PayPal Steals Christmas: Latest Social Media PR Meltdown

It’s the festive season and the social media PR meltdown shows no signs of slowing down. Global player PayPal have just rushed in to join the act with an incredibly insensitive approach to those in need and the kind of mindlessness which only companies that do not have the nuanced approach to social media and 21st century customer service can achieve.

To be fair, PayPal is not alone in this arena. Clamouring to get in on the act is just about every major player out there. However, right now the spotlight is upon them and the way they mishandled this is truly worthy of some attention.

First the background to the story. Regretsy, a site which is active as a blog and runs occasional eCommerce initiatives and the Regretsy community, launched a toys-for-tots initiative for Christmas using the PayPal ‘Donate’ button. PayPal claim that the Donate button is available to non-profit organisations only (their literature actually says “worthy causes” and I have seen it on the sites of many bloggers) and in a move presumably designed to safeguard the integrity of the PayPal service (lest we think that somehow they are accessories to online fraud and therefore blacken their reputation) they shut down Regretsy’s PayPal account and froze, for good measure, its owner’s April Winchell’s. account.

The full exchange between April and the PayPal representative is here and I strongly recommend you take a look. What stands out from this, however, has the by now overly familiar feel of a company incapable of handling customer service and social media exposure.

For instance, the PayPal representative who obviously was never taught how to handle a situation like this and was left to act on their own without any support actually puts on record that the difference between a ‘worthy cause’ and a ‘charity’ (and let’s keep in mind the emotional cadence of helping poor children at Christmas) means that “You can use the donate button to raise money for a sick cat, but not poor people.”

Regretsy’s case might not fall in the run-of-the-mill cases where PayPal has to act with the righteous wrath of an angry god, which is why there are managers above the paygrade of the troops dealing with this. The response to a request to speak to a supervisor was however: “No one above me will talk to you. No one at my level ever makes phone calls. We’re only doing this to help you.”

Predictably Twitter and Facebook run red-hot with complaints. PayPal’s Facebook page was getting dozens of hate posts per minute with the predictable and ever-so-wrong response of PayPal beginning to delete some of them. With #PayPal trending on Twitter sentiments ran from the very charitable: “Want to seriously damage your company's reputation (and business model) overnight? Here's how.... regretsy.com/2011/12/05/cat… #paypal #iseestupid” by LAGilman to the unprintable.

Faced with this onslaught PayPal relented and their Director of Communications, Anur Najar, announced in the official PayPal blog that the issue had been resolved. The announcement is straight of the Blackberry corporate communications playbook, i.e. economic in its apology (never really saying they were sorry), offering a corporate front to hide behind “…we can’t comment specifically on the account due to our privacy policy.” and, for good measure added “We appreciate that this can be an inconvenience, but we have a responsibility to all our customers.” the subtext here being  that PayPal was really acting for the benefit of its core customers who do nor do crazy things like try to donate money to children (remember sick cats are OK).

It’s the festive season and things can get a little silly, it’s time however corporations started to shape up. The social media honeymoon is about to end and, unless they truly begin to ‘get it’ they will see a serious impact on their business in 2012.