Misleading Advertising Services, and Non-transparent Tax Charges Brooklyn New York

I am submitting this formal complaint regarding Etsy, Inc. for engaging in misleading and exploitative practices affecting new sellers.

I opened a shop on Etsy, made a sale, fulfilled the order, and the item was delivered to the buyer. However, Etsy continues to withhold my payment, claiming that the funds were used to "cover fees." They provide no transparent breakdown of these deductions or when I can expect any payout. This has left me with zero earnings despite fulfilling my obligations.

In addition, I paid Etsy to promote my products using their internal advertising system. After weeks of running paid ads with no visibility or return, it became clear that the service was ineffective and possibly fraudulent. Etsy offers no meaningful reporting or accountability regarding where the ad budget goes or what it achieves.

Another critical issue is the lack of upfront disclosure regarding double taxation for EU orders when using Printful as a production partner. Etsy does not inform sellers that both platforms may apply VAT or digital service taxes, leading to unexpected duplicate tax charges, often deducted from the seller’s payout without explanation. I only realized this after analyzing several confusing statements and discovering large, unreported deductions.

To summarize:

Etsy withheld my rightful payment after fulfilling a real sale.

They provided no direct customer support — only automated responses via chatbot.

Their ad system lacks transparency and failed to deliver any results.

They never disclose the risk of double taxation when integrating with third-party providers like Printful.

As a result, I lost both time and money on their platform and was left completely unsupported.

I respectfully request that this be investigated. Etsy’s practices are deeply unfair, especially toward new small sellers, and potentially deceptive.

Thank you for your attention.