PayPal PR mess: Company slammed for freezing Regretsy account

Twitter was up in arms Tuesday over PayPal’s apparent blocking of the popular blog’s efforts to set up a holiday gift exchange.

Most of the time, Regretsy is a place to get a few yuks over a disastrously ugly or tasteless piece of merchandise.

On Dec. 1, the site announced a plan to do a little more, organizing a gift drive for about 200 children in the blog’s community who wouldn’t otherwise get much for the holidays.

It almost didn’t happen. In a Monday post, the site’s operator (who writes under the pseudonym Helen Killer) explained that PayPal had frozen her accounts on its site because of what its representatives said was an improper use of the “donate” button.

It’s supposed to only be for nonprofits, they said.

Further, Regretsy would have to start a new website to provide the toys to the kids involved in the drive. Plus, PayPal wouldn’t allow Regretsy to send the toys to anyone but the named buyer. All the while, the online payment service kept fees on donations and toy sales.

In response, Regretsy pointed readers to a list of PayPal email addresses and phone numbers, and a fan combed through the company’s various policies. Regretsy was briefly a trending topic on Twitter Tuesday, as the link to its blog post spread through social media circles.

PayPal piped in with an apology in a Tuesday blog post:

“Though we can’t comment specifically on the account due to our privacy policy, we can confirm that the funds have been released and we are working directly with the account holder on this matter,” wrote Communications Director Anuj Nayar. “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.”

However, PayPal’s blog post doubles down on the company’s position that companies accepting charitable contributions need to prove they’re registered charities.

“We do this to protect our customers and to protect our business,” Nayar wrote. “As a regulated payment service, we’re also required by law to follow these guidelines.”

No word on whether they’re keeping those fees.

Matt Wilson is a staff writer at Ragan Communications.

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