Anyone who has followed PayPal’s not-exactly-customer-friendly behavior over the years is likely in for a shock. After previously telling the owner of Regretsy.com that all the money she collected for her Secret Santa campaign had to be refunded because she used a “Donate” button — oh, and freezing her personal PayPal account just for fun — the online payment service has done a complete 180 and now says it will release Regretsy’s funds.

In a posting on the PayPal blog, some guy who probably really hates the internet right now writes:

Last night we became aware of an issue with one of our account holders, Regretsy.com. Though we can’t comment specifically on the account due to our privacy policy, we can confirm that the funds have been released and we are working directly with the account holder on this matter. Just like anyone else, we believe strongly in helping those in need, especially around the holiday season. We are making a donation to Regretsy to help their cause, and we’re truly sorry this occurred.

For background, we have clear guidelines for any business that uses PayPal to accept donations. For example, we require certain documentation to prevent misuse of the donated funds and, if the recipient claims charitable status, to determine whether they are properly registered. We do this to protect our customers and to protect our business. As a regulated payment service, we’re also required by law to follow these guidelines.

We appreciate that this can be an inconvenience, but we have a responsibility to all our customers – both donors and recipients; and buyers and sellers. In this instance, we recognized our error and moved as swiftly as possible to fix it.

We’ve reached out to Regretsy to confirm that the funds have indeed been released.

Regretsy Issue Resolution [PayPal blog]

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