As you know, we have been trying to buy Christmas presents for kids in the Regretsy community.
We took many applications, vetted them carefully and set about creating a giant gift exchange program, where you could buy a gift for the over 200 children we’re helping.
We raised so much money that we found ourselves in a position of not just being able to send toys, but to send a monetary gift to the families as well. We hoped it might help them make their holiday dinners more special, or maybe pay a pressing bill.
PAYPAL SHUT IT DOWN
Apparently we made the mistake of using the “Donate” button, which Paypal is now claiming is only for nonprofit organizations to use. They froze the account, which also includes Zazzle money that we use to make emergency gifts. That money isn’t in issue, but what the hell! Might as well keep everything!
So last night, I decided to go about this a different way. Since these toys are already purchased, I decided to offer them up for sale on this site, just like any other retailer would. You could buy them according to what you wanted to spend, and we would send them on to the recipient of your gift, just like any other retailer.
PAYPAL SHUT IT DOWN
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. If you don’t get a refund, it’s because we got your money before they got smart and kept us from helping children at Christmas, which is really the best move any corporation can make.
Here are a few highlights from our conversation:
YOU CAN ONLY HELP CATS
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.
YOU HAVE TO START A NEW WEBSITEME: 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.
WE WILL TRACK YOUR SHIPMENTS
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.
YOU’LL NEVER GET AWAY WITH THISPAYPAL: 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 choosng 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.
Then my brain exploded.
At this point, I 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.”
When I asked how to close my account, he said I 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 my personal account, which has revenue from my book sales, e-books and all the other Finnish Folktales Swag. They’ll be holding that money for 6 months.
So to recap:
$ 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
They have made a fortune for not doing anything but making me manually return thousands of $2 sales and contributions.
I have been able to guarantee purchase and shipment of the toys, so that part is happening, as are the letters from Santa (most have already been delivered).
However, I am very sorry to say that at this point, I am not able to make a monetary gift to the families. They have frozen everything that was not already spent or donated, and I have no more funds to make a gift of that size.
MERRY CHRISTMAS
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.
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PayPal Continues War Against Regretsy, Freezes All Accounts & Halts Gift Exchange
UPDATE: In a somewhat surprising move for PayPal, it has finally decided to release Regretsy's frozen funds!
—————-
Yesterday, we brought you the tale of how a small misunderstanding on the part of Regretsy.com had led to PayPal telling the site it had to return hundreds of dollars people had donated for its Secret Santa campaign to put gifts in the hands of kids in need. Last night, things went from bad to worse and now every account associated with Regretsy is in limbo.
Consumerist contacted Regretsy head honcho Helen about the ordeal.
"I just had an hour long conversation with a jackass over there that was unbelievable," she tells us. "First he said that you can only use the Donate button if you're a nonprofit. I told them that was false; the PDF of instructions to use the Donate button only says 'worthy cause.' I pointed out that people have the donate button on their blogs to raise money for themselves, and he said, 'You can use the donate button to raise money for a sick cat, but not poor people.'"
Helen says the PayPal rep also told her that, "No one above me will even speak to you," and, "We know what you're up to and we're done playing games with you."
The big problem facing Helen is that she had bought gifts for the Secret Santa campaign based on the donations.
"So now I'm really in a position like any other merchant — which is to say, I have inventory I need to sell," she explains. "I asked him why I couldn't just sell them as gifts and send them wherever the buyer asked. He said I had to send it to the seller 'and we will make sure you do.'
"I said that felt discriminatory since they don't make other retailers send purchases to the buyer only, especially not at Christmas. He said no one but a nonprofit would send gifts to someone else on buyer's behalf. I said what about Amazon? he said, 'I'm not going to argue.'"
The PayPal rep's sole suggestion was that, if she wanted to sell these gifts, she would have to create a drop-down menu listing every single one of the hundreds of gifts (all different) and people would have to buy them that way.
"He said no one would buy a gift if they didn't know what they were getting," recalls Helen. "I said, 'What about mystery gifts and grab bags? That happens all the time. What about sites where they say, let us choose for you?' He said, 'It doesn't say that on the site.' I said, 'What if I put that on there?' He said, 'It's too late, we know what you're trying to do and we're not going to let you do it.'"
There was also some debate on how precisely this non-profit qualification is spelled out in the terms of service. The PayPal rep claimed it was quite clear, but Helen took him to task on this, she says he responded that they "take everything on a case by case."
I said that means I'm not privy to the criteria they use, which means I could run afoul of them at any time. He said "Not if you read the terms of use."
Continues Helen:
PayPal then froze Helen's personal account, including the revenue for her book, which has absolutely nothing to do with any of the charitable fundraising done on the site.“He said, "You're the one who is refusing to provide documentation." I pointed out that I have given them everything from Articles of Incorporation to notarized statements to affidavits, all while out of the country. He said, "But you refuse to give us your nonprofit paperwork." I told him once again, that I am a corporation, not a nonprofit, and they are demanding a document I don't have is not being difficult. I said, "Its like your penalizing me for not giving you my trucker's license." He said my only recourse was to refund everything or become a nonprofit. Like today I guess. Should have that all ready by Christmas.”
"They'll be holding that money for 6 months," Helen tells Consumerist.
She also offers the following tl;dr version of events as she sees them:
- 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 these 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
- They have made a fortune for not doing anything but making me manually return thousands of $2 sales and contributions.
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