This blog post is a followup to a previous post titled, "A Store Is Born".
After months of asking PayPal how we violated their Acceptable Use Policy, we finally received an answer in late May. We believe our early May email to several PayPal Board of Directors and CEO Danny Schulman prompted PayPal to respond to our request for information. As we previously reported, PayPal continually told us they had no requirement to tell us how we violated the Acceptable Use Policy, resulting in Permanently Limiting our PayPal account, and destroying our successful business.
In the May 26 message from Kimberly (Executive Escalations), she provided details about specific products we were selling in our eBay store that violate the Acceptable Use Policy. With the exception of one class of products (CBD), we agree that we were selling products that are broadly included in the Acceptable Use Policy as not allowed for PayPal transactions.
Our issue is how PayPal and CEO Danny communicate with and treat their customers. Here are the facts:
- Who actually reads the fine print of User Agreements when signing up for any account? By design, these agreements are written in legalese that non-attorneys find difficult to understand. PayPal should make their User Agreement and Acceptable Use Policy easy to read and clearly understandable – especially, if these policies may result in closing an account.
- The products we were selling that violated the Acceptable Use Policy had been in our store for many years. Additionally, numerous other eBay sellers and independent online stores were selling the same products and used PayPal as their payment processor when our account was closed. In fact, there are many online stores selling these same products and using PayPal as a payment processor today. Why are policy violations not uniformly enforced? Were we discriminated against because of our age, our ethnicity, or our occasional complaint about PayPal policies?
- Over the years, we contacted PayPal about various customer claims and transaction issues. During these conversations, PayPal was well aware of the products we sold. In fact, there have been customer claims related to the specific products PayPal states violated their Acceptable Use Policy. At no point, did PayPal tell us we were not allowed to sell these products.
- Why not contact us about the violation and give us an opportunity to remove the products from our store? In our opinion, this shows Danny’s lack of understanding of the challenges small business face on a daily basis. Danny lives in a world far removed from the average person and average small business. Destroying a successful small business must not register as a problem to someone who earns more in a week than many small business owners earn in a year.
- Why withhold the reason our PayPal account was Permanently Limited? It took seven months, numerous letters, and dozens of emails before Kimberly shared the details. What about the numerous other PayPal customers who experience an abrupt closure (Permanently Limited) of their account and are never given a reason? In our opinion, this behavior is wrong on so many levels.
- When our account was Permanently Limited, we were told by PayPal that the funds in our account would be released in 180 days. The reality is that buried in the fine print of the User Agreement is a policy that PayPal will keep $2500 from any Permanently Limited account balance to recover “damages”. What damages? This is a just a greedy money grab by CEO Danny.
We raised enough hell and contacted the right people, that CEO Danny suddenly changed course and handed over about 90% of the funds he was holding from us.
To be clear, we violated the Acceptable Usage Policy. Although, the policy is vague and complex. In our opinion, the list of prohibited products is outdated and rather puritanical. The products we were selling were legal herbal supplements and legal CBD topicals. We actually were not selling CBD products with PayPal as the payment processor.
We did not knowingly violate the Acceptable Usage Policy.
In closing, our beef with PayPal is the terrible customer service, deceptive communication, sneaky money grab, and failure to clearly make customers aware of their policies. PayPal is a Wall Street darling; therefore, Congress and Federal regulators have no desire to investigate PayPal. CEO Danny can get away with treating customers like dirt.
You also have to question the motives behind the PayPal Board of Directors. In our opinion, you have to look no further than the compensation of a Board member to understand their motive. One Board member that stands out to us is Gail McGovern. Ms. McGovern is the CEO of the American Red Cross. Her organization is charged with helping people suffering from tragedy and personal loss. Yet, she serves on the Board of PayPal – an organization that based on our experience doesn’t give a damn about closing a small business in a callous and deceptive manner. Maybe her $355,000 annual compensation (retainer and stock) from PayPal helps her put her American Red Cross values aside when she slips on her PayPal hat.
Bottom line, CEO Danny just doesn’t get it when it comes to supporting small companies.