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PayPal offers payback for outages

Online payment company offers an olive branch to its customers by eliminating its transaction fees for the day.

PayPal is dropping its transaction fees on Thursday in an effort to make up for a series of site outages that crippled its services earlier this month.

The online-payment company, a subsidiary of Web auctioneer eBay, said it is dropping the fees for one day to thank customers for suffering through the situation. Existing PayPal Premier or Business account holders will be credited completely for transaction charges during the 24-hour period, the company said. However, PayPal customers in the 16 European Union countries and Switzerland are not eligible for the offer. The company did not specify why those countries are excluded.

In mid-October, access to PayPal's services was obstructed intermittently over several days after the company encountered a software glitch that locked some of its customers out of their accounts and crippled the ability of eBay users to complete online transactions. PayPal's online debit cards were also affected by the technical hiccup. After fixing the issue, company officials acknowledged that the problem was related to a routine coding update to the site.

San Jose, Calif.-based PayPal said there is no limit to the number of transaction-free payments for the day. The company also said it will automatically add up the fees accumulated and send the appropriate credit to all qualifying users' accounts by Nov. 25. The offer started 12:00 a.m. PDT and lasts until 11:59 p.m. PDT.

In June, PayPal reached a preliminary settlement with customers who accused the eBay unit of illegally freezing their funds. It promised to pay a total of $9.25 million to settle the suit, $3.4 million of which would go toward paying the customers' lawyer fees.