Until recently, I've been relatively happy with the service I've been getting with PayPal. I have an account set up to accept donations on behalf of AbiWord. We've received a few thousand US Dollars in contributions from satisfied users and well-wishers, and we're very grateful for their financial support. We've used the money to buy hardware, sponsor meet-ups, fund bug-bounties, patch prizes, and the like.

In the past few months, though, things have started to turn sour. We've gotten more than the usual number of $5 donations, which is curious given the economic downturn that many major world economies are in. Perhaps not-unexpectedly, the majority of these payments have gone through PayPal's chargeback/dispute resolution process, and perhaps more should go through still. I think that we had ~1 chargeback over the past 5 years. We've had about 5 per month these past 2-3 months.

Though well-intentioned, PayPal's dispute resolution process is unnecessarily opaque to the "seller" - little to no information was given to me regarding the nature of the charge-back. The sole exception has been a case where I was informed that the buyer's credit card issuer initiated the chargeback. Given this little information, I can only fathom a few possibilities for the disputes' causes (in increasing order of malice):

• People are reneging in droves on their donations to a small, volunteer-run project
• The "buyers" have stated that we didn't deliver an item to them, which is preposterous, given that the account is used as a tip jar
• People are stealing credit card information, and using the stolen cards to make small donations to a F/OSS project. Why on earth one would do that, and why AbiWord/I would be picked as the target, boggles my mind. Occam's Razor, though, leads me to believe that this is the case.

Besides being time-consuming and (unnecessarily) frustrating (which I'd grudgingly accepted as the cost of using the PayPal service), the chargebacks also sometimes come with fees, making the tip jar cost us both time and money. In effect, we're being both inconvenienced and robbed because PayPal accepted a stolen credit card and then transferred a small amount of money to us, minus their processing fee. Anti-donations, if you will. PayPal is not the one committing the alleged fraud, so I don't expect them to absorb the costs. But neither am I.

In light of all this, I've closed the tip jar and recommend that other F/OSS projects not use PayPal (or at least be warned of our recent ill fortunes), at least until their dispute resolution process is vastly improved.