Regretsy reader Erica reported a complaint about how she recently sold an old French violin to a Canadian buyer. The buyer disputed the authenticity of the label so PayPal required him to destroy the violin and send over photographic evidence of it. This is part of PayPal’s dispute resolution statement.  Even though the label may not have been correct, the actual violin was pre-dated from World War II and it was authenticated by an experienced luthier that was valued at $2,500.  Erica said that PayPal “100% defended their action and gave me the party line.” [Regretsy via Laughing Squid]

Yahoo! Inc. has hired Scott Thompson as Chief Executive Officer, effective on January 9, 2012. Tim Morse will return to his duties as Chief Financial Officer, who was serving as the interim CEO when Carol Bartz was fired. Thompson has also joined Yahoo!’s board of directors. Thompson served most recently as the President of eBay subsidiary PayPal.

Earlier this month comedian Louis C.K. released a torrent video of his “Live at the Beacon Theater” for the $5 DRM-free download. Either you can visit his website and pay $5 or you can pirate it yourself. Louis C.K. fans are showing their support by paying for it as there is now $1 million in his PayPal account. It only took about 12 days to hit that number. C.K. is paying $250,000 in costs for the website, $250,000 to his staff as a bonus, and $280,000 will be given to charities such as Kiva, Charity:Water, Green Chimneys, The Pablove Foundation, and The Fistula Foundation. [TechDirt]

eBay Inc. (NASDAQ:EBAY) subsidiary PayPal is going to start competing head-on with Groupon and LivingSocial by offering daily deals starting next year. The coupons will be based on the buying habits and mobile locations of their users. PayPal has partnered with 200 U.S. merchants on this initiative said PayPal President Scott Thompson.

Regretsy is a blog that makes fun of products and sellers on e-commerce website Etsy.com. However Regretsy recently decided to start collecting donations to give to poor children for the holidays. It turns out that PayPal forced them to refund donations because they used a button widget that was supposed to be used for nonprofits. Now PayPal is backtracking on this request in the midst of all the bad publicity.

PayPal co-founder Peter Thiel is putting some of his wealth into an interesting cause. He has put $1.25 million in to create and promote floating micro-countries. Thiel made the investment through The Seasteading Institute.

Kabbage, an online merchant lending startup, has raised $17 million in new funding. The investors include Mohr Davidow Ventures, BlueRun Ventures, David Bonderman, Warren Stephens, the UPS Strategic Enterprise Fund, Jim McKelvey and others. Kabbage lends money to online merchants using PayPal’s Adaptive Payments API. [TechCrunch]

John Christman went to upgrade to the Lion operating system on July 23. He thought he only had to pay $31.79 after the sales tax, but PayPal ended up charging him 121 extra times for a total cost of $3,878.40. D’oh!