First, you have State laws. In some cases you are not allowed to extinguish (read: pocket) stored value, nor are you allowed to have the same effect by "nibbling it down" with monthly, storage or inactivity fees. For instance that applies to pretty much every retail gift card (McDonalds, Target, AMC theaters, etc. Because they have presence in at least one State with those laws. Your customer could move to such a State, and now you are up the creek. For instance his IP is now coming from Poland, and now he's under EU laws. You must comply with the most restrictive laws of any State in which you hope to draw customers.
After that, listen to Customer Service
They've dealt with customers in the past, and they know which method is going to cause the minimum friction, user rage, and social media blowback. Those things are important.
But still, have "delete" functionally be a "suspend"
I certainly recommend that when someone "deletes" their account, that you simply flag it deleted. This is normal; even MS-DOS didn't eradicate a deleted file, they simply marked it deleted and otherwise left the file there. This protects YOU from the consequences of a prank or malicious account deletion. It also protects the user from an emotional "ragequit" that he later regrets. For instance, in Blizzard games, you can delete your account all day, but the hewn-over-years progression of your characters is not deleted, and you can "undelete" your account almost as easily as logging in again. To truly obliterate the account, you need to delete, wait out a 30-day cooling-off period, then send CS a bunch of documentation to prove who you are. It's too much trouble; if they get 10 of those a month, I would be shocked. And even then I bet if someone made a good case to CS that their PvP enemy had forged all that, there's a backup tape somewhere they could fish the data back out of.
Mind you, retaining your account's in-game data is not the same as retaining the customer's PII. Here's what is not PII: the fact that you have 6 of 8 pieces of the Legionkiller armor, 40 stacks of Mithril ore in your bags, or 1.2 million gold in your bank. (In at least some Blizzard games, it's difficult and extremely circuitous to convert cash to game gold.)
Even if you needed their PII to reinstate their account, nothing says you can't take the PII you already have, normalise it, take salted MD5s of it (in several slice directions) and store that. Now to reclaim their account they need to be able to repeat back the PII they gave you before and one of the sliced MD5s has to match up.
Suspension is incentive to return
Why does Blizzard and other MMO platforms go to all the trouble of disabling, not deleting? Because they know your progression is an incentive to return -- just knowing that you can pick up where you left off, rather than starting from scratch in another game.