PayPal: The Grinch that stole Christmas

Tue, 6th December 2011, 14:16

A server over  at  web host Hostropolis may be contending with a little extra load today after the latest stunt by “when is this company going to die” Paypal began to be crowd sourced.

The slightly irreverent but charitable community at decided to share some cheer by trying to buy Christmas presents for kids. Almost like Santa and his elves, they took lots of applications, vetted them carefully and set about creating a giant gift exchange program, where you could buy a gift for the over 200 children that may have been naughty or nice, but were in need of being helped regardless!

After the fund raising they found themselves in the enviable position of not just being able to send toys, but to send a monetary gift to the families as well. A little extra Christmas cheer that  may have helped make a holiday dinners more special, or maybe just pay a pressing bill.


“Donate” buttons have been used by numerous small community organizations, startups, and web developers for years yet Paypal is now claiming they are only for nonprofit organizations to use. Paypal has now frozen the account!

Regretsy 's Helen Killer says:

After a very long and jaw-dropping conversation with an incredibly condescending representative, they have decided that I must refund all the donations and purchases that have not been processed.

Regretsy highlights of the conversation

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.

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: I’m not going to argue with you.

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.

At this point, Helen asked to speak to a supervisor and was told that “No one above me will talk to you. No one at my level ever makes phone calls. We’re only doing this to help you.” … Well how could you argue with that logic. PayPal is being nice!

When she asked how to close my account, he said she had to “refund everything, write a letter saying you understood what you did WAS WRONG AND YOU WILL NEVER DO IT AGAIN, and then request permission to close your account.”

Then, for good measure, they froze her personal account, which has revenue from book sales, e-books and all the other Finnish Folktales Swag. They’ll be holding that money for 6 months.


$ They allowed me to use a donate button, and got a portion of the donations
$ Then made me return the donations, and kept a portion of the fees on the donations
$ They allowed me to use a Buy Now button to sell gifts individually, and got a portion of those sales
$ Then made me return the sales, and kept a portion of the fees on the sales
$ They processed the toy purchases, and made fees on that

Wanna tell Paypal how you feel? Here’s a list of every administrative Paypal email address and phone number The Consumerist was able to find.

Isn't PayPal owned by eBay?

Also check out a prior post... Risk losing Revenue if you don't offer Paypal alternatives