PayPal Is Full of Themselves. And It’s Not Flattering.
PayPal is possibly the most well-known online payment company in the United States. It completes millions of transactions per day and is found on as many web sites as a payment option. It’s a great solution for a small business online that wants to accept credit cards. Heck, we use it!
Recently though, PayPal has shown just how big and powerful they have become. Three separate instances displayed their absolute lack of control or judgment. I give them to you below…
1) The Regretsy debacle
Have you heard of Regretsy? It’s an excellent (albeit saucy) blog that covers the odd, hilarious, awesome, and sometimes absolutely bizarre things that can be found on Etsy. Last December, Regretsy had an AMAZING idea: they were going to ask their huge readership to donate money so that they could buy toys for needy kids for Christmas! What could be more awesome than that?!?
Their plan went so well, that the donations poured in. More than they expected. PayPal was not happy. Why? Who knows. Apparently some Scrooge over there decided the whole scheme was just too good to be true. PayPal froze the account and made them refund the money. This is AFTER they took out their fees. There are many, many more details to this, but the basic breakdown is this:
- PayPal changed their donation policy on Regretsy, simply because Regretsy brought in too much money, too fast.
- Regretsy then tried to sell toys they had already purchased. Kind of a “Buy a toy for a needy child.” PayPal shut this down also (after taking their fees out from all the sales) and made them return the sales.
- PayPal then froze the personal account of Regretsy’s blogger.
All in all, a completely ridiculous response from PayPal. It seems as though their staff is a bit too eager to pull the trigger on shutting down a site. You can read more about PayPal’s shenanigans here:
Eventually, it worked out. PayPal admitted their error and donated $100 to every needy child’s family.
2) The Antique Violin
Barely a month after the Regretsy incident, PayPal once again outdid themselves for general idiocy. A woman sold a WWII era antique violin for $2500 using PayPal as the payment provider. The buyer of the violin disputed the label, claiming it was not antique.
At this point, reasonable companies would do the following: buyer sends violin to payment provider to hold until buyer’s money is refunded. Once refunded, payment provider sends violin back to seller.
Not PayPal! Nope. PayPal made the buyer destroy the violin. This was the only way the buyer could get their money back, according to PayPal. Can you believe this? So now, the seller was out $2500 and the antique violin. A remarkable lack of thought on PayPal’s part. Find out more about this unfortunate event here:
For icing on the cake, let’s take a look at how PayPal believes they can play morality cop to the interwebs. Last March, PayPal shut down the payment processes of an indie publisher called Smashwords. Why? Because, out of the thousands of titles that Smashwords carries, some of them contain themes that PayPal found objectionable. So, PayPal gave Smashwords an ultimatum: remove this content from your store, or we shut down your account. What could Smashwords do? They were built on PayPal. They had to comply.
Now, don’t get me wrong. Some of the themes that PayPal found objectionable are, in my opinion, vile and are not for me. 1
BUT. I am a big believer in freedom of speech. It’s one of the pillars that the United States is built on. If some people want to read or look at things that I don’t link, that’s fine. It’s a free country after all. As the great author Neil Gaiman says:
If you accept—as I do—that freedom of speech is important, then you are going to have to defend the indefensible. That means you are going to be defending the right of people to read, or to write, or to say, what you don’t say or like or want said. 2
That’s why what PayPal did is unacceptable. They are using their size and popularity to bully sellers into falling into step with their definition of morality. PayPal is playing judge and jury here, and they have no right to do so. They are a payment platform, plain and simple.
If a seller has content that is illegal, then it should not be sold. But it is not PayPal’s place to decide this. That’s why we have law enforcement. If content is in a gray area (like what Smashwords’ titles were in) PayPal needs to stay out of it. They do not need to be playing the corporate censor.
In my opinion, PayPal is a broken, dangerous company to accept payments through. If you or your business use PayPal, be very careful.
With all these troubling events happening, Rocket No. 9 made the decision to stop supporting PayPal. We cannot in good faith take payments from our clients over a system that is so broken and ripe for error.
Instead of PayPal, we started using an awesome payment platform called Stripe. It’s what is currently powering our new secure payment page at:
If you are concerned about using PayPal in your business, please contact us so we can discuss other payment provider options. We can set your business up with a secure payment page that doesn’t use PayPal.
 read more of Mr. Gaiman’s thoughts here: http://journal.neilgaiman.com /2008/12/why-defend-freedom-of-icky-speech — it’s a long read, but has some excellent points