Beware PayPal's Donation button

[fenris-lorsrai.livejournal.com]

I've seen some artists using Paypal's Donate button when they do a donation drive for a specific need or for variable rate commissions as donations. This may not be a good idea...

This is blowing up on internet right now, but PayPal came down on website Regretsy for using the "wrong" button to collect donations to provide holidays presents to the children of crafters in need. Been picked up by Consumerist

Basic issue: payPal lets you use the "donate" button to collect money without vetting you are a charity... but then gets to decide if it really is a "worthy cause" or not and may shut down, freeze, or lock account... including funds NOT from the donation button.

post on Regretsy at initial limiting
Update after Paypal locked ALL funds (including ones not collected through the donate button) for six months

something awful had a similar experience with donations for Katrina

You probably won't have this issue with small donations... but large ones may catch their attention and put you in a similar situation.

EDIT TO ADD: bunch of open source projects that had donations frozen

EDIT #2 Screenshots and breakdown of PayPal's TOS and AUP, plus PayPal rep encouraging use of the donate button by non-charities

EDIT #3 (geez I am the edit machine)
Paypal issues press release saying they HAD unlocked the money... but issued statement before actually doing so or actually talking to Regretsy Paypal's not very apologetic apology (there were also repeated reports that they were deleting comments left on the blog. those are obviously hard to prove one way or the other)
and then another update!
Paypal does...something. maybe. we think
I honestly can't figure out, if they ONLY want the button used by vetted charities, why they offer it to non-vetted individuals at all! There is a difference between personal and business account features, this should be stupidly easy programming to only allow use of the donate button to vetted charities.

Comments

[sigilgoat.livejournal.com]

This is why I am making the transfer over to Dwolla. It's only U.S. based (I have my AlertPay for international stuff!) but the fees are exceptionally reasonable, and they look like a promising alternative.

Transactions under 10$ are free and all others are .25$

[razzek.livejournal.com]

Is AlertPay working again? I've lost over $112 through them recently and am officially wary of their services.

[neolucky.livejournal.com]

This would be why official non-profit charities and donation drives don't use paypal. It's simply not a legit way to make tax free donations =| I get asked why my kidney fund wont accept it, and I have to repeat myself constantly: Paypal is shitty to work with for donations.

[anjel-kitty.livejournal.com]

Wow that donate button is just more trouble than its worth. Seems like a scam they even have it on the site, and the fact that the "worthy cause" is so subjective ( who even gets to determine if it is "worthy") mean I'll never use it.
I must check out these alternatives to paypal sometime.

[breakspire.livejournal.com]

I'm so disappointed with paypal over this. I'm really hoping they do something to correct it.

I had donated to the fund when she posted about it, and it was refunded a few hours ago :/

[oceandezignz.livejournal.com]

After seeing what had happened to SomethingAwful - I never ever have suggested PP be used for donations. This seals the deal.

A Kickstarter would have been a better idea - especially since they got such an amazing response just by going through PayPal alone - a Kickstarter fund drive might have been a better bet somehow.

But yeah- this is why I don't keep funds in PayPal any longer than needed. Too risky.

[sigilgoat.livejournal.com]

I think they didn't go with Kickstarter because of the Amazon payment thing, but I bet they're looking into it now. So sad :/

[blitzava.livejournal.com]

I just used paypal donations to accept (not tax free, I'm not a rescue) donations for a dog I was getting out of a bad situation (and is now biting sleeping at my feet). I've never used the donation buttons really but the forum the rescue was organized through suggested it because my paypal card would have instant access and I could use the money right away for gas, emergency dog supplies (damn former owner wouldn't even give me a collar to walk the dog out to the car with -_-). I used a combination of the button and just giving my email adress, does anyone know if this is button specific?


I'm a little nervous because I got a few I got a few amazingly impressive donations ($100 towards the vet visits from a single person, a few other larger $75+ ones for equipment and vet costs)....I really hope I don't get flagged. I'm withdrawing the vet funds tommorrow, I don't want those locked, I can only cover about half the expenses out of pocket....not cool

[fenris-lorsrai.livejournal.com]

It seems to be specific to the Donate button. But they may flag the account for "suspicious activity" and hold money if its a lot more activity than usual.

[dingybatty.livejournal.com]

Wow <:( Paypal certainly has an evil side.

[amocin.livejournal.com]

Well darn... I take donations for my comic, which isnt a 'worthy cause' as its really just providing others entertainment. Adult entertainment no less.

I have no idea what I should do, aside from make sure that the money is always transferred to my bank. In the case where they apparently refund it back to its source... can they take it out of my bank to make up for that refund? Or as my account on Paypal is currently at 0 dollars would that put me in the negative should they decide to block me for my apparent donations?

[sigilgoat.livejournal.com]

I transfer if it goes about 20$ or so, personally. If they refund, it would come out of your current balance, and they can't do anything once it's in your bank (other than if you authorize a transaction)

[frazzled-niya.livejournal.com]

way to loose business paypal :\

[crimson-flygon.livejournal.com]

I have been frustrated with paypal myself. Gritting my teeth at the seriously overpriced business fees aside, in the past year despite never having any negative change in my business they started a string of "we're holding your funds now" "now we're not" "now we're holding them again" "now we're not," at seemingly random intervals. Not to mention trying to reach out to human beings was laughable.

As a regretsy follower this just disgusted me beyond belief. I want to stop using paypal and I want to use something else but the problem is what else is there? Especially something that would be etsy-shop friendly... does it even exist or do they truly have a monopoly on the internet finances. :(

[rogue1717.livejournal.com]

I wish Etsy would just implement a secure way folks could enter in credit card info so those of us with square accounts could process them that way.

[jakejynx.livejournal.com]

Despicable!!

[everainsley]

Yeah, a blogger I follow almost lost her PP account for using the donation button, BUT, they contacted her first to let her know.

Still. *sigh* As someone without a bank account right now, and no way to get one, I kinda have to stick with PayPal. Everything I do online is paid for through it, and I have a PP debit card, so even places that don't accept PayPal directly get payments through there. Even RL purchases use PayPal if I have the money there.

So, I guess I will go change my "Tips" button.

[jaswinder.livejournal.com]

Wow - I always thought the 'Donate' button was just a 'Buy now' butto that allowed the user could choose a price.

I guess any non-non-profit would be better to just set up donations as 'Buy Now' buttons at a few different rates for anything collecting ongoing donations (I've noticed a lot of blogs have a 'Buy me a coffee/beer' button that's basically just a $5-$10 set donation) and Kickstarter or http://www.microgiving.com/ for things that have a specific goal amount.

[wingsofjudas.livejournal.com]

The "buy me a coffee/beer" thing is kind of clever. I've never noticed that before... I think I might implement something along those lines instead of taking the risk of having my account messed with.

[nijipie.livejournal.com]

That's horrible. 8(

What I don't understand is why can't you use a 'donate' button for a 'charity'. And if you can't use 'donate' what button are you allowed to use that won't get your account frozen?

Are they losing money by people donating to an account?

Are there any other businesses that you can use to make money and accept tips/donations from people where they won't freeze or close your account when it suits them?
This really bothers me. I've just started doing commissions and they've already put a lock on my account for suddenly having money coming in, and I was thinking about putting up a 'tip' jar but really. 8( This is just awful.

[ainoko-ironrose.livejournal.com]

Here is petition to sign to try and force paypal to restore christmas account

http://www.change.org/petitions/president-paypal-unfreeze-regretsys-account-to-help-children-in-need

[hellfire99x.livejournal.com]

Mmm. Stories like this are why I hate Paypal and avoid them as much as possible. I admit to using them recently to buy a bundle of games, but only did so because it didn't require I open a Paypal account.

Otherwise, I'll use anything else besides them. IPMOs? Oh yes, I've done that. :P

[astraldescent.livejournal.com]

I wish there was an alternative to paypal/ebay but they pretty much monopolize payments and auctions, respectively. Sure there are some other options, but the issue is getting EVERYONE to adopt these alternatives, some of which might not have the relative ease of use that paypal does.

I never have a remaining balance in my paypal account- I transfer directly from my bank for purchases and I transfer directly to my bank when I receive payments (unless its for a still incomplete commission or I received it in error etc).

Still, I dont like encouraging their behavior by patronizing their businesses. For furry stuff, there are alternatives. For other things.... not so much. Craigslist is horribly unsafe so I don't even consider it an option and some items have a limited market even on ebay, and a nonexistant market elsewhere.

[copper-curls.livejournal.com]

Also, if I remember correctly, eBay requires sellers to accept PayPal as a method of payment. They can take other methods if they like, but they really push PayPal. Not surprising, since they own PayPal - or it owns eBay...

[silvertales.livejournal.com]

This is despicable! The transcript of the conversation had with an actual, real-live person is infuriating... the complete and utter lack of service or responsibility or even "let's try to work this out" is just.... *grr*

I have a donate button for my holiday card project and commissions, and I'd like an alternative to PayPal (I could NEVER understand why the donatee takes the fee hit instead of the donator) but, really, what else is there?

Seriously, IS there an alternative to PayPal?

[sigilgoat.livejournal.com]

Dwolla is for US only, but looks very promising in my opinion!

But I have no answer for international orders.

[zombienerd.livejournal.com]

Good news is that some news groups have picked up the story. I'm hoping to see this covered even more. I'd close my PayPal like lots of users on Regretsy are but I haven't picked an alternative and I was planning on getting the stuff from Ebay D:

[theblackdragon.livejournal.com]

i remember when PayPal locked up Something Awful's donations toward Hurricane Katrina relief efforts (http://www.somethingawful.com/d/news/paypal-fiasco-summary.php). this isn't the first time they've jerked people around who were just trying to do a good thing, it won't be the last.

[oceandezignz.livejournal.com]

This looks interesting a bit. I dunno how I ended up at this site, but I did. Looks like a bit of work to set it up though and merchant accounts are US-only: Stripe (https://stripe.com/). Quick n' dirty way to take credit payments online.

EDIT: Found We Pay (https://www.wepay.com/) as well.

Sheesh so many alternatives - I wish the internet would take them!

[merlin-the-wise.livejournal.com]

Yeaah, so many alternatives, Stripe is US-only, Dwolla is US-only, WePay is US-only... hmm

I'm still waiting for a decent international service, because I haven't seen anything besides PayPal, which really sucks =/

[skirtandzy.livejournal.com]

I still find this whole story a little fishy.
I want all sides of the stories and all the facts before I believe one way or another.

[dakotabailey.livejournal.com]

I'd love to see the entire conversation

[synviver.livejournal.com]

I really want to close out my Paypal account having read this, but unfortunately I live in Canadia-land and I haven't the foggiest what alternatives there are. I saw AlertPay and Google Checkout mentioned, but the comments regarding them make me leery about swapping.

Then again, I'm at a 0 balance in my Paypal account and don't have any commissions coming in, so it's not like I'm using it right now anyways. Just... very displeased to read this. D:

[felisepia.livejournal.com]

Same here... I've been fed up with PayPal and would LOVE to find an alternative, but there doesn't seem to be much available for Canadian users. I do have an AlertPay account, but I haven't used it yet and likely won't be for a good long time if they're having problems :/

[leahtaur.livejournal.com]

Oh noooo. D: That's so sad. Punished for trying to do some good.

I am just about to release a comic that was going to have a donation/tip jar, possibly even have a per-page quota like Demicoeur did recently. Now what am I going to do? All I can think to do is have people contact me if they want to donate and then have to invoice them, which is... unwieldy and time-consuming. I'm Canadian so Dwolla is out, and AlertPay is suffering difficulties... agh.

[thaily.livejournal.com]

Yeah, as a regular Regretsy reader I'm once again exasperated and disgusted with Paypal's actions.