PayPal: You Can Help Cats, Not People

PayPal has faced its share of bad press over the years: some fairly, some not. In the past, they’ve faced controversy for shutting down donations for victims of Hurricane Katrina and a fundraiser for Doctors Without Borders. But they did themselves no favors this time by nastily scuppering an initiative to help needy kids at the popular snark site Regretsy.

Regretsy was working with their readership to collect donations to get toys to more than 200 needy children for Christmas. As they had seen used on countless other internet sites, Regretsy added a PayPal Donate button on to their pages. Readers donated as little as $2 and plenty gave much more. Regretsy collected so much that they were not only able to buy toys for the children, but were also planning to give cash donations to the families to help them through the holidays.

PayPal, however, was not impressed. Despite it not stating anywhere in PayPal regulations that you have to be a charitable organization to use the Donate button, and despite Regretsy making it very clear exactly how the funds were to be used, they told Regretsy that not only did they have to remove the donate button, they had to return all donations to the givers (minus the PayPal fees, of course.)

Regretsy then tried another angle: to have their community buy the toys Regretsy had already purchased and then have the toys shipped to the needy kids. PayPal let this go on for a while (and took a commission on every sale, natch) until they decided that, too, was unacceptable and made Regretsy refund all the purchases (minus the PayPal commission, of course).

Regretsy representatives were understandably furious, as you can see in their blog post. In attempting to clarify exactly what the Donate button can be used for, the PayPal representative actually stated “You can use the donate button to raise money for a sick cat, but not poor people.” Say what? To add insult to injury, PayPal then froze all of Regretsy’s accounts, leaving them in the position of having no cash to work with. (All the while keeping all fees PayPal made on every transaction.)

There are ways to work with your clients who may be in contravention of your (sometimes incomprehensible) rules. This is an example of what NOT to do.

Regretsy unleashed the wrath of the internet, and PayPal has been bearing the brunt all day.† Facing a barrage of Internet criticism and thousands upon thousands of negative remarks, PayPal has made a turnaround: they state they have released Regretsy’s funds and will be making a donation to help needy children. But the damage may already be done.

Lesson learned: it never pays to actively play the role of Grinch on Christmas.


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Photo Credit: Mykl Roventine on Flickr


Vaiva G.
Vaiva G5 years ago

What a bizarre story, nonetheless shows the power of internet users when they work collectively! especially when done so in a disgruntled manner!

Donna Hamilton
Donna Hamilton6 years ago

A poor show from Paypal.

Judith Howard
Judith Howard6 years ago

Shame on PayPal.. Considering the situation with Doctors Without Borders and Hurricane Katrina funding makes me think, I wonder if there's an online competitor.

Madein M.
Madein M.6 years ago

There are so many cases that paypal has against them that I will never again use paypal. I too was burnt by their pratices and it almost put me out of business. There are so many stories of people like myself (read here: ) All they do is hold on to yoru money so they can make interest off of it and smile while their doing it because you give them permission to when you agree to their "service"

Gina W.
Gina W6 years ago

I am in animal rescue and I am appalled at the way Paypal treated Regretsy. I don't think that there is anything wrong with wanting to save animals, and nothing wrong with helping children. Paypal really did themselves a disservice by the way they acted.

Nancy L.
Nancy L6 years ago

Paypal is in the business of making money - they take it any way they can.

Ryana R.
Ryana Rogers6 years ago

Prob not the smartest move at all! but I agree with most of the posters here we do have alot of charities for Kids .and I am glad they do I really am! however I dont like kids! I get tired of people telling me that I need to worry about kids first then aniamls no sorry animals first for me! Kids are wy to overrated they are everywhere and whats worse are alot of the parents ! they think its cute to have a screaming Kid! I dont its one of the most annoying irritating sound then a screaming kid! even more so then an alarm clock ! so I am siding with Pay pal on this they have neough childrens charities!

Gemma Jeva
Gemma Jeva6 years ago

Paypal? No, thanks!
Paypal? No, grazie!

Phyllis s.
Phyllis S6 years ago

Plenty of groups help kids. Leave Pay Pal alone. We who rescue need it !!! We don't get much $$ help !!!

David Anderson
David Anderson6 years ago

I don't understand the point. Did Paypal have an executive step in dog crap that morning? You would think that if people were giving donations, they were happy, the group taking up the collection was happy, the kids on the receiving end are, or will be happy, and Paypal took their fees (which are not that small) so they should have been happy.