A Step-by-Step Guide on How to Close Your Etsy Shop Successfully

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It’s never easy to close a business. Whether it’s the emotional toll of saying goodbye to a beloved craft or the practical implications of winding up a shop, closing an Etsy store can be overwhelming. However, if you plan carefully and follow the right steps, you can shut your Etsy store with confidence and peace of mind. 

This step-by-step guide will walk you through closing your Etsy shop, from understanding the legal implications to completing the necessary paperwork. With guidance and preparation, you can close your Etsy shop successfully and move on to the next chapter of your life.

Before closing your Etsy shop, you should understand the legal implications of the process. Let’s break down some of them.

You cannot close your Etsy shop without giving the required notification period to your customers; otherwise, you could face legal action. 

If you have open transactions or unclosed sales in your Etsy account, you must complete them before closing your shop. It means you should communicate with your customers and suppliers and do it correctly to avoid any complications. 

If you have unfulfilled orders when you close your shop, you must either deliver them or issue a full refund to your customers. You are legally obligated to do this and can face the consequences if you fail to do so, including fines, lawsuits, and even criminal prosecution. 

If you have any outstanding bills or debts, you must settle these before you close the shop.

If you don’t want to close your business but just change your brand concept, you might want to consider changing your Etsy shop name.

Create a Timeline for Closing Your Shop

The first step in closing your Etsy shop is to create a clear and actionable timeline template. Any sudden or unexpected closures can result in bad reviews and impact your business negatively, so you should let your customers know well in advance that you will be closing the shop. The best period to give is one month before the closure date. 

You should inform your customers through an announcement on your shop homepage, emailing your customer base, or posting on social media. It is a good idea to include a message that thanks your customers for their support and gives a reason for closing the shop. You should also share your contact details to get in touch with any questions.

Check And Compile Necessary Details

The first thing to do when you decide to close your shop is to compile all of the necessary documentation ready and organized before you can do it:

  • Etsy transaction history

It’s necessary to verify that all transactions have been successfully closed. If any are still in progress, you must accept or cancel them.

  • Etsy payment history

You should have a record of all the Etsy payments from your customers.

  • Etsy fees

If you have any Etsy fees pending, you should have these documented.

  • Payment details

If customers were paying you through a third-party payment system – other than Etsy – you might need to have all the transaction details ready.

  • Listing and ordering information

You might also need a record of all listings and orders and any relevant information regarding them. It can be the title, description, and price for each listing. For each order, you might want to have the date of purchase, the method of payment, and the delivery details.

Close All Open Transactions

As mentioned above, closing any open transactions is critical. Otherwise, you’ll be unable to shut your Etsy store. 

You can verify that all transactions are closed by going to your Etsy account’s transaction history. If a transaction is still in progress, its status will remain open until completed. At this point, you might want to accept or cancel them as soon as possible to close them. 

If a customer makes an incorrect payment, there’s still a workaround. You can accept it and cancel the transaction by clicking the Cancel link that appears with it. You can also accept the incorrect payment and add a new transaction with the correct payment amount.

Refund Any Open Payments

If you have open payments, such as Etsy Fees or payment plans, you should refund these as soon as possible. 

You can do it in the Finances section of your Etsy account. Click the Payment Plan link for each payment plan that you have open. 

You can also go to the Fees section of your Etsy account and click the Cancel Fees link for any fees you wish to refund. 

You can use the Money section of your Etsy account to refund payments that are open. You can do it by clicking the Payments button in the top-right corner of your Etsy account and choosing Money. You can then click the Add a Payment button and select the payment you wish to refund. You should include a message that explains that you are refunding the payment because your shop is closing.

Deactivate Your Listings

If you have open listings, you might need to deactivate them not to generate additional fees. 

You can deactivate a listing by clicking the Deactivate link that appears next to the listing. 

You should also deactivate any scheduled land future listings that are still open. You can deactivate future listings by going to the Listing Manager and clicking the Deactivate button next to the listing date. 

You won’t have to pay any fees for deactivated listings, but deactivation will not refund the fees that have already been applied. You must do this manually by going to the Fees section of your Etsy account and clicking the Cancel Fees link for each fee you wish to refund.

Submit Your Closing Documents

You should submit all the necessary closing documents as soon as possible to ensure all your outstanding transactions are closed and the account is eligible for closure. They are as follows:

Tax information

You must provide your gross sales, income, and expenses from the last twelve months of operation. You can do this by going to the Finances section of your Etsy account and clicking Tax Information.

Proof of identity 

You should provide proof of your identity by uploading an image of your government-issued identification, such as a driver’s license or passport. You can do this by clicking the Account button in the top-right corner of your Etsy account and choosing Account Settings.

Manage Your Finances and Account

Before closing your Etsy account, you might want to monitor your finances to ensure they are all balanced and accurate. You can do this by going to the Finances section of your Etsy account and clicking the Account Summary link. Also, you might need to close any payment methods linked to your Etsy account, such as PayPal or Stripe.

Close Your Etsy Shop Account

Once you have deactivated all payment methods and taken care of any outstanding finances, you can close your Etsy shop account. You can do this by going to the Account Settings section of your Etsy account and clicking the Close Account button. You might need to verify your identity, so don’t forget to upload the necessary documents beforehand.


Closing your Etsy account may require some time and effort. You’ll have to verify all your financials, deactivate listings, close pending transactions, and more. However, if you have a step-by-step plan of what to do and check, closing your account can go pretty smoothly.

Are you an e-commerce business selling on Etsy? Should you like to improve your e-commerce accounting, feel free to schedule a free demo to understand how Synder can help you stay on top of accurate reporting, flawless reconciliation, and a smooth tax season.

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