Cats 1, Kids 0

December 6, 2011 10:08 AM

"You can raise money to help your sick cat, for example, but not poor people." Paypal vs. Regretsy: Cats 1, Kids 0.
posted by dunkadunc (102 comments total)

Breaking: Regretsy Issue Resolution
posted by jazon at 10:09 AM on December 6, 2011 [8 favorites]

Suck it, cats!
posted by Admiral Haddock at 10:11 AM on December 6, 2011 [1 favorite]

Maybe if poor people were cuter?

I found a loophole though, help poor people's sick cats.
posted by Ad hominem at 10:11 AM on December 6, 2011 [10 favorites]

Ooh, I was wondering if this would make it to the blue today. Pretty interesting/horrible stuff. I remember vaguely that Paypal did something similar to Mojang too.
posted by arcticwoman at 10:11 AM on December 6, 2011

That issue resolution post is typical corporate-ese. They put in a bunch of red herrings to make it look like Regretsy was claiming something it didn't ("if the recipient claims charitable status, to determine whether they are properly registered." - Regretsy never claimed charitable status, this is irrelevant).

Glad to hear they've released the money though. Now will they refund the double/triple/quadruple fees they charged on all of those transactions and refunds?
posted by arcticwoman at 10:14 AM on December 6, 2011 [7 favorites]

not to be a dick, but this is a big fucking duh-huh. The number of times paypal has done this, while countable, is a large number. The brouhaha that erupts every time puzzles me. Even before the body armour/something awful debacle in what, 2001 or 2 (their Katrina one got more media attention) people were irked by capricious paypal freezes of accounts.

But, what's the viable alternative ?
posted by k5.user at 10:15 AM on December 6, 2011 [8 favorites]

Nothing new here; Paypal acts like an ass, gets called out, outrage ensues, Paypal releases the funds and insists the problem is with the client, not them.
posted by Old'n'Busted at 10:15 AM on December 6, 2011 [5 favorites]

W
T
F
posted by DU at 10:16 AM on December 6, 2011

Paypal's entire mode of business is pretty damn parasitic to begin with. I can't think of a lot of good things to say about that.
posted by Stagger Lee at 10:16 AM on December 6, 2011

The number of times paypal has done this, while countable, is a large number.

Man, I'd be super-impressed if that number was uncountable.
posted by kmz at 10:18 AM on December 6, 2011 [22 favorites]

I wouldn't expect anything else from PayPal but I'm a bit surprised that others find this surprising now that we've had a major outbreak of paypalitis every single month.
posted by Foci for Analysis at 10:20 AM on December 6, 2011

Could the PayPal guy perhaps have included a photo of himself that made him look a little less like Andy Rooney? Because gah, CRANKYPANTS.
posted by Madamina at 10:20 AM on December 6, 2011 [1 favorite]

I've been trying to figure out how best to handle transactions when I start up my next round of Selling Stuff on the Internet. I'm SUPER INTERESTED in the paypal alternatives other folks have tried -- if I'm going to be paying someone a fee to process online payments, I'd at least like to be giving that fee to a company that isn't hilariously evil most of the time.
posted by Narrative Priorities at 10:21 AM on December 6, 2011

wellll.. I am going to defend paypal a bit. What they pulled with Mojang was hold a bunch of funds in case of chargebacks.

For every time they freeze an accound and it is a Mojang, or poor kids, or sick cats there are probably 100 times it is some sort of scammer. There is probably a suspicious behavior algorithm in place that makes Mojang (millions of dollars seemingly overnight), poor kids (one time fundraising that pulls in a lot of donors) and scammers look the same.
posted by Ad hominem at 10:23 AM on December 6, 2011 [4 favorites]

I called Paypal's PR people this morning and said, in effect, "when you get into the office you will want to deal with this ASAP. Someone is making a huge mistake and it will look very, very bad for Paypal if this isn't reversed today."

I don't know if this did a damn thing, but I hope it did.
posted by andreaazure at 10:24 AM on December 6, 2011 [11 favorites]

You have to hand it to the Regretsy folks for being pretty darned funny in even when faced with such crapitude.
posted by phunniemee at 10:25 AM on December 6, 2011 [4 favorites]

Didn't MeFi have a problem with paypal during the 100k username thing?
posted by rmd1023 at 10:27 AM on December 6, 2011 [4 favorites]

dunno .. I would check out square and dwolla(dwolla uses ACH)
posted by Ad hominem at 10:28 AM on December 6, 2011 [2 favorites]

There was also this incident.
posted by rewil at 10:28 AM on December 6, 2011

The number of times paypal has done this, while countable, is a large number.

Please please please tell us more about these uncountable numbers.
posted by xmutex at 10:28 AM on December 6, 2011

This also happened to metafilter.

Two alternatives that exist now are google checkout and Amazon's payment service. There are also smaller payment processors out there like Dwolla.

I guess there are a lot of people out there who have never heard these paypal horror stories? They've been like this for a long time
posted by delmoi at 10:29 AM on December 6, 2011 [3 favorites]

Paypal's entire mode of business is pretty damn parasitic to begin with. I can't think of a lot of good things to say about that.

How do you mean? It's pretty similar to how a bank works OHHH I SEE
posted by FatherDagon at 10:29 AM on December 6, 2011 [15 favorites]

It was a HUGE blunder for the Paypal people to mention cats. Everyone gets interested in something once you bring cats into it.
posted by dunkadunc at 10:29 AM on December 6, 2011 [39 favorites]

Please please please tell us more about these uncountable numbers.

Can't tell which of two possible jokes you are making, so.
posted by DU at 10:30 AM on December 6, 2011 [4 favorites]

Dwolla might be a viable alternative to PayPal, for some. Their fees are very, very low; $0.25 per transaction above $5, if I remember correctly.
posted by Blazecock Pileon at 10:31 AM on December 6, 2011

Madamina: Could the PayPal guy perhaps have included a photo of himself that made him look a little less like Andy Rooney? Because gah, CRANKYPANTS

I believe that's actually noted character actor Paul Sorvino, dude.
posted by hincandenza at 10:32 AM on December 6, 2011 [3 favorites]

How do you mean? It's pretty similar to how a bank works OHHH I SEE

With the exception of course of banks (at least in the U.S.) having, jokes aside, some semblance of regulations, not to mention coverage under the FDIC. Everything PayPal did in this article was perfectly legal because there's no law saying it isn't.
posted by XQUZYPHYR at 10:35 AM on December 6, 2011 [3 favorites]

Stripe is another paypal alternative.
posted by dripdripdrop at 10:39 AM on December 6, 2011 [1 favorite]

Paypal's entire mode of business is pretty damn parasitic to begin with. I can't think of a lot of good things to say about that.

I think a big part of the problem is the lack of competition. For years and years they were **the** payment processor on the internet. They are also more interested in retaining end users then merchants, just like credit cards.

But the monopoly thing is a serious issue. They act this way because people don't just move away. Try Amazon, try Google, try dwolla, etc.
posted by delmoi at 10:41 AM on December 6, 2011 [2 favorites]

I don't think people realize how very easy it is to use paypal for nefarious purposes...

But like people above, why the surprising uproar? You're not a nonprofit? Don't FLIPPING use a "Donate" button. Stupid. Want to use your fairly-popular website/business to raise some money? GREAT! Do it the right way, don't just start accepting "donations" willy-nilly and getting mad when someone's like "uh...no?" They have no way of knowing you're not someone masquerading around as someone else, scamming people and using paypal as the merchant.

Our NPO recently had someone who was dumb enough to raise money for their own kid but plaster our name over the event and the online donation thinger they had set up through paypal. Big surprise that paypal locked the account and froze the funds when they figured out it was tied to a private bank account but had our name on it and that they were calling deposits "donations." They were also saying we'd give them tax receipts for their purchases at a silent auction, which is also illegal but PayPal doesn't care about that.

So then to get the family their money, I had to spend an hour on the phone w/ PayPal and send them our 501 info and our bank account info and all that jazz...which I'd have been happy to do in the beginning.

"I'ma reinvent the wheel and do it my own damn way!" is for suckers.
posted by TomMelee at 10:42 AM on December 6, 2011 [6 favorites]

I opened a PayPal account solely to donate to websites that use it and have no other way to accept cash. I put a set amount in and donate it. Otherwise they have no cash from me.
posted by Splunge at 10:42 AM on December 6, 2011

Also, competition for anyone with a smartphone: SquareUp
posted by TomMelee at 10:43 AM on December 6, 2011 [1 favorite]

There is probably a suspicious behavior algorithm in place that makes Mojang (millions of dollars seemingly overnight), poor kids (one time fundraising that pulls in a lot of donors) and scammers look the same.

The biggest difference between PayPal and a lot of other services people use for important things, is that PayPal's policy seems to be purposely designed to seize funds in these kinds of cases and make it nearly impossible for the issue to be resolved in a sane way. If I have a charge on my normal bank debit card that seems suspicious, I get a call from my bank as soon as the issue is flagged and they have me verify that the charge is from me. If instead, the bank just froze my account, only responded to me in form letters, and when I finally figured out how to contact them told me I had to jump through a complicated series of hoops to get my money back, I would be looking for a new bank. Which is why I would never trust PayPal with significant amounts of money for any reason.
posted by burnmp3s at 10:45 AM on December 6, 2011 [16 favorites]

PayPal's heart apparently grew three sizes today. They reversed the action.
posted by oneswellfoop at 10:47 AM on December 6, 2011

Can't tell which of two possible jokes you are making, so.

Goddamnit now I feel dumb.
posted by xmutex at 10:48 AM on December 6, 2011 [1 favorite]

Being surprised when PayPal freezes your account seems like shoving your fingers in a running garbage disposal and being surprised when you break a nail or two.

That's what they do. Their entire fucking business model is predicated on doing just the bare goddamn minimum to not get themselves sued or regulated out of existence, and then fucking over everyone they possibly can, like a giant ... fucking ... thing. I'm not even sure what they are, but I suspect it's a fixture in certain types of Japanese pornography.

They're on one hand an extreme case of rent-seeking, because there aren't any "convenient" alternatives -- of course, in reality they're not very convenient. If you use them for basically anything more than the most straightforward eBay-style flea market transactions, you will inevitably get screwed. Your account will be frozen, and you'll have to fight with them for your money -- a period during which they will sit on your assets, and after which in many cases they will require you to issue refunds (although they will keep all the associated fees).

After seeing this happen over and over, I'm convinced that the cost of using PayPal, net of fees and the opportunity cost of dealing with their inevitable rules-lawyering shit when they freeze your account and try to steal your money, is probably substantially higher than just telling people to put cash in #10 envelopes and mail it.

It's a good thing that Elon Musk went on to found Tesla and SpaceX, because after PayPal he has a lot to atone for.
posted by Kadin2048 at 10:53 AM on December 6, 2011 [9 favorites]

Didn't MeFi have a problem with paypal during the 100k username thing?

Yup.
posted by Lutoslawski at 10:54 AM on December 6, 2011

wo alternatives that exist now are google checkout and Amazon's payment service.

Try to use either on eBay and you risk getting banned. Kind of moot really because eBay is on the way out. Try selling there lately? 9% minimum fees plus your 3% paypal - most items have a 15 to 20% fee on them after all is said and done. Try buying there lately? Most all the individual sellers are gone and mostly large businesses remain. The "deals" aren't so hot. I sold my last 3 computers on craigslist because it was less hassle .

We need a real auction site once again (and don;t get me started on Google search either)
posted by Poet_Lariat at 10:57 AM on December 6, 2011 [1 favorite]

Paypal needs to be regulated.
posted by MegoSteve at 10:58 AM on December 6, 2011 [3 favorites]

You're not a nonprofit? Don't FLIPPING use a "Donate" button. Stupid. Want to use your fairly-popular website/business to raise some money? GREAT! Do it the right way, don't just start accepting "donations" willy-nilly and getting mad when someone's like "uh...no?" They have no way of knowing you're not someone masquerading around as someone else, scamming people and using paypal as the merchant.

As the Green Geek site pointed out, the AUP says "collecting donations as a charity or non-profit organization" requires approval. The knowledge base says "Donations not associated with a charity or nonprofit organization don’t need to meet [the approval process] requirements." So, if I'm not a nonprofit, it would seem I can accept donations. Otherwise, what's the point of that last sentence?

If donations were intended only for approved charities/non-profits, they'd prevent someone from activating a Donate button until the organization was approved. But they don't. Because they're stupid.
posted by schoolgirl report at 11:01 AM on December 6, 2011 [13 favorites]

Paypal's heart apparently grew three sizes today


" We're sorry the whole entire internet is paying attention to the fact that we're assholes. Here is some shut the fuck up money. Please go away."
posted by louche mustachio at 11:01 AM on December 6, 2011 [34 favorites]

I'll give ya that there's no reason to activate the donate button on non-eligible accounts, and really I'm no paypal apologist---I just can't fathom why a fairly large-ish website would use paypal to accept money.

Although Regretsy is basically founded on being mean and hateful in much the same way as peopleofwalmart.com is, which doesn't necessarily mean that they're as savvy as they are creative.
posted by TomMelee at 11:04 AM on December 6, 2011 [1 favorite]

Paypal

Well there's your first mistake.
posted by T.D. Strange at 11:05 AM on December 6, 2011 [1 favorite]

There are no real paypal alternatives. None of the ones listed here have even figured out Canada-US interaction, let alone real international transactions.
posted by Chuckles at 11:06 AM on December 6, 2011 [2 favorites]

But the monopoly thing is a serious issue. They act this way because people don't just move away. Try Amazon, try Google, try dwolla, etc.

Except none of this matters because eBay owns PayPal, and therefore effectively requires anyone using eBay to use PayPal. I could be mistaken but I'm pretty sure the three alternatives you mention as payment literally couldn't be used for payment on eBay even if the buyer/seller wanted to.

PayPal in itself is not a monopolistic problem; that they thrive on being a function of an enormous commerce site that forces you to use them is. There are, as you just pointed out, alternatives to PayPal. You just can't use them on one of the single largest commerce sites on the planet. That remains the part that always baffles me. If Amazon announced tomorrow that they bought VISA and it was henceforth the only credit card you could use to buy anything on Amazon.com we would likely see Congress do something for the first time in about three years overnight.

If eBay was either A. forced to not be the same company as Paypal, or B. forced to allow competitor payment sites they do not themselves profit from, you would see a vast improvement in their service.
posted by XQUZYPHYR at 11:08 AM on December 6, 2011 [6 favorites]

Without defending the pathetic excuse for customer service exhibited here, a lot of the outrage I'm seeing on the 'net this morning seems to have missed a subtle but important distinction. Perhaps the Paypal representative should have said, "You may accept donations for your sick cat but you may not take donations to help other peoples' sick cats, unless you are a non-profit or registered agent for one." This kind of activity falls under the "act as money transmitter" section of the AUP that required prior approval.

In the real world, if my cat is sick and I pass a hat around the office to collect funds for medical care, then use those funds in order to pay my rent instead, I will probably lose some respect and friends but not necessarily be subject to liability; those donors have a clear understanding that they are giving me money and that I will then have choice and control over its disposition. If I pass a hat claiming to be collecting funds for United Way, and then abscond with them, it is a different matter entirely.
posted by SpaceBass at 11:09 AM on December 6, 2011 [6 favorites]

How do you mean? It's pretty similar to how a bank works OHHH I SEE

Not really. In most countries banks can't actully just arbitarily freeze accounts, suszpend payments, and keep the money for extended periods of time; there are laws against that, which is why PayPal would hate to be considered a bank. As far as I can see, seizing funds (i.e. stealing money) is a core part of PayPal's operating model.
posted by rodgerd at 11:12 AM on December 6, 2011 [2 favorites]

None of the ones listed here have even figured out Canada-US interaction, let alone real international transactions.

One of them is working on it.
posted by Blazecock Pileon at 11:21 AM on December 6, 2011

Has anyone commented on Paypal's blog? I've been trying to read the comments there and I keep getting a message saying there is only one comment on the post and it is awaiting moderation,while the recent comments sidebar seems to indicate at least 5 recent comments. (Arguably I'm on a VERY slow computer at work)
posted by miss-lapin at 11:27 AM on December 6, 2011 [1 favorite]

Somewhat playing the devil's advocate, I kind of admire the fact that Paypal wants to protect the meaning of the word "Donate." As someone who works in and cares a lot about the nonprofit sector, I get a little annoyed to see things that aren't really charities (by legal or social definitions) using nonprofit language.
posted by roll truck roll at 11:30 AM on December 6, 2011

First off, fuck paypal. When i sold on ebay they would fuck sellers left and right. And if something was bought with a stolen credit card, you were shit out of luck, of both a product and now a negative account balance.

Secondly, paypal acts as a bank without being one. It has fought tooth and nail to remain that way, further fucking anyone using the service, sans protections banking regulation offer to consumers.

/damn mentafilter for using it. I had a friend register my account as there was no way in hell I would create a new account. There are multiple credit processing companies that cost less than paypal... don't know why meta uses it.
posted by handbanana at 11:31 AM on December 6, 2011 [1 favorite]

Although Regretsy is basically founded on being mean and hateful in much the same way as peopleofwalmart.com is, which doesn't necessarily mean that they're as savvy as they are creative.

Please. Everyone Regretsy mocks is, unlike the poor souls shopping in WalMart, putting themselves out there on the Internets on purpose to sell shit. Regretsy has a long-running series on items that claim to be handmade but can actually be bought much more cheaply from Chinese wholesalers--and has repeatedly tried and failed to get Etsy.com to pay attention to this fraud on its site. In the process, she also mocks people who try to sell sweaty used leotards, hideous paintings, and earrings shaped like ladyparts.
posted by emjaybee at 11:34 AM on December 6, 2011 [24 favorites]

I'm not going to try to defend PayPal's policy here. Maybe they have their reasons, maybe those reasons are stupid. But I can see how they got pissed.

Regretsy used the donate button in a way PayPal didn't want them to. Ok. Didn't know, whatever. PayPal says: we don't want you to do what you're doing on PayPal.

Regretsy then, tries another way to do the same thing on PayPal. PayPal says again: we don't want you to do what you're doing on PayPal. So then, if I'm understanding right, Regretsy then tries ANOTHER way to essentially do what PayPal has said they DO NOT WANT.

I'd be kind of short on the phone by that point, too.

But now you've Internet PR bullied them into getting what you wanted, so yay, I guess.
posted by ctmf at 11:37 AM on December 6, 2011

PayPal need to be replaced. I'm rooting for Open Transactions since BitCoin has proved rather goldbuggy.
posted by jeffburdges at 11:39 AM on December 6, 2011

(And yes, it was for a good cause, and PayPal is evil and sucks balls anyway. Aside from that, I mean.)
posted by ctmf at 11:40 AM on December 6, 2011

I kind of admire the fact that Paypal wants to protect the meaning of the word "Donate." As someone who works in and cares a lot about the nonprofit sector, I get a little annoyed to see things that aren't really charities (by legal or social definitions) using nonprofit language.

They are actually doing the opposite of that. If you for example have a website and require people to "donate" to get special premium features, they will let you use the Donate button without any kind of verification that you are a nonprofit or that it's an actual donation rather than a commercial transaction. If instead you use the Donate button to collect cash donations with the intent to act as a middle man for an actual charity and pass the funds to them, that is against the rules.
posted by burnmp3s at 11:40 AM on December 6, 2011 [11 favorites]

There are multiple credit processing companies that cost less than paypal... don't know why meta uses it.

Well, I have doubts about actually costing less, but let's look at the options:

Paypal: Paypal sucks!
Amazon Payments: #amazonfail
Google Checkout: I'm not giving my credit card info to Big Brother
A direct merchant account: Pain in the ass for Matt
posted by smackfu at 11:42 AM on December 6, 2011

Things have gotten worse with Paypal and eBay are under common ownership. I wish the FTC would go after those assholes.
posted by exogenous at 11:43 AM on December 6, 2011 [1 favorite]

If instead you use the Donate button to collect cash donations with the intent to act as a middle man for an actual charity and pass the funds to them, that is against the rules.

That doesn't really seem unreasonable, since the second half seems fairly optional on the middle man's part.
posted by smackfu at 11:43 AM on December 6, 2011

PayPal's heart apparently grew three sizes today. They reversed the action.

Regretsy says they haven't heard from them.
posted by Kalthare at 11:45 AM on December 6, 2011 [3 favorites]

Perhaps the Paypal representative should have said, "You may accept donations for your sick cat but you may not take donations to help other peoples' sick cats, unless you are a non-profit or registered agent for one." This kind of activity falls under the "act as money transmitter" section of the AUP that required prior approval.

I don't see how you're drawing that conclusion. The words "money transmitter" do not mean "someone who gives money to others", they refer to money service businesses that provide money transfer on a commercial basis. The homepage of the UK Money Transmitters Association should make it pretty clear.

At a cursory glance Paypal seems to have the vast majority of the wrong in this (as evidenced by their climbdown). They've couched their policy in rather woolly terms, and in relation to types of organisation. They've then interpreted that policy as forming a restriction on activities. They've compounded this problem through what looks like boneheaded implementation and customer communications.

Of course it's not a good idea to start collecting donations on your own behalf when there are many more efficient ways of doing good. But it's absolutely ridiculous that a company of Paypal's size and function apparently both has policies that are ineffective for the prevention of fraud and employees who are unable to implement them effectively.
posted by howfar at 11:46 AM on December 6, 2011

Except none of this matters because eBay owns PayPal, and therefore effectively requires anyone using eBay to use PayPal. I could be mistaken but I'm pretty sure the three alternatives you mention as payment literally couldn't be used for payment on eBay even if the buyer/seller wanted to.

The issues that people have with PayPal aren't due to using them to make purchases though - the problems stem when people are using them as their payment processor and in those cases there are indeed alternatives.
posted by zeoslap at 11:49 AM on December 6, 2011

Things have gotten worse with Paypal and eBay are under common ownership.

That was nine years ago; Paypal was only independent for three or four.
posted by smackfu at 11:54 AM on December 6, 2011

Paypal wants you to use their service to solicit individual donations. It wants bloggers to use the Donate button to, say, raise money to buy a new laptop, or to buy their kid some new clothes so he doesn't get beat up at school. This is because these are low-risk transactions, and Paypal gets to take a cut with little risk that some donater is going to raise a fuss.

Paypal doesn't want people using their service to scam people (and online charity drives are very common scams - remember the "I'll buy disabled kids an iPad" scam? Although that was on Chip-in), because while they make lots of money from this, they also have to deal with the hassle of people complaining and wanting their donations back and such.

So instead of just saying, "We don't process donations!" they instead try to play this silly game where they authorize low-risk transactions and catch high-risk transactions. Except they suck at catching high-risk transactions, so it takes them (apparently) weeks to months to shut stuff down - conveniently netting them lots of fees.
posted by muddgirl at 11:58 AM on December 6, 2011 [5 favorites]

Can't you just collect donations for your very sick cat, whose full name happens to be "Donations to Buy Holiday Presents for Needy Children" (but we just call him "Fluffy")? Can Paypal tell you what to name your cat?
posted by crankyrogalsky at 11:59 AM on December 6, 2011

> I don't see how you're drawing that conclusion.

I can see how it would make less sense in different areas but I'm talking about Paypal's terms, the phrasing of which was selected by neither I nor the UK Money Transmitters Association. For a more context-specific example, please refer to Items 3 and 5, here.
posted by SpaceBass at 12:02 PM on December 6, 2011

Wait. People still use PayPal for stuff other than eBay, scams, eBay scams, and giving your money to PayPal? Huh.
posted by Vetinari at 12:04 PM on December 6, 2011

Can't you just collect donations for your very sick cat, whose full name happens to be "Donations to Buy Holiday Presents for Needy Children" (but we just call him "Fluffy")? Can Paypal tell you what to name your cat?

Yes, that's a great idea. Try yet another rules-lawyer trick to do what paypal has told you explicitly not to do. Good luck.
posted by ctmf at 12:04 PM on December 6, 2011

I was kind of disappointed when I grew up and realized that finding loopholes didn't usually work in real life.
posted by smackfu at 12:07 PM on December 6, 2011 [3 favorites]

Paypal froze Destiny's funds when he raised $30,000 for Doctors without Borders from a Starcraft streaming marathon on Justin TV.

I warned him in chat and on reddit not to use paypal, but oh well.

If you use paypal to raise money for charity, your account will get frozen.

If you use paypal for pretty much ANYTHING and make a lot of money, your account will get frozen.
posted by empath at 12:11 PM on December 6, 2011 [5 favorites]

SpaceBass, I'm sorry (and probably just being thick) what has this got to do with being a money transmitter? "Money transmitter" ≠ "official donation channel".

It seems to me that the problem is that Paypal have a policy that purports to regulate charitable/non-profit organisations, which they have then implemented as if it regulates charitable/non-profit activity.
posted by howfar at 12:15 PM on December 6, 2011

They are actually doing the opposite of that. If you for example have a website and require people to "donate" to get special premium features, they will let you use the Donate button without any kind of verification that you are a nonprofit or that it's an actual donation rather than a commercial transaction. If instead you use the Donate button to collect cash donations with the intent to act as a middle man for an actual charity and pass the funds to them, that is against the rules.

I can understand their wariness about people claiming to act as middlemen, though. The chances of litigation in that situation seem exponentially higher than in the case of direct donations. And if you want visitors to your blog to donate to, say, Doctors Without Borders, why not just put a link to the Doctors Without Borders donation page on your site?
posted by yoink at 12:21 PM on December 6, 2011 [1 favorite]

It is sad that this was once the only way to help poor people that had ever existed in the entire world and now even that is denied to us :-(
posted by tumid dahlia at 12:33 PM on December 6, 2011 [3 favorites]

I can understand their wariness about people claiming to act as middlemen, though. The chances of litigation in that situation seem exponentially higher than in the case of direct donations.

Right, that statement was not meant to be advocating for people to be able to act as unofficial representatives of nonprofits, I was just responding to the idea that PayPal is somehow protecting the definition of "donate" with this move.

And if you want visitors to your blog to donate to, say, Doctors Without Borders, why not just put a link to the Doctors Without Borders donation page on your site?

In many cases it's because the people collecting the donations want to track the donations that are being made for some reason. It may just be so that they can say "We raised $X for charity!" Or it could be that they want to have some sort of matching donation scheme, or they want to give everyone who donated a gold star on their site or something like that. For the MetaFilter one linked above, it was part of a raffle. Otherwise to implement those sorts of things, you would have to count on Doctors Without Borders to be able to handle the technical details of being able to track all of that and give the stats to the organizers. These kinds of collaborative informal charity drives happen all the time in real life with cash, it just gets more complicated when a payment transaction company gets involved. At any rate, the main problem here is not that PayPal doesn't allow these sorts of things, it's that they act extremely poorly in the cases where people break the rules.
posted by burnmp3s at 12:37 PM on December 6, 2011 [1 favorite]

in real life with cash, it just gets more complicated when a payment transaction company gets involved

Mainly because you can't do a chargeback on cash when you find out it was a scam, leaving the payment processor holding the bag.
posted by smackfu at 12:47 PM on December 6, 2011 [1 favorite]

Otherwise to implement those sorts of things, you would have to count on Doctors Without Borders to be able to handle the technical details of being able to track all of that and give the stats to the organizers. These kinds of collaborative informal charity drives happen all the time in real life with cash, it just gets more complicated when a payment transaction company gets involved.

There's a pretty cool site called Firstgiving designed to solve this problem. You can create your own contest, raffle, fundraiser, etc., for any 501c3 nonprofit, with or without the nonprofit's permission. Firstgiving sends a check directly to the nonprofit's address, as listed in its 501c3 paperwork.
posted by roll truck roll at 12:55 PM on December 6, 2011 [4 favorites]

How did Walt Junior get away with it?
posted by bendy at 1:06 PM on December 6, 2011 [6 favorites]

Do it the right way, don't just start accepting "donations"

Actually for many art products or "pay what you like, even free" there are more reasons to use a donation system.
posted by Phalene at 1:11 PM on December 6, 2011

I've been wanting to close my account for a long while. This helped me work up the motivation to finally do it. The only way to make them go away is to not give them money.
posted by klanawa at 1:18 PM on December 6, 2011 [1 favorite]

The only way to make them go away is to not give them money.

I dunno. Maybe if they make enough money they'll all fuck off to that libertarian island they want to build where they think girls will want to kiss then*. Then we just get some sky-writers to paint the co-ordinates all over the sky of Somalia. Problem solved.

*I don't actually know how much PayPal stock Thiel still owns. But did you notice how all the really shitty online stuff is run by libertarian twats?

What's that you say? "Wikipedia"? Never heard of it. Shut up!
posted by howfar at 1:35 PM on December 6, 2011 [1 favorite]

I was going to say 'hey, Cake Wrecks does an annual charity drive right around this time of year, too!' but it turns out Cake Wrecks uses either Firstgiving or direct-to-charity giving.
posted by librarylis at 1:40 PM on December 6, 2011 [1 favorite]

So instead of just saying, "We don't process donations!" they instead try to play this silly game where they authorize low-risk transactions and catch high-risk transactions. Except they suck at catching high-risk transactions, so it takes them (apparently) weeks to months to shut stuff down - conveniently netting them lots of fees.

It seems like they do this kind of on purpose. There is a great deal on Paypal's site stating "LOOK HOW EASY IT IS TO RAISE MONEY FOR YOUR CAUSE HERE IS A BUTTON AND A WIDGET AND A SOCIAL NETWORKING APP AND IT IS SO EASY!" The terms they set forth for what qualifies and what does not seem really vague - even though this:

"You may accept donations for your sick cat but you may not take donations to help other peoples' sick cats, unless you are a non-profit or registered agent for one." This kind of activity falls under the "act as money transmitter"

sounds like a good, clear distinction, one of the examples Paypal themselves gives is "a bike shop raising money to fix a church roof." A bike shop is not a nonprofit, and a church is not an individual.

There seem to be people pointing fingers and yelling "STUPID" at Regretsy (and SomethingAwful, and ...uh...Metafilter) when it seems to me that Paypal's regulation of what is and is not permissible is rather arbitrary. It smacks of preying on people's very real desire to do good. None of those people are stupid. They took Paypal's claims at face value and got screwed by what is and by what is not, in the fine print.

When Paypal plasters its site with LOOK HOW EASY THIS IS YAY and then repeatedly yanks the rug out from under people (while keeping all your fees, of course) I can't help but feeling that for their claims of wanting to protect people from scams, they are running a rather large scam themselves.
posted by louche mustachio at 1:59 PM on December 6, 2011 [13 favorites]

Ever try to get PayPal to accept a Visa or Amex gift card, one that Amazon will accept with no issue? It won't, probably because then it would be harder to kick your ass with fees, or worse, if something goes awry.

Schadenfreude party at my place, 7 p.m. God, I hate PayPal and its personal-info-grubbing ilk.
posted by Currer Belfry at 2:12 PM on December 6, 2011

It seems like they do this kind of on purpose.

Yeah, my intended implication is that they do this on purpose (or that they're a bunch of idiots, which I really do doubt).

It really is non-intuitive to say that Paypal will process donations to fix 1 church roof, but NOT process donations to fix 100 church roofs.

I wonder if in the end it is a tax thing, where Paypal has to report certain quantities of taxable charitable donations?
posted by muddgirl at 2:16 PM on December 6, 2011

Some specifics on the policy here.
posted by feistycakes at 2:44 PM on December 6, 2011

This conveniently reminded me I have a paypal account I never use and gave me a self-righteous reason to close it up.
posted by fuq at 3:32 PM on December 6, 2011

Except none of this matters because eBay owns PayPal, and therefore effectively requires anyone using eBay to use PayPal. I could be mistaken but I'm pretty sure the three alternatives you mention as payment literally couldn't be used for payment on eBay even if the buyer/seller wanted to.

Sooo… don't use Ebay?

Somewhat playing the devil's advocate, I kind of admire the fact that Paypal wants to protect the meaning of the word "Donate." As someone who works in and cares a lot about the nonprofit sector, I get a little annoyed to see things that aren't really charities (by legal or social definitions) using nonprofit language.

Non-profit language? Why the hell should non-profits have a monopoly on the word 'donate'? Donate just means give money. You can donate to open-source projects, websites you like, that kind of thing. If you're giving money, you're donating.

And furthermore, Paypal apparently doesn't require you to be a non-profit to accept donations but I guess there is some rule about accepting donations for personal use, rather then on behalf of someone else.

TL;DR: Don't use paypal. I'm really surprised that this is the one that actually got paypal to reverse itself. They do it all the time.
posted by delmoi at 3:49 PM on December 6, 2011 [4 favorites]

Update from Regretsy.

Paypal is blaming it on one agent, giving Regretsy free services through the end of 2011. Apparently the account was flagged because the money was coming in too quickly (which April is fine with the flagging), but the agent who reviewed it made a bad call.
posted by arcticwoman at 8:04 PM on December 6, 2011 [1 favorite]

How predictable. Corporations love to lay the blame on that one bad apple.
It was a different bad apple that screwed up when it was Metafilter's turn.
And another bad apple that made a bad judgement when it was Something Awful's turn.
And countless other nameless examples I'm sure - all just individuals, making their own choices. It's not our fault they were poor choices. Poor Paypal, they have such bad luck!
posted by bleep at 8:11 PM on December 6, 2011 [5 favorites]

k5.user wrote: But, what's the viable alternative ?

Well, if you're me and you have my bank, you can give your bank 75 cents to use ZashPay. If you have an even better bank, you can push money to any checking account using ACH for no charge at all.

burnmp3s wrote: If I have a charge on my normal bank debit card that seems suspicious, I get a call from my bank as soon as the issue is flagged and they have me verify that the charge is from me. If instead, the bank just froze my account, only responded to me in form letters, and when I finally figured out how to contact them told me I had to jump through a complicated series of hoops to get my money back, I would be looking for a new bank. Which is why I would never trust PayPal with significant amounts of money for any reason.

You know why they don't? Federal law. If PayPal was regulated as the bank they are, this kind of shit wouldn't happen. That's not to say I haven't seen merchant accounts frozen for stupid reasons, but at least there you have some protection beyond suing them.
posted by wierdo at 8:24 PM on December 6, 2011

Were the donations to Regretsy tax-deductible?
posted by desuetude at 8:39 PM on December 6, 2011 [1 favorite]

that libertarian island they want to build where they think girls will want to kiss then*

Theil isn't interested in girls, although I'd be willing to bet his politics probably do interfere with his dating life in San Francisco (usual libertarian fuckwad'ry + lots of money = funding things like James O'Keefe projects, joy joy!).
posted by namespan at 8:52 PM on December 6, 2011 [1 favorite]

I was kind of disappointed when I grew up and realized that finding loopholes didn't usually work in real life.

Loopholes work quite well for the people (using the Romney definition of "people" that includes corporations) that can afford a battalion of lawyers. I paid more in taxes last year than many Fortune 100 companies.

PayPal shafting kids near Christmas, forcing people to bow to the whims of their service reps--did the Enron management team just move over there when I wasn't looking?
posted by fifteen schnitzengruben is my limit at 9:08 PM on December 6, 2011

Theil isn't interested in girls

I'd forgotten that. Same dumb libertarian lament applies: "Whadya mean there are some things money can't buy‽"
posted by howfar at 4:42 AM on December 7, 2011

Boycott Everything (thoughts from a PayPal seller)
posted by litnerd at 5:32 AM on December 7, 2011 [1 favorite]

Paypal is blaming it on one agent, giving Regretsy free services through the end of 2011. Apparently the account was flagged because the money was coming in too quickly (which April is fine with the flagging), but the agent who reviewed it made a bad call.

Sounds like ass-covering. Like how the agent said "You can't talk to anyone above me" when she asked to speak to a supervisor. Paypal puts, as a matter of policy, major decisions in the hands of idiots, with no way to appeal. It's only when this story blew up more then their other dick moves (which they do all the time) did they do anything. They'd be happy to seize money meant for poor kids and earn interest on it for six months.

So even if the managers wouldn't have agreed with this particular agent at this point, they put her in a position where they could screw people over, given a policy that screws people over all the time, and made their decisions totally unaccountable and irreversible. It's b.s.

That's not to say I haven't seen merchant accounts frozen for stupid reasons, but at least there you have some protection beyond suing them.

I'm sure Paypal's TOS has a section saying "you can't sue us", and requires arbitration.

PayPal shafting kids near Christmas, forcing people to bow to the whims of their service reps--did the Enron management team just move over there when I wasn't looking?

They've been acting this way for a decade at least.
posted by delmoi at 1:52 PM on December 7, 2011 [1 favorite]

Boycott Everything (thoughts from a PayPal seller)

Of course, paypal might just freeze his account on their own for no cause. It's pretty easy to integrate googleand amazon payment with things. If you're using a site that's paypal only, that does suck, I guess.
posted by delmoi at 1:55 PM on December 7, 2011

It is fairly easy to avoid Paypal most of the time, unless you are dealing with eBay, which by virtue of its size and popularity has essentially a monopoly. Craigslist, etc. just doesn't have the reach. eBay/Paypal have fucked me over as an eBay seller, but I still go back once in a while to sell when I feel it's worth the risk. At least buying on eBay is pretty safe with a credit card because of the ability to charge back.
posted by exogenous at 2:50 PM on December 7, 2011

>How predictable. Corporations love to lay the blame on that one bad apple.<

Not that hard to believe though, they probably don’t train well, or pay much.

I do a lot of buying with Paypal. It’s worked great for me, but I don’t like them for my own, possibly irrational reasons. But I don’t like Amazon or Google either, and would rather just stick with Paypal. There isn’t a non-sucky option.
posted by bongo_x at 3:44 PM on December 7, 2011

Like how the agent said "You can't talk to anyone above me" when she asked to speak to a supervisor. Paypal puts, as a matter of policy, major decisions in the hands of idiots, with no way to appeal.

If your "bad apple" is saying things like that, how much does it even matter if you have good policies?
posted by smackfu at 6:36 AM on December 8, 2011

empath: "If you use paypal for pretty much ANYTHING and make a lot of money, your account will get frozen."

Just ask Notch...
posted by benzo8 at 4:11 AM on December 9, 2011

If your "bad apple" is saying things like that, how much does it even matter if you have good policies?

If you have good policies, it wouldn't occur to the rep to say something like that.
posted by bleep at 8:26 PM on December 9, 2011