Etsy introduces purchase protection measures for both buyers and sellers

Following a controversial fee hike, it's investing $25 million in the program.

Mike Segar / Reuters

Online marketplace Etsy has unveiled a new purchase protection program designed to safeguard both buyers and sellers. Right now, you have limited options if something else goes wrong with a purchase — usually, Etsy will send you back to the seller and let you work out problems with them. Starting August 1st, though, buyers will get full refunds on purchases if they "don't match the item description, arrive damaged, or never arrive," Etsy wrote.

On the seller side, Etsy plans to invest at least $25 million per year to cover refunds for sellers on orders up to $250 for issues out of their control. "This program will help buyers feel more confident when they shop from businesses on Etsy, while we invest directly in our sellers to provide them an important layer of assurance," said Etsy CEO Raina Moskowitz in a statement.

Angry Etsy sellers recently went on strike over fee hikes and slow support response times. The company defended the increases by saying it would put the extra money back into the business rather than boosting profits. On top of the $25 million in purchase protection, it recently announced $50 million in spending to improve customer support. It promised to use that money to expand its team, improve live chat support and reduce response times.

"Etsy’s Purchase Protection program will complement our broad efforts to improve customer support, increase trust signals across the user experience, and maintain the integrity of our marketplace as a destination for unique and special items," said Moskowitz. Whether sellers will be convinced remains to be seen, however.