After using the wrong button to collect Secret Santa donations, Regretsy.com has had to refund everything, while PayPal keeps their cut of the fees. The process has both frustrated April Winchell, who was behind the charity drive, and the families who will now miss out on the collective goodwill from strangers.
"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," Winchell explained.
PayPal closed the account, because the money was being collected via a Donate button instead of a Buy Now or Shopping Cart button. Given that the toys were purchased, Killer offered them for sale on the Regretsy website, exactly like a PayPal merchant would normally do. This too was stopped by PayPal.
"Because I used the wrong button, they have made me send them everything from bank statements to Articles of Incorporation to affidavits and notarized statements, even though I have been a verified business customer of theirs for 10 years," she wrote.
While processing refunds, she noticed that PayPal would "keep the fixed-fee portion of that fee" from her account.
"See how this works? PayPal offers a DONATE button for you to use on your site. After you use it to raise funds, they tell you that you aren't allowed to use it and make you return the money. They keep part of the fee for doing nothing. The best part is that when you raise the money all over again with a different button, they get fees on that. And of course, they process all the toy purchase payments, so this is a triple dip on money raised for needy kids at Christmas."
PayPal's rules and regulations aside, there was plenty of evidence that he Donate button was a mistake, and Winchell's long-term relationship with eBay's money store should have counted for something. Things only get worse when you read the comments from PayPal's customer service department, which are posted below.
"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.'" Winchell explained.
"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."
At the time this story was published, no one was available at PayPal to comment on the situation, or the customer service department's communications. We'll update this story if we get any additional information.
Update:
PayPal sent the following statement.
We can't comment specifically on the Regretsy.com account due to our privacy policy. However, we can confirm that the funds have been released and we are working directly with the account holder on this matter. We are also working with Regretsy to make a donation to help families in need this holiday season. We're very sorry this occurred.
For reference, we have clear guidelines for any business who 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. As a regulated payment service, we're also required by law to follow these guidelines.
We appreciate that this can be an inconvenience, but we have a responsibility to all our customers - both donors and recipients; or buyers and sellers. In this instance, we recognized our error and moved as swiftly as possible to fix it.