Foundry Law Group Blog

A Guide to Etsy’s Terms of Use

In our previous blog post on Etsy, we covered key business considerations to keep in mind when starting an Etsy shop. And we went over some ideas for marketing using social networking and provided useful tools to help expand your visibility on Etsy. This blog is going to focus on your rights and obligations as an Etsy Shop Owner.

First, let’s examine Etsy’s requirements for selling and maintaining a shop. Then, move on to discussing Etsy’s Terms of Use regarding liability. Lastly, we will go over Etsy’s intellectual property policies.

Shop Requirements

Here is a list of things you should know before you sign up for an Etsy Account:

1. What are you allowed to sell on Etsy? Etsy provides a forum for the sale of handmade items, commercial and handmade crafting supplies, and vintage items. It does not allow the sale or re-sale of items that do not belong within the above stated categories. Please note that (1) Items sold as vintage must be 20 years or older; (2) Handmade means hand-assembled or significant alteration of a vintage item; and (3) handmade goods must be made either by the shop owner, artisans who collaborate together, multiple artisans selling through the same shop, or by a member of the shop owner’s household (a family member or close friend).

2. What information does Etsy collect? While it is free to register for an Etsy account, and become a “Shop Owner.” The Shop Owner is required to have a credit card on file for verification purposes or a valid PayPal account. Etsy also asks for the Shop Owner’s billing address, phone number, and a valid email address. Please review Etsy’s privacy policy for additional information on how the information is stored and collected.

3. Creating your Username: Usernames must be appropriate, not profane or offensive. The word “Etsy” cannot be a part of the username without permission. Etsy usernames are nearly permanent and can only be changed at Etsy’s discretion under limited circumstances.

4. How does Etsy make money? Etsy collects $0.20 (USD) from the Shop Owner for listing one quantity per item in a “shop”, the listing is good for a 4-month period. Upon the sale of an item, customers pay the Shop Owner (seller of the good) directly and the Shop Owner then pays Etsy a transaction fee. The transaction fee is 3.5% of the item’s sale price (this excludes shipping costs). Etsy issues monthly billing statements to the Shop Owner’s via email and through the website. Late payments could result in suspension and/or termination of account privileges. Click here to learn more about Etsy’s fees.

5. What else should a Shop Owner know about listing an item on Etsy? When a Shop Owner lists an item on Etsy this means two things (1) that the Shop Owner has agreed to abide by Etsy’s policies and (2) the Shop Owner has the legal authority to sell the item listed. Etsy’s policies require that the listings and descriptions are accurate, shipping and handling fees are reasonable, and that all sales are binding. In addition, Shop Owners are responsible for articulating their own shop policies for shipping, returns, payment, etc. Please note that Etsy does reserve the right to request modifications to the shop policies. These terms are Etsy’s way of telling you the “Shop Owner” that you are going to be responsible for your items, transactions, behavior, shop policies, etc. while in engaging in Etsy’s forum.

6. Can I sell my Etsy account? Etsy does not allow individuals or business entities to transfer or sell an Etsy account and/or User ID. Etsy instead encourages sellers to use other appropriate legal channels that one would normally use in the sale or transfer of a business (i.e buy/sell agreements) Also, sellers are prohibited from using the ‘shops’ to redirect traffic to another website or sales location, or cross post items listed as “unique” on more than one Etsy shop.

Etsy’s Terms of Use

Etsy holds itself out as a venue/channel that allows users to engage in the sale and purchase of handmade and vintage goods that comply with Etsy’s policies. Etsy is simply providing the venue for such activity and thus does not take on any liability with regard to the listing, the transactions, content, user behavior, etc. The Terms of Use states that it has no direct involvement or control over the listings or transactions. Etsy does not prescreen users, content, images, or other information that has been provided by its users. Esty does not provide any guarantee as to the user’s identity or that the transaction itself will be completed. Etsy is in no way involved with transferring legal ownership of an item from the seller to the buyer.

You are basically going to be using Etsy at your own risk! However, don’t let that turn you away as Etsy is a great venue and has been extraordinarily helping Creative Entrepreneurs display and sell their items and for some grow their business. I encourage you to consider the following when using Etsy:

1. Trust your gut. If something doesn’t feel right about a transaction then something probably isn’t right.
2. Report behavior that you think is not appropriate (i.e. obscene images, unsolicited marketing, spam, etc.) especially if you feel that someone is stealing another’s idea or copyright.
3. If you feel that something you are about to post on Etsy may include someone else’s copyright or trademark: GET PERMISSION in writing!!! Or don’t post it at all until you have consulted with a trusted attorney.
4. Feel free to use third party user verification services or escrow services.
5. Always be honest and accurate with the description of your listings and other information about the items.
6. Review Etsy’s terms of use; Do’s and Don’t’s; Privacy Policy and their Intellectual Property Policy. If there is something you don’t understand feel free to leave a question in the comments section and I will do my best to answer your question.

A few more things you should know about Etsy’s Terms of Use:

1. Etsy views the relationship between users and the site as an independent contractor relationship which means that Etsy DOES NOT intend to create any employer/employee, joint-venture, or other similar arrangement with its users.
2. Etsy does not guarantee uninterrupted site access, service, and operation.
3. The Terms of Use contains an indemnification clause that basically means that if Etsy is pulled into a lawsuit, judgment, complaint, etc. as a result of the Shop Owner’s listing, transaction, or for any other reason related to the Shop Owner’s activity, then the Shop Owner agrees to indemnify (i.e. pay back) Etsy for its costs (i.e. settlement amounts, attorney’s fees, etc) involved in handling the matter.

Etsy’s Trademark Guidelines

You can use Etsy and your shop URL to promote your business, refer to it, or make commentary about Etsy. However, you cannot use the Etsy name, its trademark (it’s logo), and its trade dress (look and feel of the site) in materials to promote your shop. In other words, refrain from making any representations that would cause a third party to think your shop was endorsed, owned, or run by Etsy. Using the term “Etsy” or something confusingly similar as your business name, username, or for marketing without Etsy’s permission violates its trademark policy.

Etsy Copyright and Intellectual Property Policy

Under the Digital Millennium Copyright Act (DMCA), if someone sends Etsy a DMCA takedown notice in compliance with its procedure for reporting copyright or intellectual property infringement, it may remove the alleged infringing material. If another user is infringing on your copyrighted work by reproducing, distributing, or using it to create a derivative work, you may contact Etsy to make a complaint or issue a takedown notice.

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