Did PayPal’s apology solve its Grinch problem?

After a dust-up with Regretsy over whether a gift exchange for needy children met its policy guidelines, the online payments service is trying to avoid looking hard-hearted.

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Paypal had a tough day Tuesday. It was such a bad day that Twitter users were announcing their switches to competitors and the company’s Facebook wall was loaded with comments about closed accounts.

The outpouring of rage was over the freezing of Regretsy’s account when the popular blog, according to PayPal, incorrectly used the online payment service’s “donate” button for a holiday gift exchange for about 200 needy children. The idea that the company was keeping toys out of the hands of kids—all the while collecting fees—infuriated many.

After several hours of online tumult, PayPal issued an apology, stating it would release Regretsy’s funds. But it perhaps wasn’t enough to keep the company from appearing Grinch-like, PR experts say.

Grading the apology

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