PayPal’s subscription service seems to finally be back up after a tense Labor Day weekend outage, affecting thousands of small businesses who rely on the service across the web. Apparently, even though subscribers were able to pay normally since the downtime began, those payments weren’t reaching site owners. In some cases, subscriptions were mistakenly suspended, leaving behind unhappy customers and irritated store owners. The real issue, however, is not the technical difficulties that have prevented PayPal from making payments to its merchants… instead, it is the horrendous way that PayPal dealt with informing their customers about the outage. After the service stopped working on August 30th, PayPal didn’t immediately notify its users of the problem, causing frustration and panic on the part of store owners. Here’s an account of one merchant who spent almost three days trying to get an answer as to why his customers’ automatic payments weren’t coming through. It wasn’t until September 1st that store owners were notified of the issue, and a notice was finally posted in the PayPal Developer blog (the entry has since been deleted). Merchants finally were assured that the payments had been made, they would get their money… even if it was a little late.

The way that PayPal handled the outage is truly a lesson in customer support. If your store or product experiences an issue that will drastically affect customers (a server outage, a mass shipping error, a mistake in added tax, etc.) the important thing is get the word out that you acknowledge that a problem exists, and you’re taking the necessary steps to fix it. Don’t force your customers to wonder for days if and when the problem will be addressed.

Were any of you affected by the PayPal subscription service failure? We’d love to hear your experiences in the comments.