UPDATE: PayPal says they've released the funds. Still, this is an example of how not to handle a disagreement with a customer.
I'm not the biggest fan of the Etsy mockery site Regretsy, but site founder April Winchell does put the site's reach to good use, raising money to give toys to needy kids. However, then PayPal stepped in to ruin everything, freezing the site's account and then engaging in a totally befuddling bit of customer service. Winchell's post on the matter is worth reading in its entirety (if only to learn how not to deal with a disagreement with a customer), but this portion of the exchange is particularly confusing:
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.
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.
Even better, apparently someone from Paypal told Winchell that the only way they would unfreeze her account would be if she refunded the donations, wrote a letter to PayPal apologizing for her wrongdoings, and then they close her account. Well played, PayPal.