Etsy Stole Thousands From Small Business and Permanently Closed the Shop Without Warning, Owner Claims

A small business owner revealed that e-commerce company Etsy shut down their store without paying them for the items they sold, then reported that income on the user's tax forms without ever distributing the funds.

X user @ama_a93 shared their story on the platform, stating that they had tried to contact the company through email to no avail. Frustrated, they then took to social media, posting an online comic detailing their experience with the e-commerce company.

"Why you shouldn't open an Etsy shop: a cautionary tale," read the first image.

"Etsy won't reply to my emails so I'm making a stupid Twitter comic," it continued.

The user proceeded to explain how they opened up an Etsy shop in July 2024 in order to sell some merchandise they'd created but did not get paid for their sales despite items being shipped out and even received by the customers that ordered them.

After reaching out to Etsy about the issue, they were told that the company would look into the problem. However, their shop was unexpectedly suspended soon after.

They later found out the suspension occurred after a customer who ordered an item from their shop opened a case against the small business due to not having received the package despite the fact that the package had only been picked up by the post office less than half an hour earlier. Instead of allowing the shop owner to respond to the customer or settle the case, Etsy settled the case itself, shutting down the user's shop moments later.

"I filed an appeal, and I get a response after FOUR MINUTES saying it was denied and my shop was permanently suspended. BTW they said 'a specialist will carefully review your appeal details and account history,'" wrote the user.

"Since I've tried to reach out through email (the only way to contact them directly) and on here I haven't gotten any meaningful response. To this day I still don't know what policy I violated. At this point I just want to get the money I'm owed and get it over with," they continued.

Later, the user checked their 1099 tax form and realized that Etsy had reported their income as almost $5,000 on the form despite the fact that they never received any of this income.

"Now PLEASE tell me how I'm supposed to pay taxes on money I haven't gotten," they wrote.

The user finished off their story by pleading with Etsy to respond to their emails and speak to them about these issues, voicing their willingness to hire a lawyer if the company did not respond.