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What PayPal and Regretsy can teach federal social media managers

Let PayPal be a lesson to you: When your agency messes up, fix it fast or face the wrath of social media denizens.

Here’s what happened: A website called, which exists primarily to make fun of bad handicrafts being sold through, decided to spread some holiday cheer by setting up a gift exchange program. Regretsy planned to buy gifts for about 200 children, paid for by small donations from its users.

PayPal shut the operation down, froze the funds and froze Regretsy owner April Winchell’s personal account as well, and her calls to customer service were met with condescension.  A snippet of Winchell’s transcript:

PAYPAL: Only a nonprofit can use the Donate button.

ME: That's false. It says right in the PDF of instructions for the Donate button that it can be used for "worthy causes."

PAYPAL: I haven't seen that PDF. And what you’re doing is not a worthy cause, it’s charity.

ME: What's the difference?

PAYPAL: You can use the donate button to raise money for a sick cat, but not poor people.

(This is a simplified version. Read Regretsy’s full story here – be aware there's an image containing a word that might not be safe for work – and an analysis on the blog “Geek Girl” here.)

That was on December 5. Within a day, PayPal issued a sheepish, although vague, apology and said that Regretsy’s funds have been released.

What happened in the hours between Regretsy’s posting the story and PayPal’s apology is instructive.

The story went viral. Almost immediately, PayPal’s Facebook page was flooded with angry user comments. Many people canceled their PayPal accounts, or at least threatened to. Twitter also exploded with fury, as did a number of blogs. We can assume PayPal got a lot of direct e-mail messages about it too, although there’s no way to be sure.

A sampling of the Facebook messages:

“ It’s absolutely appalling the crap you guys are pulling with Regretsy. Congratulations on successfully screwing families out of some much-needed donations because you’re greedy bastards who care more about red tape than people. I hope the Karma carousel comes full circle and hits each and every one of you with the force of a fully-loaded bus.”

“Your policies and behavior towards the Regretsy community in regards to the toys and money raised to help needy families this holiday are deplorable and reprehensible. To deny these families a small bit of cheer given them by other hard working families – while still making sure your own pockets are lined with the fees generated- has me DISGUSTED with this company. “

“Wow ... You guys got the smack down today; a well deserved 'wake the hell up' on your criminal policies and terrible support. You have been a pain the arse for years but this story from is unbelievable, you have outdone yourself this time.”

So, pay attention, social media users. Agencies also have customer service functions, and the lesson here is: Social media moves fast. If someone in your organization commits a faux pas of this sort, the best lesson you can draw here is don’t wait a day – or even half a day or several hours – to put things right and announce to the world that you have.

As a matter of policy, that means agency employees who speak for the agency on an official blog need a certain degree of free rein. You can't wait for a message to go through several layers of approval and revision. In the social media world, reputations can suffer a lot in a short time.

Posted by Michael Hardy on Dec 06, 2011 at 7:25 PM

Reader Comments

Mon, Feb 13, 2012 PayPal Dispute

PayPal's Facebook page was flooded with angry user comments. Many people canceled their PayPal accounts, or at least threatened to

Thu, Dec 8, 2011

The review process wasn't the issue - it was the horrible customer service that prompted the outcry. They made her refund what hadn't already gone through, made fees on both the incoming and outgoing funds, then when Regretsy went to go and "do things the proper way", this according to the rep. she spoke to, they halted the process mid step and made her refund the money AGAIN, making more money off the fees. Then they shut the whole thing down. They refused to treat Regretsy with any sort of respect, and it was the combined anger of people who had had enough of being the little person that threw the whole thing over the edge. And the drive was to give little kids presents on Christmas morning - a worthy cause, and something worth fighting for.

Wed, Dec 7, 2011

So now anyone can ask for donations on PayPal for anything, without any kind of oversight? Wow, the opportunity for Holiday charity scams just got a whole lot bigger! People protesting this action don't feel there are already enough established charities doing good work? Or enough scams?

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