Starting an Etsy shop is exciting, but some new Etsy sellers get suspended within their first few weeks—often without warning. While the Etsy platform is a promising marketplace for artists, vintage collectors, and crafters, things can quickly turn into a nightmare when your shop gets suspended when you least expect it.
If you’ve spent time in the Etsy forums, you’ve probably seen stories of new Etsy sellers getting suspended unexpectedly.
X user @ama_a93 is one of the latest examples. After starting a shop and making successful sales, they woke up one day to find their Etsy shop suspended without explanation. Their appeal was denied in just four minutes, and Etsy even reported $5,000 in income to the IRS—money they never received.
dont open an etsy shop 😃 (1/4) pic.twitter.com/bLnG0WlRzF
— a 🗡️🍉 (@ama_a93) March 12, 2025
But @ama_a93 isn’t alone. Similar cases appear across X, Reddit, and the Etsy forums—with sellers reporting suspensions that they never saw coming. So why does this happen, and more importantly, how can you avoid falling into the same trap?
Let’s break it down.
5 Common Reasons Etsy Suspends New Sellers
Etsy’s automated fraud detection system is aggressive—especially if you’re a new Etsy seller at risk of suspension. And while Etsy claims this system protects buyers and ensures marketplace integrity, it often flags and suspends legitimate sellers. Here’s why.
#1. Etsy Places Reserves & Holds on High-Risk Shops
If Etsy detects a sudden influx of sales from a new seller, it may place a reserve on their funds—holding up to 75% of earnings for 45-90 days. This is meant to protect against fraud, but many sellers report that it cripples their cash flow and can eventually lead to suspension.
In X user @ama_a93’s case, they never received their funds, yet Etsy reported their sales as taxable income. Were the funds on hold? If so, for how long? We hope they get paid soon.
hi update: its good news and i have heard from etsy, i will explain more details later im communicating with etsy rn and want to have my thoughts clear before saying anything definitive publicly. thank you so so much everyone for the support and help 😀 https://t.co/aBFgPbJpfU
— a 🗡️🍉 (@ama_a93) March 13, 2025
On another note, Reddit user u/tale_of_two_wolves reported that after a strong sales month, Etsy froze their funds and suspended their shop. Why? They had a few cases opened against their account during an illness. But even after fixing it with their buyers, it wasn’t enough to keep their shop open.
How to Avoid Etsy Payment Holds
- List gradually: Start with a few listings and scale up to avoid Etsy flagging sudden activity.
- Have backup funds: Expect Etsy to hold up to 75% of sales for 45-90 days—don’t rely on instant payouts.
- Check payments daily: Monitor your Etsy Payment Account and contact support if a reserve is placed.
#2. Buyer Disputes & Etsy’s One-Sided Case Resolution
Etsy’s case resolution system heavily favors buyers. If a buyer files a dispute—whether about a non-delivery issue or product dissatisfaction—Etsy often rules in their favor, even when the seller has proof of shipment.
@ama_a93 had a buyer claim they did not receive their package, even though it was picked up by the post office just 20 minutes before the claim. Etsy sided with the buyer before @ama_a93 could respond.
Another seller on the Etsy forums shared that several buyer disputes led to their permanent ban, despite shipping all items on time.
How to Avoid Etsy Buyer Disputes
- Always use tracking: Even for cheap items, proof of shipment protects you.
- Respond fast: Quick replies reduce the chance of buyers filing disputes.
- Set honest timelines: Avoid delays by listing realistic processing and shipping times.
#3. Unclear Etsy Policies & Intellectual Property Issues
Many new sellers violate Etsy’s policies without realizing it. Etsy has strict rules about handmade items, digital downloads, and trademarked terms, and sellers aren’t always given warnings before their accounts are shut down.
A Reddit user in the comments of this thread reported that they were banned for selling historical scale models featuring swastikas—despite Etsy allowing other historical items with similar imagery (albeit, this is likely a touchy subject regarding historical memorabilia vs. recreations).
Another seller reported their vintage Christian Dior necklace was deactivated immediately, despite similar listings remaining on Etsy. Others shared similar experiences with vintage designer items being flagged. Some were later reinstated, but Etsy’s system seemed inconsistent.
How to Avoid Intellectual Property Issues on Etsy
- Avoid trademarked names like “Disney” or “Harry Potter” in titles, tags, and descriptions.
- For digital products, use only designs you fully own or have licensed rights to.
- Check for trademarks on logos, characters, or phrases before selling related items.
#4. Etsy’s Automated Fraud Detection is Unforgiving
Etsy uses automated systems to detect fraudulent activity, but these systems frequently misidentify legitimate sellers as scammers. This leads to immediate suspensions with little chance of appeal.
A new seller on Reddit posted about their shop being suspended within 24 hours of launching, despite following all the rules.
Another commenter on this Reddit thread, u/ItzPr0per says they just created an Etsy account, made a single digital download purchase, and got banned immediately.
How to Avoid Etsy’s Automated Fraud Detection
- Use consistent login locations and devices—VPNs can trigger suspensions.
- Avoid shared Wi-Fi that may be linked to previously banned accounts.
- Verify your bank account and ID as soon as possible to prevent issues.
- Make a few normal interactions before purchasing or listing to avoid being flagged as suspicious.
- Use the right tags for your listings to ensure your shop follows best practices and doesn’t look spammy. Check out our guide on the Best Tags for Etsy.
#5. Linked Accounts & Suspicious Activity
Etsy bans sellers who appear linked to a previously suspended account. This could be due to a shared payment method, shipping address, or IP address.
One seller reported that their account was suspended after their spouse logged in from a friend’s house—without realizing that the friend’s Etsy shop had previously been banned. Because the login came from the same IP as a suspended account, Etsy flagged and shut down the seller’s shop.
How to Avoid Etsy Flagging Your Account
- Use a dedicated bank account and device for your Etsy shop.
- Avoid logging into your account through shared Wi-Fi networks.
- Stick to one account per household to prevent Etsy from linking multiple accounts under the same IP.
- Limit logins to trusted networks and avoid frequent location changes—which can trigger security flags.
What to Do If Your Etsy Shop Gets Suspended
If Etsy suspends your shop, act fast but stay professional.
- Check your email for suspension notices—Etsy sometimes provides hints about the reasons why (although they should certainly provide more).
- Review Etsy’s seller policies to identify potential violations.
- File an appeal through Etsy’s Help Center.
- If rejected, blast them on social media—some sellers get better responses by calling out Etsy publicly.
What to Do If Your Etsy Shop Gets Suspended and You Can’t Log In to Appeal
Some sellers find themselves permanently suspended with no way to submit an appeal, as Etsy’s system requires them to be logged in to do so.
If this happens to you:
- 📨 Email Etsy Support Directly: Contact support@etsy.com with your shop details, a clear explanation of the situation, and any supporting evidence.
- 📞 Call Etsy Support: Dial +1 (844) 935-3879, though expect long wait times and possible redirection to email.
- 📲 Public Pressure on Social Media: Tag @Etsy on X and explain your situation. Some sellers have gotten responses this way.
- 🧑⚖️ Legal Action (Last Resort): Consult a lawyer to send a formal demand letter to Etsy’s legal department if you have substantial financial losses.
How to Protect Yourself Long-Term
Even if you follow all the rules, Etsy’s system can still flag you. Smart sellers diversify their sales channels, build up a large social media following, and take control of their customer base to avoid relying solely on Etsy.
- Set up a personal website (Shopify, WooCommerce, Big Cartel) to maintain full control over your online store.
- List products on other platforms (eBay, Amazon Handmade, Faire) to reduce dependency on a single marketplace.
- Build an email list so you can reach customers directly, even if your Etsy shop is suspended.
- Leverage social media (Instagram, TikTok, Pinterest) to drive traffic to your own site and other sales channels.
- Optimize your listings with Marmalead to make sure your shop is following best practices from day one—helping you avoid unnecessary red flags that could lead to suspension.
Over To You
If you’re a new Etsy seller suspended without warning, take action fast to protect your shop and avoid future risks. The best way to avoid losing your shop? Know the risks, take precautions, and never rely solely on Etsy for your business.
That said, Etsy continues to evolve, and as the marketplace grows, so does the need for fairer seller protections. With ongoing updates and seller feedback, we may see improvements in how Etsy handles account suspensions and disputes this year.
Have you experienced an Etsy suspension? Share your story in the comments!
And as always, happy selling!
