Depends on what basis you made that decision. If you stated that it was because I was white/black/brown you would be in serious trouble. Yes I couldn't make you work for me but I would make sure you didn't work for anyone else again. (Not a personal thing just a hypothetical case)
I am surprised how defensive people are about these scumbag companies.
BTW I know about the Royal Mail proposal to ban shipping airguns some years ago. I was a contributor to the consultation feedback.
PS Paypal allow me to deposit cash. I can use it to pay for goods in the future. IN MY OPINION that makes them more a bank than an escrow service and they should behave like a bank.