( CNN ) -- PayPal has backed off an online spat with humor blog Regretsy after getting withering Web feedback for shutting down a drive to buy holiday gifts for children in need . And the online payments service is even chipping in to help buy a few more gifts after temporarily shutting down the Secret Santa fund because the for-profit site was running it . `` ( W ) e can confirm that the funds have been released and we are working directly with the account holder on this matter , '' a PayPal representative said via e-mail . `` We are also making a donation to Regretsy to help families in need this holiday season . We 're very sorry this occurred . '' Run by actress-comedian April Winchell , Regretsy is a snarky blog created primarily to mock what it considers awkward , ugly or otherwise head-turning offerings on the arts-and-crafts site Etsy . But , perhaps in a bid for some good karma , the site maintains a charity fund that has given money to causes from breast-cancer research to Etsy community members in need . Last month , Winchell , who uses the pen name `` Helen Killer '' on the blog , put out a call for community members who knew of children at risk of not getting gifts this Christmas . On December 1 , she announced that 200 children had been approved and put out a call for donations -- one that she wrote raised thousands of dollars in a few hours . `` You people make me sick , '' she wrote , mocking , as she frequently does , the tone some Etsy users take when they find their work has been featured on Regretsy . `` Funded . Overfunded , in fact . In just a few hours . We now have enough money to make gifts to the families , as well as these kids . Good job a -- holes . '' Then came the trouble . On Monday , Winchell wrote that PayPal , which was processing the donations , shut down the drive because she had used a `` Donate '' button that she learned is only for nonprofit groups . She said she had a `` very long and jaw-dropping conversation with an incredibly condescending representative , '' who told her she had to refund donations . She wrote she hatched a plan to return the donations , then `` sell '' the toys that had already been purchased to the donors , only to be told that , too , violated PayPal rules . PayPal said it has clear guidelines for any business that uses the service to collect donations . ( The statement did not directly address whether Regretsy had violated those guidelines , saying it ca n't comment directly on accounts due to privacy policies ) . The representative said such guidelines are required by law . `` We appreciate that this can be an inconvenience , but we have a responsibility to all our customers -- both donors and recipients ; or buyers and sellers , '' the PayPal rep said . `` In this instance , we recognized our error and moved as swiftly as possible to fix it . '' In a post Tuesday afternoon , Winchell thanked her supporters . `` I would also like to say that I did not expect this kind of global outpouring of support , and I truly believe that had you not all made your voices heard , no one from Paypal would have ever felt compelled to make this right , '' she wrote , noting that `` Regretsy '' had become a top trending topic on Twitter . `` There is no real support or appreciation for the consumer anymore . The customer is always wrong . `` I am extremely grateful to all of you for your efforts . If Paypal is sincere about allowing us to make these gifts , you will have made a difference for 200 children and their families this holiday season . '' In an email later Tuesday to CNN , Winchell said she 'd had an `` encouraging '' conversation with PayPal and that they were still discussing a donation to the fund . After responding to a CNN request , PayPal 's blog was updated with a post with the same statement , attributed to Anuj Nayar , director of communications .
PayPal backs off Secret Santa ##s with blog Regretsy . Regretsy 's founder said PayPal shut down a fund - raising . PayPal said it will now donate to the charity and issue has been resolved . It mocks offerings on sister site Etsy but also contributes to charities .