Etsy Seller Policies & Key Updates for 2025
Etsy sellers face a rapidly evolving compliance landscape in 2025. From GPSR product safety rules for EU listings, to stricter identity verification checks via Persona, and longer new seller payout holds, the changes are significant. Understanding Etsy’s updated fees, prohibited items, suspension policies, and trust & safety enforcement is essential for shop owners who want to stay compliant, avoid costly mistakes, and protect their accounts from suspension.
Foundational Etsy Policies Every Seller Must Master
Identity Verification via Persona
To reduce fraud, Etsy requires most new sellers to complete a live selfie–ID verification through Persona before activating selling privileges. Sellers in the EU and UK face additional identity compliance rules due to regional financial regulations.
Etsy Fees & Shop Setup Charge
Etsy continues to charge a $0.20 USD listing fee, a 6.5% transaction fee on item price plus shipping, and country-specific payment processing fees. A one-time setup fee, first introduced in 2024, remains in effect for all new shops in 2025.
New Seller Payout Holds
Etsy places rolling payout holds of 14–20 business days for up to six months on new sellers. This policy helps Etsy verify performance history and prevent fraudulent transactions, but it also means shop owners must plan for delayed cash flow.
Trust & Safety Enforcement
Etsy’s Trust & Safety team is removing prohibited items aggressively. Intellectual property violations and adult product restrictions are a major focus, including the July 2024 ban on insertable sex toys and sexually explicit images. Repeat violators face permanent suspension.
Key 2025 Etsy Updates & Focus Areas
- GPSR Product Safety Compliance: All sellers shipping to EU/EEA must provide a Responsible Person’s contact details and upload product safety documentation.
- Upgraded Shop Tools: New bulk photo editor, AI-powered background remover, and streamlined Shop Manager dashboard.
- Enhanced Seller Support: Priority chat and phone support now rolling out for Star Sellers and shops exceeding $20,000 in annual sales.
- Global Regulation Tracking: Etsy guides now cover UK Plastic Packaging Tax, Australian GST thresholds, and expanded US state sales tax rules.
Watch this video breakdown of the most important Etsy policy changes for 2025.
Seven Steps to Keep Your Etsy Shop Compliant in 2025
- Review Etsy’s Fees & Payments Policy and Prohibited Items Policy every quarter.
- Submit Persona ID verification as soon as requested to prevent payout delays.
- Add GPSR Responsible Person details on EU-bound listings and maintain product safety documentation.
- Avoid trademark infringement and medical claims in your keywords or product titles.
- Ship on time and upload tracking to maintain Star Seller status.
- Plan around Etsy’s rolling payout holds to manage cash flow effectively.
- Set up Google Alerts for “Etsy policy update” to react quickly to changes.
Etsy Frequently Asked Questions (2025)
Welcome to the most comprehensive Etsy FAQ resource for 2025. Whether you’re a new seller wondering about Etsy fees, a shop owner concerned about payout holds, or an experienced merchant navigating GPSR compliance, this guide answers the most common and complex questions Etsy sellers ask every day. Our goal is to help you stay compliant, avoid suspension, and maximize your success on Etsy.
Top Etsy Questions in 2025
Sellers most often ask about fees, payout holds and reserves, GPSR for EU buyers, prohibited items, Persona identity checks, and suspension appeals. We’ve expanded each topic below and added regulatory specifics (EU/UK VAT & IOSS, digital-download refunds, DMCA/IP takedowns, cases & ODR, and more).
Etsy Frequently Asked Questions (FAQ)
Etsy charges a $0.20 listing fee per item, a 6.5% transaction fee on the item price plus shipping, country-specific payment processing fees, and a one-time new shop setup fee introduced in 2024. If you participate in Offsite Ads, additional advertising fees apply.
Etsy imposes payout holds of 14–20 business days for new sellers, potentially lasting up to 180 days, to verify sales and reduce fraud. Holds can also occur due to disputes, policy violations, risk flags, or incomplete ID verification.
Etsy bans counterfeit goods, trademark-infringing products, regulated medical devices, explicit adult products (including insertable sex toys banned since July 2024), and restricted animal products. Violations can lead to removals or permanent suspension.
Go to Shop Manager → Dashboard → Account Status and select “File an appeal”. Provide detailed evidence, affected order numbers, and corrective measures you have taken. Complex cases benefit from attorney-supervised help.
GPSR (EU General Product Safety Regulation) requires sellers shipping to EU/EEA countries to appoint a Responsible Person and maintain/upload product safety documentation. Etsy added compliance fields in 2025; non-compliance risks delisting or account action.
Complete a live selfie and government-issued ID check via Persona. This is required before payouts are released and supports EU/UK financial compliance.
Maintain at least 95% on-time shipments, 95%+ message response rate in 24 hours, and a 4.8+ review average. Benefits can include priority placement and enhanced support.
Etsy allows handmade items, vintage (20+ years), and craft supplies. Dropshipping or mass-produced goods are prohibited unless you directly control design and production and meet Etsy’s Handmade Policy disclosures.
Review Etsy policies quarterly, verify identity promptly, avoid prohibited items and IP risks, ship on time with tracking, and maintain clear communications. Keep accurate listings and proofs of compliance (e.g., safety docs, invoices).
Offsite Ads charge a percentage fee only when an ad-click converts within a set attribution window. Large shops may be required to participate. Smaller shops can usually opt out in Settings → Advertising & Marketing → Offsite Ads.
Payout holds delay disbursements on a rolling basis (common for new shops). Reserves set aside a portion of funds for a period (e.g., delivery + buffer) to cover chargebacks/disputes. Both reduce cash flow; keep on-time delivery and tracking to reduce risk flags.
Depending on product type and routing: many goods require CE/UKCA conformity; Etsy may collect/remit VAT via IOSS for low-value EU imports; UK orders may require a GB VAT number or marketplace collection. Always reflect correct tax settings and include required safety markings and documentation.
Etsy policy allows sellers to set their own return rules for digital goods unless local law mandates a refund right. Clearly disclose license terms, permitted uses, and whether custom digital orders are refundable.
Rights owners can submit a DMCA notice for infringing content. Sellers may submit a counter-notice if they believe content was removed in error. Provide proof of original work or license. Repeat IP strikes can trigger account action—consult counsel before filing counter-DMCA.
Re-attempt with good lighting and a valid, uncropped ID. Ensure the legal name/address match banking details. Contact Etsy support if repeated failures occur; unresolved verification issues can pause selling and payouts.
A high volume of Cases (non-delivery, not-as-described) or late responses can raise your ODR and lead to search suppression, reserves, or account restrictions. Prevent with clear photos, accurate descriptions, realistic processing times, and tracked shipping.
Yes—if each shop is transparent about its purpose and you disclose related shops per Etsy rules. Using multiple shops to evade restrictions or duplicate listings violates policy and risks deactivation of all linked shops.
Handmade sellers must disclose production partners involved in making items, specifying your role in design vs. manufacturing. Omissions or misrepresentation (e.g., mass-produced goods listed as handmade) can cause removals or suspension.
- Candles: CLP/IFRA labels, hazard statements, proper containers, burn tests.
- Cosmetics: INCI labeling, CPSR/Responsible Person (EU/UK), ingredient restrictions.
- Toys: EN71/ASTM testing, CE/UKCA, age grading and warnings.
- Electronics: CE/UKCA, EMC/LVD safety reports; proper chargers and country plugs.
Keep test reports, SDS, and traceability on file; upload where Etsy requests.
Sellers set policies within Etsy’s framework and local laws. EU/UK buyers may have statutory return rights. Custom or perishable goods are often excluded—state exceptions clearly. Process refunds in the Orders & Shipping tab and keep buyers informed to prevent Cases.
Not without permission. Using others’ trademarks to sell related goods is risky and commonly triggers takedowns. Use generic descriptors; avoid implying affiliation. Keep licenses/permissions on file and ready to show.
Late shipping and missing/invalid tracking harm buyer trust signals and Star Seller eligibility and can lead to reserves. Use realistic processing times, scan-based tracking, and proactive messages for any carrier disruptions.
Release typically follows successful delivery + a buffer window, or when account risk metrics improve. Large spikes in orders, chargebacks, or policy flags can prolong holds—stabilize performance and provide tracking on every order.
Often yes—many jurisdictions exempt customized goods from standard return rights. Disclose personalization proofs, approval steps, and cancellation cutoffs pre-production to reduce disputes.
Include a concise summary of the issue, root-cause analysis, corrective actions (policy fixes, disclosures, testing/docs, ID completion), proof (invoices, test reports), and monitoring steps. Avoid emotional language; focus on compliance and buyer safety.
Use Help Center → Contact support from a logged-in account. Provide order IDs, photos, and docs up front. Maintain a single, clear ticket; repeated duplicate tickets can slow resolution. Star Sellers may see faster chat/phone options.
Yes, but you must own rights to the content you sell and comply with IP laws. Avoid training-data lookalikes that mimic specific artists/brands. Disclose process if relevant to Handmade policy and ensure print partners are listed as production partners.
In the U.S., payment processors may issue a 1099-K when federal or state thresholds are met. For EU/UK/AU, Etsy may collect/remit VAT/GST for certain orders; set your tax settings correctly and consult a tax professional for nexus and filings.
Etsy tightened adult-content rules; insertable sex toys and explicit imagery have been banned since 2024. Other adult items face strict listing/photo guidelines. Violations quickly trigger removals and enforcement.
Yes—set realistic processing times and communicate production milestones. Avoid preorders that exceed policy limits without clear disclosure. Long timelines increase buyer anxiety and Case risk—send status messages and proofs.
Funds may be held during investigation or until deliveries complete. Provide tracking and respond to tickets promptly. If permanently deactivated, funds are usually released after disputes/chargebacks windows close unless prohibited by law or policy violations.
Design original products, use licensed assets only, avoid brand names/logos, and keep licenses and proofs. For fan art, avoid confusion with official merchandise and respect trademark and right-of-publicity laws.
Use multiple angles, size charts, material lists, care instructions, and color-variance notes. Show scale, packaging, and any personalization proofs. Accurate descriptions and timelines lower Case rates.
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