Services|December 7, 2011| Author: Kim LaCapria|Tags: ,

Regretsy, PayPal Debacle Day Two: PayPal Backs Down?

regretsy paypal secret santa

One of the basic known ‘things’ about PayPal is that once they’ve frozen your cash, it’s kind of under a tundra of suck where you won’t see it for at least six months, if at all.

Which is why everyone was so seriously bummed by the Regretsy Secret Santa debacle where PayPal basically told the craft snark blog that the cash their users donated to give hundreds of disadvantaged kids a better Christmas was going into PayPal purgatory, no matter what anyone said or did, no fixing it. Regretsy was given the option of being able to manually refund the small donations to the thousands of donors, but no way was PayPal gonna let people buy presents for other people at Christmas. (The payment processing service did say that if the funds were for a sick cat, that would be different.)

Reaction was swift and intense across the blogosphere and social media- the story flitted across thousands of News Feeds as Regretsy’s angry army of craft-aficionados tore into PayPal harder than that chick who hot glue guns the Hobby Lobby octopus onto a tissue box and calls it Steampunk. And in an interesting turn of events, PayPal actually addressed the debacle, rather than digging their heels in and saying essentially, “u mad, Regretsy bros?”

In a blog post on the official PayPal blog, Director of Communications Anuj Nayar says:

Just like anyone else, we believe strongly in helping those in need, especially around the holiday season. We are working with Regretsy to make a donation to help their cause, and we’re truly sorry this occurred… For background, we have clear guidelines for any business that uses PayPal to accept donations. For example, we require certain documentation to prevent misuse of the donated funds and, if the recipient claims charitable status, to determine whether they are properly registered. We do this to protect our customers and to protect our business.  As a regulated payment service, we’re also required by law to follow these guidelines.

Nayar continues:

We appreciate that this can be an inconvenience, but we have a responsibility to all our customers – both donors and recipients; and buyers and sellers. In this instance, we recognized our error and moved as swiftly as possible to fix it.

While it’s very nice that PayPal did somewhat resolve the situation- so it seems- there are two problems with their response. One, that it occurred in the first place, and that they would have walked off with hefty processing fees after not providing a service they’d promised. The second and more worrying one, of course, is that Regretsy has a big following and massive pull. Had the blog not been able to garner such interest in the tale of the PayPal Grinch, it’s likely the people behind the project would have been out of luck and money. Have you been on the wrong side of PayPal’s arbitrary policies before?