Paypal and PR

Maybe not quite so related to future marketing or "the internet of things," but I saw this article and thought it was relevant to the class.

Basically, a fairly popular website (regretsy.com) decided to start up a toy drive for Christmas season. A Toy Drive is a charity in which people buy toys to later be donated to kids in need. It's understood that most of these kids would probably not be getting any presents for Christmas otherwise.

Everything was going great, until... Paypal decided to shut it down. Their argument was that the "donate" button that the site owner used could only be used by non-profits or a worthy cause, not for charity. Not sure if I understand the difference between a "worthy cause" and "toys for needy kids," but I'm not in charge of Paypal.

This resulted in April Winchell (the person running the charity) having to incur paypal feeds, needing to refund a lot of people, and unable to give monetary donations to the families in need. Paypal also decided to freeze the associated account, meaning April Winchell not only couldn't access the charity money, she also couldn't access her own, personal funds.

Now, whether she actually transgressed against Paypal Terms of Service or not is irrelevant, I believe; she runs a popular website and this story will have been reblogged and retweeted by now. She's an influental member of the community, and her word of mouth will have just brought down Paypal's reputation even more.

In her words:

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.

According to some of the comments, Paypal was trying to freeze discussion on this matter on their facebook page. It doesn't seem to be working. And I've seen it mentioned three times already in my twitter and blog feeds, so... I don't think they'll succeed in shutting down discussion. It seems to me like Paypal needs a better PR manager.