How To Cancel An Etsy Order As A Seller

By Scott Voelker •  Updated: 03/04/23 •  8 min read

Etsy is a popular e-commerce site where buyers can find vintage, hand-crafted items they wouldn't have otherwise found.  

These items can be customized and made to order, making them the perfect gift for someone.

However, sellers can sometimes find themselves in a position where they have to cancel an order. Perhaps the item is out of stock, or the buyer has requested them to cancel the order. This can be challenging for first-time sellers new to the platform, and knowing how to cancel an order properly can protect you and the buyer.

In this article, we will look at who can cancel a transaction, Etsys policies on cancellations, and the steps for canceling an order. 

Who Can Cancel An Order On Etsy?

Every transaction on Etsy involves two parties: the seller and the buyer. However, in the case involving order cancellations, a seller is the only party who can see the process through. 

However, buyers can initiate a cancellation request by contacting the seller and waiting for the seller to message them back. 

When a seller gets the message, they can respond to the cancellation request and begin the process. 

As an Etsy seller, it's essential that you have procedures in place when it comes to canceling orders. Determine whether you'll accept cancellations or not. However, remember to follow the legal guidelines of the country you are in. 

Why Would You Need to Cancel an Etsy Order?

When it comes to canceling an order, a seller can have a variety of reasons for why they've chosen to. These can range from the seller not having a particular reason to the seller not being able to fill the order. 

Here are a couple more reasons why an order cancellation may occur, 

Etsys Policy on Canceling an Order 

Etsy has the following guidelines in place that all cancellations must follow. Some of the policies include the following, 

Steps to Cancel an Order on the Etsy Website 

These are the steps to cancel an Etsy order as a seller on 

  1. Locate your Etsy shop manager on the dashboard
  2. Go to your orders tab and find the order that you want to cancel 
  3. Click on the three dots next to the order and click cancel  
  4. A pop-up window will appear, asking you to provide a reason for canceling the order. Choose the reason that you feel is most appropriate. Sometimes you won't find a 100% match for the reason why you're canceling an order. In this case, choose a cause that's closest to it.
  5.  Once done, Etsy automatically will send the buyer an email letting them know their order has been canceled. 

How to Cancel the Order on the App

Canceling an Etsy order on their website differs from canceling on the app. 

Go to the orders tab, and select the order you want to cancel. Tap on the three dots and choose to cancel the order. Doing this will cancel the order, and the amount will instantly be refunded to the customer.

The process is pretty straightforward, and the refund process will begin depending on the buyer's payment method. 

The refund process 

The refund process can vary depending on the payment method that you choose to use. 


If the buyer used PayPal as their preferred transaction method, the refund process isn’t automated. 

You, as the seller, have the responsibility to refund them manually. 

After you've canceled an order, you need to go back into Etsy and check the amount that you are required to refund and send it back to the buyer. 

Refunding shipping is optional if the buyer uses this payment method.

An important tip to remember is that you cannot issue a refund or cancel an order if it's still processing. You might have to wait 24-72 hours for the processing to be complete then you can get on with issuing the refund.

Etsy Payments 

If your buyer chose Etsy payments, the refund process is easier and straightforward. Once you cancel the order, the fees are automatically deposited to the buyer. 

However, if your Etys payments account has insufficient funds, the card on file will be charged the amount due for refund. The amount due is usually plus shipping when it's with Etsy payments.

*Note Don’t forget to request a refund for any unused shipping labels.

Communication With the Buyer 

Communication is an essential aspect of any business's continued evolution and development. This goes both ways.  Whether you’re the one who is canceling the order or if the buyer is the one who has requested that you cancel their order. 

If the buyer is the one who has requested that you cancel, it's always a good idea to inquire about their reason. 

If it was due to a misunderstanding or they need more clarification but are scared to ask, you can avoid losing their business with a simple follow-up. 

However, if you're the one who initiated the cancellation, keep these tips in mind, 

Suppose you’re in the process of canceling an order. In that case, it's essential that you communicate with the buyer (unless the buyer was harassing you)through Etsy messaging, letting them know you'll be unable to go through with the transaction. 

Be sure to apologize for the inconvenience caused, explain the reason for cancellation clearly and concisely, and offer alternatives or suggestions to another similar item in stock.

Through openly communicating with the buyer, you can avoid any negative reviews, and you're able to maintain a positive relationship.

Procedures to have in place for a smooth process for canceled orders 

Does Etsy Penalize Sellers for Canceling an Order?

Etsy doesn't penalize sellers in any form or shape according to them, whether that be in search engine rankings or penalizing the shop. 

Meaning sellers shouldn't be afraid to cancel an order for any legitimate reason they may have. 

However, suppose your store has been canceling many orders and getting a ton of negative reviews. In that case, your ranking might get affected, and customers may be more hesitant to purchase anything from your shop. 

Will you be charged a fee when you cancel an Etsy order?

No fees are charged to the sellers when they cancel an order. All the transaction and listing fees are refunded to your payment account.

However, if the payment was done through a platform like Paypal, they may charge you a minimal fee. This is Paypal that charges you the fee and not Etsy. 

Can a customer leave a review after you've canceled an order?

Buyers have up to 48 hours to leave a review when they cancel an order. However, after the 48 hours lapse, the buyer won't be able to leave a review of the shop. 

If a customer leaves a review that isn’t a reflection of the process, a seller may opt to either report the review to Etsy if the review violates Etys TOS (terms of service) or reply to it. 

Quick Recap

Canceling an order is never ideal; however, at times, it's necessary. Not only for you as a seller but for the buyer as well.

With the steps we have outlined above, you will be able to handle the cancellations in a professional and respectful manner, and you can be on your way to creating lasting relationships with your customers. 

Remember to prioritize the buyers' experience and protect your reputation as a seller.

Scott Voelker

Over the years I’ve helped thousands of people TAKE ACTION to UNLOCK their true potential on building their ultimate freedom business, by developing the skills to make them resilient, confident and FUTURE PROOF. I’ve clocked my 10,000 hours over the years working in the trenches myself and helping others build and grow their brands. I know the power in TAKING ACTION better than anyone and I’ve seen people lives changed as a result of it...including my OWN!