|| Author: Kim LaCapria|Tags: ,

Regretsy Takes on PayPal For Asinine Policies, Arbitrary Money Holding

regretsy paypal

Before we get into it, what you need to know is that this exchange is part of the brewing controversy surrounding Regretsy’s aborted initiative to purchase toys for needy kids. “You can use the donate button to raise money for a sick cat, but not poor people.

Being the only major player in the game, it’s a well-known annoyance for those who use the internet to make money that PayPal is- to put it charitably– a bit unreasonable. But a lot of the time it’s also the only way to transfer money without some big-bank involvement, and it handily makes it so you only need an email address to send funds, rather than routing numbers and account details, so most people tolerate it and hope they won’t be in the unlucky group of users that see their accounts frozen for no ostensible reason or otherwise land on the wrong side of PayPal’s often seemingly arbitrary policies.

So Regretsy- the blog that gently mocks amusing and or otherwise WTF Etsy pieces- put together a rather impressive and touching Secret Santa project to distribute toys and other funds to 200 or so needy children and even their families to make Christmas a bit brighter. You can see where this is going, right? After the Regretsy community got together, organized the whole shebang, collected the money and planned to distribute it, PayPal put the kibosh on the initiative because apparently the Regretsy Secret Santa project used the “Donate” button. Which is okay in circumstances known only to PayPal, but definitely not for getting Christmas toys to poor kids, because suck it, kids. 

It gets more surreal and frustrating when Regretsy tries to interface with PayPal and possible ameliorate the situation- the blog was good enough to share snippets of the conversation, which will make you wish you had the ability to punch someone over a standard broadband connection. I’m going to lift all four chunks from the Regretsy post, because all four are equally migraine inducing. First, the logic:

PAYPAL: Only a nonprofit can use the Donate button.
ME: That’s false. It says right in the PDF of instructions for the Donate button that it can be used for “worthy causes.”
PAYPAL: I haven’t seen that PDF. And what you’re doing is not a worthy cause, it’s charity.
ME: What’s the difference?
PAYPAL:You can use the donate button to raise money for a sick cat, but not poor people.

Additional logic:

ME: The problem is I’ve already bought all of these toys, so now I’m really in a position like any other merchant – which is to say, I have inventory I need to sell. Why can’t I sell them as gifts, like any other retailer?
PAYPAL: Don’t you think it would look suspicious if the same people bought them again?
ME: Why? These are my customers!
PAYPAL: If you wanted to do that, you’d have to start a new website.
ME: What? Why would I start a new website?

PayPal is not putting up with your “giving disadvantaged kids something to look forward to” nonsense, Regretsy:

PAYPAL: The only way you’d be allowed to sell these as gifts is if you sent them directly to the person who bought them. And we will track your shipments and make sure it goes to the buyer.
ME: That’s discriminatory! You don’t make other retailers send purchases to the buyer only, especially not at Christmas.
PAYPAL: No one but a nonprofit would send gifts to someone else on buyer’s behalf.
ME: What about Amazon?
PAYPAL:We know what you’re doing and we’re through playing games with you.

Because if there’s anything PayPal takes a hard-line stance against, it’s this:

PAYPAL: You say you’re selling these as gifts but there is no information as to what the gift is.
ME: People sell mystery gifts and grab bags all the time. What about sites where they say, let us choose for you?”
PAYPAL: It doesn’t say that on your site.
ME: Is that the problem? If I say it’s a mystery gift would that be sufficient?
PAYPAL:You aren’t going to be able to get around this. It’s too late, we know what you’re trying to do and we’re not going to let you do it.
ME: But there are hundreds of toys! Do you think it’s reasonable to create a drop down menu for hundreds of gifts, all of them different, and create an inventory for each as “one?” So that every time one sells, it’s sold out, and the customer has to keep choosing options and going through check out to see if they can find a gift that’s still available?
PAYPAL: Yes, I think it’s reasonable.

Regretsy’s contact person was told that in order to cancel her account, she’d be forced to  “refund everything, write a letter saying [Regretsy] understood what [Regretsy] did WAS WRONG AND [Regretsy] WILL NEVER DO IT AGAIN, and then request permission to close [Regretsy’s Secret Santa] account.” The post also points out that PayPal profited from every one of the $2 transactions- thousands- processed as a result of the Regretsy Secret Santa project, without actually completing the transactions, and the kicker is that they suspended the user’s personal account as well, so her income from other projects is tied up.

Have you ever been on the receiving end of a PayPal clusterfracas? Were you able to get it resolved?