Etsy is cracking down on coupon misuse

Etsy, which was founded in 2005, reached an “all-time high” of 92 million active buyers in 2023, according to its fourth-quarter earnings.

For years, Etsy has offered two types of coupons. The first, called Etsy Coupons, are funded by Etsy and sent to certain buyers. These may include discounts like “10% off your next purchase.” The second, called Shop Coupons, are set up by individual sellers as part of their marketing campaigns. The two coupons Etsy is introducing changes to — the “thank you” and “abandoned cart” coupons — fall into the latter category. Etsy has traditionally used deals as a way to bring more customers onto the platform; last fall, it encouraged sellers to offer discounts earlier than ever for the holidays.

While these promotions can help build sales, Etsy codes aren’t meant to be used in perpetuity. However, sellers have found that customers are misusing coupons by passing them onto people or applying them to more than one order. Two sellers told Modern Retail they would welcome a change to Etsy’s existing coupon terms, with one remarking that expiration dates would give them “more control” over their shop.

The seller, who wished to remain anonymous, has sold tarot readings, crystals and handmade bracelets on Etsy since 2019. They typically offer a “thank you” code to new customers to use on their next order. However, the seller has seen users consistently apply the code to every single order, “even abusing it to some degree,” the seller told Modern Retail. “This makes me want to remove the discount code altogether,” they said.

Though these types of coupons are intended for repeat buyers, this merchant has seen first-time shoppers use them at checkout. The seller is unsure how the codes are getting passed around but speculated that friends might be sharing offers or that people are learning of deals from third-party coupon sites or browser extensions. This is a common occurrence on sites like Retail Me Not. At the time that this article was written, Retail Me Not offered coupons for both 10% and 30% off at certain merchants’ Etsy storefronts.

Carissa Hawkes, who sells handmade and reworked apparel and accessories, opened a storefront on Etsy about five years ago. Hawkes said she would like to be able to send out coupons for the holidays, then have them expire “after a week or two.” Putting expiration dates on coupons could actually help increase sales, in her view.

“I feel like buyers might forget about coupons because they last a long time,” Hawkes said. “If they had an expiration date, they would more likely buy sooner, because they would want to use it [the coupon] before it expires.”

The updated policy, sellers said, is a welcome change, especially after other recent moves by Etsy. In 2022, Etsy hiked transaction fees from 5% per sale to 6.5%, motivating some sellers to go on a temporary strike. Other sellers have threatened to leave the platform for competitors including Handmade.com and Michaels’ MakerPlace.

In forums on Reddit, Etsy sellers said they had asked the company to make updates to the coupon policy. One user wrote, “This should have been implemented day 1.” Another said, “I did one of their surveys like two or three weeks ago giving this exact feedback about thank you coupons being misused so I was shocked to see this announcement yesterday… It’s definitely encouraging to see our feedback isn’t just being ignored outright.”