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]

I read something about invoicing too, but it said it wasn't for peer to peer transactions? @______@

[razzek.livejournal.com]

I didn't even know peer to peer transactions were even an option for GW. o.O I've read about the invoicing, too, but I'm not sure what to make of it (it sounded like a good thing). *shrug*

[jaswinder.livejournal.com]

I don't know anything about Google Wallet, but Google Checkout is kind of wonky for services or digital purchases (ie ones that don't require shipping and inventory management) and is kind of shitty and confusing in general in my experience. You have to do things like set an order to 'Shipped' before it will process a payment. Like all Google products, an intuitive user interface is at the absolute bottom of their priority list.

You don't really need a store for Google Checkout though- you just end out email invoices rather than someone going to Paypal and putting in their information. Unfortunately it will also really nag them and make it unnecessarily difficult for them to check out if they don't have a google account, unless they've made that smoother.

[sigilgoat.livejournal.com]

They still say you need to have a google account to use it. hnngh

[kaputotter.livejournal.com]

Just a heads-up but the last time I read Checkout's TOS they restrict the sale of adult items in any form AFAIK.