Amazon asked by minister to justify temporarily withholding sellers' funds – BBC

The government has demanded answers from Amazon after its recent policy change led to hundreds of sellers unable to access their money.
In a letter seen by the BBC, small business minister Kevin Hollinrake asks the tech giant to explain how it will "mitigate" the impact on sellers.
One seller, Daniel Moore, who sells ink cartridges, says he has £263,000 locked and cannot pay his VAT bill.
Amazon said the policy change had affected a small number of sellers.
The letter from Mr Hollinrake was sent after the BBC spoke to several businesses who say the recent policy change leaves them unable to restock or pay staff and bills.
Amazon's recently amended policy is to hold back some money from sellers in case buyers demand a refund.
That leads to sellers not having access to their takings for around two weeks, although Amazon says the policy will only hold money from seven days from the delivery date.
This was implemented on 3 August across the UK and EU for sellers registered before August 2016. Amazon said some sellers should soon be able to access some of their funds.
But its email about the policy change was not seen by many EU and UK sellers, and in many cases was automatically sent to their junk folder.
The BBC has seen several complaints on Amazon's online seller forums saying the email was "not clear" that the withdrawals from their account that they are used to making on a daily basis would be blocked.
Sellers have complained that the temporary withholding of their funds is bringing their businesses close to collapse.
Mr Hollinrake took this issue up in his letter to John Boumphrey, the country manager for Amazon UK, as he wrote: "Given these complaints, I would be grateful if you could explain how Amazon intends to help mitigate the impact on its sellers of this change, as this is a challenging time for many small businesses who are already struggling with cashflow issues."
Marios Katz sells CDs and vinyl on Amazon and said he doubted that Mr Boumphrey would respond to the minister's letter. He told the BBC he was "shaken and panicked" by not having access to his takings.
He is concerned he will not be able to feed his family, as he is used to withdrawing money from his account as soon as he has earned it.
"They [Amazon] are a billionaire company – maybe they don't care, or maybe they don't know what is really happening," Mr Katzadded.
Mr Hollinrake wrote in his letter to Mr Boumphrey: "I am sure you will share my desire to ensure the livelihood of small businesses are not being jeopardised by Amazon's approach."
Daniel Moore, 48, has a business called Ink Jungle that sells ink cartridges and the reserve amount is increasing by £40,000 a day, he said.
"The value they will be holding from us is disproportionately high versus the potential refunds processed by customer returns or non-delivery," says Mr Moore.
He called Amazon's approach to its policy "dreadful", but called Mr Hollinrake's letter "a help" – although Daniel added he was "not expecting miracles".
A Cheltenham business that has been selling pet products for more than 10 years on Amazon told the BBC the company was holding £16,000 of its takings.
The business owner, who asked to remain anonymous, said of Mr Hollinrake's intervention: "I certainly welcome that news and I wait in anticipation to see what Amazon's response to this will be.
"Things were already tough enough with the cost-of-living crisis which not only affects costs at home but also in the workplace, with a host of price rises ranging from electricity to postage."
Online retail expert Martyn James said Amazon's policy shift shows the need for consumer law to "evolve and be updated" to prevent "dramatic impacts on people's lives with little to no consultation".
"The fact remains that we have strong laws in the UK that cover the rights of both buyers and sellers of goods and services – but only if you buy or sell goods directly", said Mr James.
He called for a single regulator for the entire retail industry, as well as a free ombudsman service that people can turn to if things go wrong.
Libby Pearson, 42, from Kent says many sellers did not know what was happening when their money was locked. She sells nutritional supplements and has been on Amazon since 2009.
She says Amazon has locked £700 of her money – and that every day more is being added to that amount, as sales continue.
She was used to withdrawing amounts daily from her Amazon account for the day-to-day running of the business, but says that is now totally disrupted.
"There was no clarity on which order is being held or when it will be released? I had to to ring HMRC saying I can't pay my VAT bill on time," Libby said.
An Amazon spokesperson said the policy change affected a "small number of sellers".
"We are listening to sellers' concerns and are in contact with those who have experienced a one-time cash flow disruption", the spokesperson added.
The issues are similar to those faced by Etsy sellers after that marketplace began withholding 75% of sellers' funds for around 45 days. Hundreds of sellers complained it was undermining their businesses.
Following a BBC report into the problem, Etsy reduced the amount it was withholding.
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