Business Life

What Etsy’s Purchase Protection Program Really Means for Sellers

Etsy’s Purchase Protection program launched on August 1, 2022. Promoted to directly invest in Etsy sellers, it’s also intended to bring more shoppers to the online platform.

Etsy’s primary goal with this new refund policy is to generate more trust among shoppers. But reception from the seller community is mixed.

And here’s why.

That’s right, Etsy’s Purchase Protection program is designed to protect both buyers and sellers. One of the ways this works is by offering buyers full refunds if purchased items:

  • Arrive damaged
  • Don’t arrive at all
  • Or the buyer claims the listing description doesn’t match their purchase

The kicker? Etsy will refund buyers and sellers will keep their earnings.

This might sound too good to be true. And that’s because there’s more to Etsy’s Purchase Protection program than first meets the eye.

Etsy says its Purchase Protection program is based on feedback from both buyers and sellers. But it’s been met with a bit of criticism, unsurprisingly, from both sides.

This article will dive deeper into Etsy’s Purchase Protection, and what it really means for sellers. 

What is Etsy’s Purchase Protection program?

Etsy’s Purchase Protection program - broken vase.

In short, Etsy’s Purchase Protection program is designed to help both sellers and buyer in the event that a product is lost or damaged within transit.

But that’s not it.

Etsy’s Purchase Protection also intends to protect against false advertising from sellers or deceitful practices from buyers.

As an Etsy seller, you know that some buyers are out to save money any way that they can. Even if that means scamming sellers through false refund requests.

How many times have you fulfilled an order, only for the buyer to message you back saying “it doesn’t look like the picture” or “it doesn’t match the description.” So you double check your product description (just to be sure), and yes, the item you shipped is exactly what they ordered!

In theory, Etsy’s Purchase Protection is supposed to protect sellers from false refund requests like these.

In order to make sure both parties have a “positive experience” on Etsy, the marketplace will cover buyer refunds for orders up to $250 USD. So long as the case is made against a ‘qualified order‘.

What items qualify for Etsy’s Purchase Protection?

Woman calculating shipping costs.

Since your products only count towards Etsy’s Purchase Protection if they’re qualified, it helps to know what a qualified order is.

You don’t have to take any action to participate in Etsy Purchase Protection as long as your orders meet the following criteria:
  • Orders over $250 USD are not eligible for Etsy Purchase Protection.
  • Orders must have valid tracking information and/or have been shipped using Etsy shipping labels.
  • Your listing must include and you must stay within your processing times. Orders must also have an estimated delivery date.
  • Orders must be shipped on time to the correct address listed on the original order.
  • Orders must be “packaged carefully” to avoid damage during transit.
  • You must be using Etsy payments.
  • Your listing photos and descriptions must match the item you sent.
  • Your shop must be in good standing with Etsy.
Etsy’s Purchase Protection program - Woman taking notes of what it takes to have a qualified item.

Tips to remember:

  • If you’re not using Etsy shipping labels, you’ll need to mark your order as “shipped” as soon as you mail it. Then provide Etsy with the tracking number.
  • Etsy Payments isn’t available in all regions. If you’re unable to offer this payment method, then your products do not qualify for Etsy’s Purchase Protection.

If your listings do not meet the requirements listed above then they do not qualify for Etsy’s Purchase Protection. This means that you are responsible for refund costs associated with these orders, including refunds for lost or damaged items.

How does Etsy’s Purchase Protection benefit buyers?

Etsy’s Purchase Protection has obvious perks for buyers. As a matter of fact, this entire program seems like it’s more beneficial for buyers than it is sellers. Because ultimately, if there’s a problem, there’s a good chance buyers will get their money back.

Whether Etsy pays for it or you.

If a product doesn’t arrive, is damaged when it does arrive, or isn’t as described, then buyers get their money back.

And if your products are qualified for the program (meaning, they meet the rigorous requirements mentioned above) then Etsy pays for the refund on your behalf.

But if your products aren’t qualified, then you pay for the refund, and you’ll probably have to eat the cost of the original item you sent.

Etsy’s Purchase Protection program - Hands exchanging packages.

What this means for Etsy shoppers is it makes it easier for those who are on the fence about buying from Etsy to actually commit to a purchase. This puts them in the Etsy eco-system and should hopefully ensure they have a smooth buying experience, increasing their chances to continue shopping on Etsy.

At the end of the day, Etsy wants more customers. And their new Purchase Protection program ensures that shoppers can trust they they’ll get what they pay for, within the timeframe they expect.

This makes Etsy a safer marketplace for shoppers everywhere.

How does Etsy’s Purchase Protection benefit sellers?

The company’s legal policy states that they understand things can occasionally go wrong. Because honestly, that’s just a natural part of buying and shipping products online.

So when things inevitably do go wrong, Etsy could refund up to $250 USD on your behalf. This means your less liable to be down on profits when something goes wrong that’s outside of your control. 

But remember, if you want your orders to be covered as a seller, you must meet the requirements listed above.

Since Etsy explicitly states that orders must be packaged carefully, Purchase Protection won’t always apply to cases concerning damaged items.

Each calendar year, Etsy may cover a seller’s first case resulting from an item damaged in transit. But repeat offenders shouldn’t expect their orders to be covered by the program.

Seller’s criticism towards Etsy’s Purchase Protection program

Woman accepting package from courier.

Etsy reportedly doesn’t understand its own policy

Several sellers have reported that buyers who’ve opened a case after 48 hours of reaching out to the seller, but don’t request a refund, often get the refund.

This may be Etsy assuming that refunding the money solves each and every problem involving a case, without actually understanding their own policy.

In reality, Etsy believes that buyers should always get the item they ordered or get their money back. They state as much in their buyer protection policies.

So if a buyer doesn’t hear back from a seller within 48 hours of opening a help request, Etsy may be quick to refund their order if the buyers follows through with a case against your shop.

Bad timing when opening an Etsy case

If a buyer can’t reach the seller or resolve an issue within 48 hours of being contacted by the buyer, buyers can open a case.

At this point, Etsy gets involved to resolve the situation which will probably result in a refund. Problems from here arise when a buyer reaches out to a seller on a Friday or the weekend, and resolving the issue requires a trip to the post office.

And don’t forget, that 48 hours also applies when your Etsy shop is in vacation mode. 

Does Etsy show bias toward buyers?

Some Etsy sellers on Facebook have explained that the protection policy “throws sellers under a bus.”

After the launch of Etsy’s Purchase Protection program, some buyers are aware that they wield the power, with some potentially making a habit of opening a case on Friday afternoon.

Due to the weekend, sellers can’t resolve the order by going to the post office. Come Sunday evening after 48 hours has passed, the buyer requests a refund, and Etsy is very quick to give that refund, sometimes within 5-minutes of the buyer making that request.

Here’s what we think about Etsy’s Purchase Protection program

Etsy’s Purchase Protection program - Opening Etsy t-shirt order.

Update your policies

Each time a case is opened, the first thing Etsy will do is look at your shop’s refund policies. Make sure they’re up to date and watertight.

Although you have to play by Etsy’s rules when it comes to selling on their platform, you have some freedom when it comes to creating your own refund policies.

That’s why it’s important you specify which listings are eligible for a refund and which aren’t.

Double-down on listing photos

If your product isn’t described accurately, there will no doubt be an increase in the number of refund requests you receive.

To counter this, we recommend that you up your photo game, and take more descriptive photos of detailed and intricate parts of your product.

If you sell vintage products, this is a must. Any flaw, nick, or ding that isn’t accurately represented in your product description or listing photos could result in a case against your shop.

With all other products, it’s equally important to ensure your listing photos accurately represent your product.

Tweak your copy

Update your product descriptions to explain more detailed workings of your product in the same way that your new photos show off those complexities.

You’ll help fight potential “not as described” refund cases.

If you describe your product accurately, you have a strong case against buyers attempting to abuse the purchase protection policy.

Get insurance for higher value orders

If you’re not a fan of this new policy, or even if you are, it wouldn’t hurt to explore third-party shipping insurance if your average order value is around or over that $250 mark.

For the long run of your business, it usually makes sense to protect your product when it’s in the hands of someone other than yourself. Until it gets to its final destination, you never know what can go wrong.

You may not use this insurance much, but if it makes financial sense to avoid future losses, this might be something you want to consider.


Etsy’s new Purchase Protection program is a $25M investment in making the marketplace more attractive to buyers. It also makes it easier for sellers to create a business, knowing that if their product is damaged, they’ll get their money back, as will the customer. 

However, it may take a few months for Etsy’s staff to iron out the kinks in the policy and get everything running smoother.

Until then, and as always, the best thing you can do to protect your back pocket is to ensure that your shop policies, shipping methods, and product descriptions are watertight.

Grow your online business, develop your SEO, and launch your sales into the stratosphere.

Read The Squeeze each week to see what’s new with Etsy and the growing industry of eCommerce. There’s a lot of noise out there getting in the way of your success. Cut to the chase with tips and tricks you can implement in your business right now. Let The Squeeze be your guide.


Need help getting your products found on Etsy?

Improve your Etsy SEO with free Marmalead tools, designed to take your handmade business to the next level.

Get the FREE Tools


3 replies on “What Etsy’s Purchase Protection Program Really Means for Sellers”

Insurance is not paid if the item is shown as delivered. Lost watch and all my money. Thanks ETSY. What do I do as a seller now?

Hi Prie — did Etsy provide a reason for the refund? Arrived damaged? Didn’t match the description? If the item was marked as delivered but didn’t arrive, you should let the buyer know they need to open a case with the shipping carrier. If a buyer ever reaches out to you, make sure you respond back to them within 48 hours. Typically, an open case with the shipping company doesn’t amount to much — but it at least leaves a paper trail for the buyer. If the item was stolen from their porch and you purchased additional shipping insurance, the insured value of the good and the shipping cost would typically be covered.

Double-check your insurance coverage with the shipping carrier you used – file a claim if you haven’t already done so. If you can get reimbursed through your shipping insurance, that is your best bet to recoup your costs. You can also try to reach back out to Etsy regarding the case your buyer opened. If you can find out why Etsy provided a refund, you can try to avoid whatever went wrong in the future.

Sellers are saying that the refund is automatic if the buyer says they didn’t receive the package, if the purchase is over $250. It doesn’t matter if the buyer signed for it, either. It looks like a human isn’t involved in the decision, it’s just software. The refund is practically instant as soon as the buyer files a case, so you know that humans aren’t looking it.

Leave a Reply