Photo: Contributed

A tussle between PayPal and the laugh-centric blog Regretsy is heating up after the web-based payment system shut down a holiday drive to purchase presents for needy kids.

But Paypal has since backed down in the spat, with the company even throwing in some cash to help get a few more gifts.

The flap erupted when PayPal closed the secret Santa fund because it was being operated by Regretsy, which is a for-profit site.

Regretsy is a niche blog that mocks ugly arts-and-crafts projects posted to the popular creative website Etsy.

Despite its snarky tone, however, Regretsy has a charity fund that has given money to a variety of causes, including breast-cancer and impoverished site members.

Comedian April Winchell runs the site, and last month, she asked community members to submit names of needy children. After a flood of submissions, she announced that a total of 200 kids had been approved on Dec.

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Members were then asked to kick-in cash so the 200 kids could get presents, with response coming quickly.

"You people make me sick," Winchell wrote, using her trademark, prickly tone. "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."

But PayPal soon moved to shut down the fund, citing regulatory concerns.

However, after the story went viral online, PayPal was forced to reverse its decision.

"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," a PayPal rep told CNN.

"In this instance, we recognized our error and moved as swiftly as possible to fix it."

File: CTV