PayPal Is Latest Case Study of “Don’t Piss Off the Internet”

“You can use the donate button to raise money for a sick cat, but not poor people.”

Seriously, you can’t make this stuff up. This case of “Cats-1, Kids-0” comes to us via a PayPal representative and their recent tangle with a blogger from the popular DIY-mocking site Regretsy. In between posting pictures of why-do-these-exist crafts (and my personal favorite, things that are not steampunk), the folks at Regretsy sometimes harness their power for good and raise money to help people. This year, they created a gift exchange where readers could purchase toys for children in need. The problem? Regretsy used the “donate” button for the cause, which PayPal informed them is only for use by non-profits. (Which is news to me, at least – that’s the same button I see on starving artists’ pages all the time.)

The tale only gets more complicated from there, so I suggest you read the whole post, or the Consumerist recap. The short version is that they couldn’t take donations because they’re not a non-profit, but they also couldn’t sell the toys and then send them to needy kids because PayPal knew what they were trying to do (charity! oh no!) and threatened to track shipments. PayPal also froze the account and the website owner’s personal account. Not to mention that every time something had to be fixed – returning donations, selling gifts, returning gifts – PayPal received service fees.

There are definitely some problems with PayPal’s policies on this matter (and The Green Geeks did a good job of researching this). But the overarching problem isn’t so much the flawed (or at best, utterly confusing) policies – it’s the way the PayPal rep handled the situation, as recounted by Regretsy. If PayPal had been reasonable in coming up with a solution and not done things like distinguish between cats and poor people as worthy causes, then there wouldn’t have been anything to blog about.

Because the thing is, all of this is really good blog fodder – and a perfect recipe for pissing off the Internet. Remember earlier this year when someone at a PR company called The Bloggess a four five-letter word and proceeded to blanket insult all bloggers in a ridiculous email exchange? Or last year when Cooks Source was driven out of business within two weeks because of the response to unrepentant plagiarism?

Maybe it’s not always fair – angry Internet responses are often not proportional to the offense.  And there is always the possibility that those with the power of the Internet at their fingertips can use it for evil (I’ve yet to hear about someone purposely screwing with a company out of spite, but it’s not out of the realm of possibility).  But in cases where there is any kind of error on the part of the company, lightning fast apologies are the best response, since the longer an issue like this is ignored, the angrier everyone gets. So far the PayPal response seems to be deleting messages on their Facebook wall – and in the meantime, “paypal” is trending on Twitter.

Here’s a tip for all companies out there: Maybe advise your employees to be a little more careful with people who have an army of readers behind them. I mean, in a perfect world, every customer service rep would treat the customer like they have a million Twitter followers just waiting to be mobilized into action.  But especially if you know you’re dealing with a popular blogger – maybe just best to assume they have a sign on their forehead that reads COME AT ME, BRO.

Update: PayPal just posted to their Facebook page and blog that they released Regretsy’s funds and will be making a donation toward the cause. Good call with the quick apology! Behold the power of the angry masses.

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29 Responses to PayPal Is Latest Case Study of “Don’t Piss Off the Internet”

  1. Let me first say that I HATE PayPal and eBay with a burning passion.

    However, why should PayPal care if they piss the internet off? They have the market cornered and no matter if they piss off the entire blogging community as a whole, they won't shut down. There are too many scared people who use PayPal on a daily basis, who won't go against PayPal.

    That's the problem. PayPal has too many people in their pockets. We all just need to stop using PayPal and they wouldn't have this 'come at me, bro' attitude.

    • Part of the problem is that there are so few alternatives to PayPal that are available to anyone outside of the US, and the fact that the options that ARE available are just as expensive as PayPal and take longer to have your money show up in the account (like Paymate, which takes 1-3 days for money to hit the account FROM ANOTHER AUSTRALIAN! and can take longer for overseas transactions – they also charge extra for credit card transactions). These alternatives are not really viable for the many one-person operations that currently use PayPal on places like etsy. I am one of these independent craftspersons and I would dearly LOVE to be able to walk away from PayPal, believe me, but there are just no other options that I know of at this point in time that would not mean my business goes down the tubes because of excessive fees, delays in transactions or restrictions on the countries I can sell to. If anyone knows a viable service available to Australian sellers that can be used by buyers worldwide and doesn't cost an arm and a leg, PLEASE let me know, because I WILL use it.

  2. as of 34 minutes ago Paypal on their Facebook page have posted and apology, as well as stated that all funds will be returned and that they will make a donation to the cause. See what the power of the angry geeks can do!

  3. Thing is paypal are dicks and have always been dicks because they can get away with it.
    There's too much online shopping that can only be done through Paypal for them to feel threatened by any amount of online anger.

  4. PayPal just announced that they have unfrozen all of Regretsy's accounts, have apologized and will be making a donation to the cause. Now, let's make sure that donation isn't a mere trifle!

  5. I dont get why its evil to use your money however you want? If someone puts a donation button up for help to take care of a sick cat and its legit. Then So be it. Someone has the right to give away free money if they want. And if the person just gave it away to a scam then oh well? Its your fault for doing that. But you get to live with the fact that your intentions were purely good, in helping sick animals. Its like posting your email for donations. You can give people your paypal email to send you cash directly. Whats gunna stop people from doing that? As far as i know the button is used for GIVING people money voluntarily. Charity doesnt define a "official organization" right? Its like standing on the street corners of the internet asking for money. And if someone feels they want to… then let them? Lets put a paypal button on GeeksAresexy.net IF you didnt have a shop. People enjoy this site, and want it to stay running. But the owners cant afford it. Bam, i can help support it and the owners. Thats a charity, is it not? Thats just my thoughts really… i dunno if i understand why people are getting mad at some buttons that allow people to give away money voluntarily.

  6. People still have PayPal accounts? cancelled mine back when the wikileaks thing happened. Haven't missed it once since then.

  7. Maybe advise your employees to be a little more careful with people who have an army of readers behind them. I mean, in a perfect world, every customer service rep would treat the customer like they have a million Twitter followers just waiting to be mobilized into action.

    Yes, well, I thought companies were starting to learn that around the time of Dooce v. Maytag (that's a very long post, but so great and satisfying I just read it for the third or fourth time), but apparently not. One would perhaps expect a "digital native" like PayPal to be even more aware than most.

  8. What? PayPal lied about the unfreezing regretsy's funds? SHOCKING!! (note the comments where regretsy owner says she has NOT been contacted, as paypal blogged)

    Why do you people keep believing the liars and cheaters???

  9. Unfortunately, PayPal did not bother to contact Regretsy prior to releasing the statement claiming:
    "…we are working directly with the account holder on this matter"

    So, that would be a LIE!

    This is an example illustrating the need for investigation, regulation, and probably prosecution — and most definitely litigation. It is amazing to me that a company – which is most definitely a financial institution – can arbitrarily freeze / seize a clients funds for 180 days. I want to know how much client $ they have “frozen” on any given day and how they are profiting from that. The Paypal apology was an “we’re sorry we got caught” and did nothing to clarify their policies or outline how they would change their processes. The States Attorneys and the IRS need to get over to PayPal and start digging!

    If you don't like the idea of doing business w/ a company that can randomly freeze / seize your account, then please read Andy Greenberg's article at Forbes http://www.forbes.com/sites/andygreenberg/2011/12

  10. On their blog they write, "As a regulated payment service, we’re also required by law to follow these guidelines."

    …but PayPal isn't regulated!

  11. Okay, I get that what paypal did was horrible. But..

    Can we PLEASE stop equating a kid getting a fucking toy, poor or not, to being a better cause than taking care of a sick animal? I'm sorry if you think a pet is a lesser being, but its life is more important than a kid getting a cheap piece of plastic, no matter HOW much it means to the kid or you.

    If you would rather donate for kids to get toys, fine. But STOP mocking people who would rather put their money toward helping an animal toward better health. I get it, paypal is an asshole. But stop putting animals down in the gutter over it. It's ridiculous.

      • I work in the veterinary field, but sure, show your stupidity.

        A life is more important than a fucking piece of plastic unless that piece of plastic is allowing life. A toy does not supply life support.

        • we make real, emotional, sexual and intellectual connections with human beings, not pets (unless you're really sad). if a "fucking piece of plastic" lights up the day of a child who may not have the opportunity to enjoy a full life, than that "fucking piece of plastic" means more to me (and most people with terminally ill children) than any cat/rat/elephant/spider/puppy's life. sorry.

    • I really don't think that this is what anyone is saying. The ludicrousness of the statement was the distinction, not equating one as better than the other. I would have thought the statement was just as ridiculous if it had been the other way around.

    • I don't think it's a matter of 'mocking people who would rather put their money toward helping an animal.' In fact, I'm almost sure it isn't.

      It's a RIDICULOUS comparison, which is part of what the irate responses are over. One cat. 200 kids. In either case, the fact that one is charity and one is a 'worthy cause' with no real distinction between the two? Is utter bull crap. I say both are worthy causes, and both are in fact charities.

      Basically, PayPal is creating the distinction, not bloggers, not the internet as a whole. PayPal is saying your cat is not good enough to be a damned 'charity' and Christmas for 200+kids is to much to be a 'worthy cause'. Where in actuality, there's not a friggin' difference. You're begging for money for something important to YOU that you cannot or will not finance yourself. The only even potential difference is the $4k goal for toy for over 200 kids? That would do what..Maybe take care of one seriously ill cat?

      Oh, and as for your 'its life is more important than a kid getting a cheap piece of plastic' bullshit, if you actually read Regretsy before posting your opinion of worthiness, you'd have read that at least one of the kids on the list is a terminally ill toddler who isn't expected to have another Christmas. Yeah, I'd say in that case, I'd rather the kid have a good holiday than fund the veterinary bills for a cat, especially since we still aren't talking about just ONE kid.

      • A LIFE is more important than a TOY, no matter HOW many are getting those toys. I feel bad for the terminally ill kid, but a toy isn't going to save his life.

        Paypal might have started the comparison, but it's your lot that's carrying it as a banner and shouting down anyone who'd dare want donations to save their animals' life.

  12. While Paypal has announced that they were going to make a donation, including having discussed $100 gift cards for each of the families getting donations from the blog.

    However, thus far, there is so sign of this actually happening.

    Also the combination of an : I can’t help you, I can’t find a resolution and call you back, and No you can’t talk to someone higher up, IS TOTALLY a customer service failure.

    the point is not to rush the customer off the phone while not even addressing their actual issue, The point of Customer Service, is to actually try to resolve the issue, even if the answer is “we have to investigate this and get back to you” or “really we can’t get you that package from China by Tuesday” no matter how nasty the customer’s attitude… Customer service must not appear to be obstructionary or confrontational.

    If there’s a TECHNICAL issue, address the technical issue… don’t rush the customer off the phone with a non-answer. You will ALWAYS be better off working with the customer even 10 minutes at a time in 2 phone calls to actually fix the problem (or even make a reasonable attempt to!)… (and NO do NOT EVER pass of the phone to the next CS agent saying that they’re the supervisor…) …than taking 10 phone calls at 2 min each and end with an angry customer who will tell all their friends, post to the internet, and look for someone else to fill the same need for goods or services…

  13. also should note that I worked over 20 years in customer service… (for various companies)
    and that I saw the industry shift from “Lets see how we can solve this together…” and “Let me look this up ” and “I’m going to have to do some further research, can I call you back.” and “Certainly, I’ll track your package and should have an answer by this afternoon.”

    Too an attitude from MANAGEMENT, that the whole point of customer service is taking as many calls as possible, not resolving issues, tracking delayed/lost packages (Yes 90% of the time there’s a signature from the mail room guy and an urgent package collecting dust! but that doesn’t make that information insignificant to the customer!) … just bam! take the call get the customer off the line… NEXT… never mind that they’ve been without service for 10 days and have called 5x a day since their business phone line went out… or that package they need to keep their business going is 5 days late…

    Most of the time, it’s because of decisions handed down from management or the supervisors. The “why are you asking for help with this?” when you ask a manager how to help a customer with a problem that you’ve never been trained to handle and haven’t seen before. Or worse “Stick to the script or it will count against you” attitude… how does customer service even alert management/supervisors when there’s an unforeseen problem?

    My solution these days, is if the service/goods are available via a small business I’ll go there… If customer service is broken, If I can, I’ll find another source, and I’ll write a letter to management/corporate about WHY I’ve moved my business elsewhere.

    There isn’t much option though with Paypal. If someone is selling on line, often it’s the only thing the majority of customers will use. People who already are with the Big Guys are unlikely to open another account with another service just to buy One thing from a particular seller…. other services, like some have mentioned, work fine with local stuff but can’t handle international transactions easily, sometimes not at all.

    However, being the big guy on the block today, can easily change if it becomes widely known that your service/goods aren’t so hot, or your customer service leaves much to be desired. Someone will eventually arise to fill the gap, and take your place.

    Years ago I closed my account at a big national bank, because the customer service was AWFUL, I’ve been with a credit union for over a decade now and never regretted it. The key difference for me is the level of customer service, though not having to pay $10/ mo Just to have an account is certainly a nice thing too.