Regretsy PayPal Saga Day Three: PayPal’s Mea Culpa

Have you been following the drama over at Regretsy that happened after PayPal decided to freeze all the money donated by Regretsy users to create better Christmases for kids in need?

If you haven’t, Regretsy’s blog post on the matter will bring you up to speed- go ahead, I’ll wait. Or paraphrase- basically, PayPal arbitrarily froze Regretsy’s shit after they received a bunch of donations for a Secret Santa project, and the rep was redonkulously rude and nonsensical about the situation, and Regretsy is a hilarious site that gently mocks questionable Etsy items. So as of two days ago, that was the deal, but the originally post was hilarious and frustrating and goes to show how bad customer service can destroy a whole bunch of people’s opinions on your company, so I do recommend reading it. Two brief excerpts:

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.

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.”

So yesterday, PayPal admitted in a blog post that the situation was not handled well (duh), but the payment processing monopoly hinted the situation was “resolved,” and also implied some vague legal reason mandated they be total assholes about the Regretsy situation. But it turns out, that’s not true either. Regretsy’s Helen got a PayPal executive on the horn yesterday, and the unnamed PayPaller admitted then that the debacle was down to the agent’s discretion:

The information you were given about using the donation button was definitely incorrect, and at the end of the day, it was an error in judgment on the agent’s part… The normal protocol would have been for the agent to tell you that once you reach a certain threshold, your account is triggered for a review. And when the agent looked at your account and made a subjective decision, he made a very, very incorrect one.”

To which Helen replies on the blog posting about the follow-up:

And I think we all know that Paypal’s apologies and reversals were motivated by the intense scrutiny they’ve been subjected to. If I were Sally’s Soap Shack, I would be waiting out that six month hold right now and wondering how to make Ramen noodles taste like Christmas ham.

Helen also says that an overall corporate mentality is what allows PayPal to run roughshod over common sense and fairness, and muses:

I think this is why this whole thing has resonated so deeply with people. We are all working very hard in a bad economic climate, and every cent we spend really matters. And corporations continue to treat us like they’re the only ones who are hurting.

We see the erosion of customer care in every sector. No one knows your name. No one makes eye contact. No one thanks you. Even doctors are practicing a completely different kind of medicine now. They have to see so many people to make the same money they used to that they’ve become more like mechanics. They forget your cancer is attached to a person. And Paypal forgets your fees are attached to people who are trying to make a living, or facilitate something good for other people. It makes sense doesn’t it? No one in their right mind would crap on poor kids at Christmas, unless they just weren’t paying attention.

In closing, she says PayPal promised to donate to the Regretsy Secret Santa project, and she proposes $100 to every one of the 200 families affected as a fair compromise. Do you think PayPal should pony up $200 for their mistake as well as sticking by their bad decision?