Etsy is launching a purchase protection program, investing $25M to cover refunds in some cases

Online marketplace Etsy is launching a new Purchase Protection program for buyers and sellers on its platform, the company announced on Monday. Starting August 1, buyers on Etsy will be eligible to receive a full refund for purchases that don’t match the item description, arrive damaged or don’t arrive at all.

The company says it also plans to invest at least $25 million per year into the purchase protection program to cover refunds on behalf of sellers for qualifying orders up to $250, at no additional cost to sellers. Etsy notes that the investment will enable sellers to keep their earnings from sales when things happen outside of their control.

“Easy issue resolution is a critical part of the e-commerce shopping experience, and our new Etsy Purchase Protection program aims to help make shopping on Etsy even more worry free,” said Etsy COO Raina Moskowitz in a statement. “This program will help buyers feel more confident when they shop from small businesses on Etsy, while we invest directly in our sellers to provide them an important layer of assurance.”

Etsy says today’s announcement is based on feedback from both buyers and sellers on its platform. The company also says it plans to continue to invest in product and customer service. Etsy previously announced that it expects to invest more than $50 million to enhance customer support. The company plans to grow its support team by more than 20%, improve its live chat support and reduce response times.

The launch of the purchase protection program comes a few months after more than 14,000 Etsy sellers went on strike as the platform increased its transaction fees from 5% to 6.5%. On its website, Etsy says the increased fee supports its plans to make “significant investments in marketing, seller tools, and creating a world-class customer experience.”