Etsy Bungles CO Delivery Fee Implementation; Sellers Can't Cancel Orders From The State
Etsy announced last month that they would finally begin collecting and remitting Colorado Retail Delivery Fees, but sellers say the company has bungled the implementation, leaving them unable to cancel orders from that state.
The odds of a smooth transition were already not in Etsy's favor, considering they are over 2 years late in complying with their legal obligations as a marketplace facilitator - the Colorado Retail Delivery Fee was passed and went into effect in July 2022.
Liz Morton
The current fee is $0.29 per order shipped into the state and it appears, unlike eBay, Etsy is at least correctly showing that fee stated separately from the regular sales tax.
However, in setting checkout up correctly to comply with that requirement, Etsy seems to have created a different problem - sellers say they are unable to cancel orders from Colorado if needed because the $0.29 delivery fee is not refunded along with the rest of the order, leaving an open balance amount that prevents cancellation.
KaralineCountryHome
Has Etsy's technical support team been made aware that cannot cancel orders? When canceling, the system shows a notification: "Hm, looks like it's taking longer than usual to cancel this order. Please check back in a few minutes - if the order isn't canceled, give it another try or contact Etsy Support".
This goes on for several days, and of course the customer can become more than disgruntled.
I wrote to Etsy support, but I get an automated response with the cancellation steps I already know.
Is this technical error being addressed?
Another seller asked if that order was from Colorado and the original poster confirmed it was.
ChikiBird
I have cancelled an order 3 times. It's still showing up on my order page with the "overdue shipping" above it.
I have not heard back from my customer. I did message her in addition to the message with the cancelations (again, 3 times).
What do I do? How can I resolve this? I don't have the item in stock.
This seller also later confirmed the order in question was from Colorado.
MemorableWedding
I canceled an order for a customer today in Colorado per her request but the order is still showing as an open order with a .29 cent balance. I have no way to refund the 29 cent "retail delivery fee" on my end.
How is this being handled? It is still showing as an open order with a ship date of the 16th so if this is not cleared out by the 16th it will look as if I am late on this order when in fact I canceled it.
In each post, sellers are being told to contact Etsy support to request for them to force the full refund/cancellation - though it's not clear if support is also doing anything to make sure affected sellers are not having erroneous late shipments counted against them (some posts on the topic are not accessible due to Etsy's decision to hide most community areas from the public earlier this year.)
Oddly, Etsy's Help page about the Colorado Delivery Fee says this shouldn't be a problem because the fee will be refunded as long as the cancellation is processed before the order is shipped.
But that's clearly not how their systems are working in practice and that could cause even more issues for Etsy because of how the Colorado Department of Revenue says to handle the fee in case of refunds.
The fee is not refundable on returns of shipped items, but is refundable if a full refund of purchase price, delivery fee, and sales tax is processed to the buyer.
However, a retailer may claim a credit for previously paid Retail Delivery Fees for any retail sale that was canceled before the item was shipped if the retailer refunded to the purchaser the full purchase price, the Retail Delivery Fees, and any applicable Sales Tax.
However, it's important to note that in such a case, the retailer (or marketplace facilitator in this case) would have to claim those overpaid fees as credits when they remit their regular tax and fee filing to the Colorado Department of Revenue, which complicates the process and leaves Etsy having to front that amount back to buyers and do all of the accounting and bookkeeping required to track the refund and claim those credits.
That may explain one reason why eBay decided to incorrectly lump the Retail Delivery fee in with the sales tax amount, even though the Colorado law explicitly says it must be stated separately from all other amounts - maybe they couldn't or didn't want to figure out a way to deal with the complexities that Etsy is currently facing?
If you're having problems cancelling Etsy orders to Colorado, I'd love to hear about your experience and what support is doing (or not doing) to help - leave a comment below or contact VAR!
