Etsy is launching a purchase protection program

Etsy is launching a purchase protection program for shoppers and sellers, the company announced today. The program, which begins August 1st, will refund customers when an item arrives damaged, is missing, or doesn’t match the listing description.

Purchases under $250, including shipping and taxes, are covered by the program, according to the updated seller handbook. The company says it will put $25 million per year into the program to cover refunds and that it’s free for sellers to participate in the program.

“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,” Raina Moskowitz, Etsy’s chief operating officer, says in the press release.

For sellers, the program will allow them to keep their earnings when an item never arrives or if an item arrives but is damaged — although only the first instance of damage in a calendar year is covered. Under the existing policy, sellers aren’t responsible for missing packages, according to the handbook, but the new program more clearly lays out when Etsy will refund the buyer and could make the refund process more uniform.

In order to be eligible for purchase protection, sellers must ship purchases with tracking information and / or use a shipping label purchased on Etsy, have an estimated delivery date, and the listing details must be accurate, among other requirements.

Etsy says the purchase protection program is part of a broader effort “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.” For Etsy, giving shops and buyers a more uniform approach when there are purchase issues could also have the effect of further professionalizing the marketplace, in line with other platforms like eBay.

The program comes a few months after thousands of Etsy merchants went on strike over a list of complaints, including a recent hike in transaction fees for sellers. The company defended the most recent fee increase, saying it would allow Etsy to invest in things like customer support.