So, where does this leave refunds?

A lot depends on the type of project.

1) A musician records an album – offers digital downloads to backers. Their “manufacturing” costs and time is zero. All of the costs are up-front (renting instruments, paying backing musicians, renting a studio, etc). There is little reason why their delivery date shouldn’t be accurate. But if one of the band members leaves – then they hit a bump in the road – and now the album is late. They’ve spent all the money already – so they can’t refund anything. However, they probably get the album done – and everyone does eventually get their rewards – so this isn’t all *that* serious.

2) An existing company goes to a factory in china to build a gadget that they already have prototyped and working. If the product is late, then refunds should be easy…and it’s unlikely to be VERY late anyway. This kind of business doesn’t really *NEED* Kickstarter.

3) A small business intends to manufacture the product themselves using existing equipment and cheap materials. If they are late, then refunds should be possible. But this kind of company doesn’t really *NEED* Kickstarter either.

4) A small business has to pay for molds to be made for injection molding – or has to buy a $10,000 3D router or a lathe or order *all* of the materials for manufacturing up-front. Most of the money is already spent – what’s left is reserved for postage, packaging and materials. It’s possible to give refunds – but when you do, you deplete the money needed to pay for shipping and materials to backers who DON’T want a refund. This can result in a horrendous snowball where a few people panic and demand refunds – and the result is that nobody gets their stuff, everybody gets horrendously upset, etc.

5) The project creator never intended to make anything – the funds “vanish”, maybe there is legal recourse, but it’s not going to be an easy path.

Case #5 is clearly a very bad scenario. But so is case #4. A small ‘bump in the road’ (which about 70% of all projects who eventually deliver everything with mostly happy customers have) can easily escalate into a major disaster where almost ALL of the backers get nothing and the relatively innocent project owner is in horrible trouble. A tiny problem was escalated by a lack of patience.

So how can you make sure that the cases where refunding money is reasonable are separated out from those for which it’s not reasonable or not possible at all?

Clearly, in most cases where refunds are possible – because there was little or no up-front costs to fulfilling the project – you don’t need Kickstarter. These kinds of project should be actively discouraged by Kickstarter. They should ask people “Why do you need all this money up-front?”

If you did THAT, then refunds could be pro-rated according to what the project can demonstrate that it already needed to spend.

So if I spent $8,000 of my $10,000 project income on machinery – then nobody gets more than a 20% refund. The project could presumably show receipts for those purchases to demonstrate that they can’t refund more than that.

This would sort out the scammers (who didn’t buy anything yet – and so COULD refund money) and existing businesses who really shouldn’t be using Kickstarter anyway.

Sure, the backers will be disappointed that they can’t get their money back – but at least they know why.

What’s needed is more openness.

In my projects, I describe exactly what equipment we bought an how we’re bringing it online. I even go so far as to publish videos of the machine working, making rewards.

Openness is key here.

— Steve

Oh … by-the-way … in reference to the concept of refunds if a project fails (which, I do not focus on, because it is nonsense … funds are spent and not recoverable, unless the project is a farce, of course, being run by an otherwise profitable company or a company receiving VC or other major sources of funding simultaneously…)…

It is Kickstarter’s OWN Terms of Service that, once again, creates this misleading impression that they are a STORE. If, as you wisely state, funding should be considered a risky gambling investment, rather than a purchase, then the concept of a “refund” would not exist and should NEVER be mentioned ANYWHERE by Kickstarter. This would eliminate the ambiguity of “how late is *very* late?”.

[Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer’s request for a refund unless the Project Creator is unable or unwilling to fulfill the reward.
Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.]

Again: The fault here is Kickstarter/IGG, though nothing stops a project creator from doing their absolute best effort to dispel this incongruity and say up front: NO REFUNDS WILL BE POSSIBLE OR EVER ISSUED IN ANY CIRCUMSTANCES AT ANY TIME, REGARDLESS OF ANY TERMS OF SERVICE OR IMPLICATIONS MADE BY ANYONE.

To be clear:

1. I did not call you an idiot; I called you ignorant. And I don’t mean the latter as specific insult — I mean that you are ignoring some basic REALITIES of the Kickstarter / Indiegogo world.

To the contrary, I very much respect that you have engaged discussion here, and I respect your VISION of what Kickstarter SHOULD BE and that your own personal projects have been closer to that vision.

2. It was @Kickscammed, not I, that said refunds should be issued as Estimated dates are past. I am absolutely aware that that is pretty much nonsense in 99% of the scenarios; the funds from a project get spent rather quickly and are not recoverable in the short term. In the case of intentional (not just negligent) fraud, the funds are also long gone — but credit card companies provide fraud protection.

In the case of #2, however, this is all the more reason that Projects and Kickstarter need to make 500% more effort to not being a “store” in any sense of the word, and NEVER allowing a delivery date to be published unless the reward is already produced (like a thank-you, bumper-sticker, or t-shirt).

As for #1: The REALITY is that a significant number of backers are, rightly or wrongly, of the PERCEPTION that Kickstater/IGG are STORES. And I think that MOST projects which offer product as Rewards do VERY LITTLE do dispel this notion. As I’ve capitalized more times than sane, this is possible to rectify: Projects are vetted by Kickstarter, therefore, a human being at Kickstarter can ensure that no implied “sale” is made … and, to me, the only way to do this 100% is to not allow product as rewards, or, at the very least, to never allow the publication of a delivery date.

Credit card issuers have been siding with purchasers on Kickstarter frequently (I don’t know the statistics — It would BEHOOVE Kickstarter to publish this!). Credit card companies accept that estimated delivery dates as well as extension dates published in updates are all evidence of promised delivery of purchased product. Is this accurate? Doesn’t matter … it is REALITY that you are IGNORING.

I frankly love the concept of Kickstarter/IGG. But their execution has a major major major flaw which they fail to address. Most product development – production projects are just using the platform for pre-sales, and it is an unaddressed challenge to thoroughly dispel this notion. This is why the concept of “Qualified Accredited Investors” exists in the world of risk-funding (VC’s, Angels), since the SEC realized a minimum net-worth and trading experience is a safety point to protect naive funders. Kickstarter/IGG needs safety provisions, but doesn’t give a damn because they earn their 5% commission regardless of the eventual disposition of the project, and Kickstarter/IGG doesn’t want to do anything that will kill their golden laying goose. It is GREEDY and EVIL for them to permit this deception to continue, even if it is a relatively small portion of projects that fail beyond just “reasonable” delays.

Your ignorance of the “store” perception is illustrated in your post:

QUOTE: [We make that very clear to all of our backers…when one of them says “Oh no! I missed your kickstarter!” – we tell them not to worry because once we’ve delivered all the rewards, the exact same items at the exact same prices are going to be in our store…and they are.]

That example, EQUATES your eventual “store” (and it’s “same PRICES”) with the REWARDS offered on Kickstarter. Is this a black-and-white unambiguous equivalency… no… of course not. Is this misleading to naive (read: MAJORITY) of Kickstarter/IGG pre-purchasers? Absolutely.

My goal is not to kill innovation or jobs, nor disrespect the effort and success you’ve had. My goal is to make Kickstarter own-up to their responsibility for the misconceptions that drive people to the level of extreme anger and refund requests. When credit card chargebacks are processed, they are charged against Kickstarter’s revenue (not the project creators). If these were done in high frequency, then Kickstarter would, perhaps, get the message. Or they would just eat them as a relatively small cost of doing business, against their $ millions and millions of easy profits.

Peace, and Goodbye to you as well.

(er…”we’ve spent $10,200″ – should be: $9,200).

Oh – yeah – and offering to refund everyone’s money at every tiny setback.

That’s so naive I don’t know where to begin!

Suppose my $12,000 project had earned $13,000 instead of $40,000.

The budget went:

$7,000 to buy a piece of machinery without which not one reward can be made.
$1,000 to buy raw materials (which are this cheap only because we buy in huge bulk)
$2,000 postage and packing costs.
$1,200 kickstarter & amazon fees.
$800 contingency (hopefully, profit).

So, suppose we buy our machine and the raw materials and we start making stuff. Then we hit a snag of some kind…if we go online and tell people “Oh, we’re going to be a month late, you can all have your money back” – then we’re in trouble…we’ve spent $10,200 in machinery, materials and fees. We can’t refund more than $2,800.

Worse still, if 20% of backers actually take the refund, we’re broke. But we still have to find $1600 of postage and packing fees.

It simply can’t be done.

If you have the ability to refund all (or even most) of the money at any time, then you either can’t start a project that requires any up-front investment at all – or you have to take out a bank loan to pay for it all.

That completely defeats the object of having Kickstarter at all! The whole concept fails if you can’t spend any money without shipping rewards.

So, no – you have no clue about this stuff….none whatever.

Goodbye.

Please, don’t tell me how to run my business – and don’t call me an idiot. My wife and I have built a thriving business – we’re getting close to a quarter million dollars a year in revenue with zero debt and zero unhappy customers. That is not what happens to idiots.

You’re talking to someone who not only knows Kickstarter – but has used it in precisely the way it’s intended to be used. I’ve seen the pitfalls first hand….I’ve backed projects that worked, projects that failed, prevented at least one scam, and come close to being suckered in to a third.

With respect, it is you that does not understand. Sure, if I had just one $5 reward and one $2000 one – then you *might* be right (actually, I don’t think so). But to be exact, our rewards (which were not multiples of the same thing – actual *different* rewards) were priced at:

$1 (the “nothing but our thanks level), $4, $4 (a different thing than the first $4), $5, $10, $10 (again, different), $10 (again!), $15, $15, $15, $20, $20, $25, $35, $40, $45, $50, $75, $100, $115, $200, $245, $250, $400, $470, $500. The $1000 and $2000 levels included stuff like visits to our business, us designing custom stuff, etc.

Your naive math fails quite utterly in the face of many reward levels in the $10 to $200 range – and this is very, very common in the kind of business we’re in. Almost all creators in similar businesses do this exact thing.

The point here is that you completely fail to understand the motivations of backers and project creators.

The idea that our customers are seeking bargain basement prices doesn’t hold water. Once our rewards are fulfilled, we sell the same items in our online store at the exact same prices. We make that very clear to all of our backers…when one of them says “Oh no! I missed your kickstarter!” – we tell them not to worry because once we’ve delivered all the rewards, the exact same items at the exact same prices are going to be in our store…and they are.

People support our kickstarter (and suffer having their money locked away for months before they get our product) because they want to build our project.

Early on, just after that first Kickstarter completed, we actually met one of our backers face-to-face. What he told us was telling. He said that he backs kickstarters because he enjoys being a part of something. He said that every update where we gave progress – both successes and failures, gave him a little ‘kick’ of pleasure at being one who helped my wife and I become something better than we were.

I thought at the time that this guy was a bit “out there” – but we’ve met many other backers since – and we get much the same story. Now that I’ve backed a couple of dozen projects – I’m starting to feel what he said. I frequently back projects and accept no reward – or back for $1 just to join in the conversation.

You’re missing the point.

It’s really, REALLY not a store.

Your ignorance is infuriating. I apparently know much more about being a project creator than you do.

The example you gave of the reward limits is exactly BACKWARDS of reality.

If you knew you could produced a certain quantity of widgets with $12,000 then you must first consider the worst case scenario of all purchases being at the lowest reward level and set that level cost to meet your production cost (e.g., $60 per widget = 200 total widgets available TOTAL across all rewards levels).

Then if you CHOOSE to designate higher reward limits such as signed limited editions, you must subtract these special units from the available units at the lower reward level.

So that would be:

1. Limited edition widgets at a $200 contribution level. Maximum 50.
2. Bargain edition widgets at $60 contribution level. Maximum 149.
3. A super backer level $1000: Rewards is signed widget and personal phone call. Maximum: 1.

Your funding GOAL, however, must assume that you only receive “bargain level” contributions, since you can’t predict the number of premium contributors.

Goal = 149 x $60 = $8940.

So how do you get to the real $12,000 you need? You’d better hope you get some premium contributions — if you don’t, then the REAL non-consumer interest in your project is likely non-existent: In other words, your backers are NOT backers, they are BARGAIN HUNTING SHOPPERS. This is the case for nearly all gadget projects. They are offered rewards at the “discount from the retail price”; when there is not F-ing “retail price”. Pricing is a complicated business and marketing decision that has nothing to do with the process of getting a product created. Calling something a “discount from price” is, once again, making this a SALE, not a donation.

You now are guaranteed not to exceed your capacity of 200 widgets and are running a fair, honest, and non-negligent CAMPAIGN. What happens after the campaign in terms of communication and offering additional items via other sales channels is distinct.

Your BS about thinking that the Kickstarter system should dynamically change “Estimated Delivery Dates” as the funding increases would just serve to further confuse backers. Early backers see the optimistic delivery dates that change up and down from day to day as contributions rise? I already explained how to avoid that BS: Kickstarter must not allow ANY IMPLIED DELIVERY DATES EVER, WHATSOEVER, in ANY FORM. Problem SOLVED.

Finally, and, frankly, this should have been my first point. you wrote:

QUOTE: [They loved what we were doing, they didn’t *like* us being late – but the universal view was that we were doing OK by them and not one person even suggested that they might want a refund.]

If this is TRULY the case; i.e., that “NOT ONE PERSON WANTED A REFUND”, then congratulations for you. This entire thread is MOOT and IRRELEVANT for you.

The entire point of this thread is summarized as:

If a project creator has any idea that their project has risks that are not disclosed during the campaign, particularly if it is obvious to them that the estimated dates are no longer valid due to funding exceeding the goal amount, then every backer should be updated with all this new information in absolutely the most pessimistic terms possible, and given the option, then and there, to request and receive a FULL REFUND. If nobody requests a refund, you are free of negligence and responsibility beyond this new pessimistic update. If many backers request refunds and you must cancel, then that is the fair, honest, and mandated good-faith requirement.

TL;DR; — If you offer products at a discount as rewards then you are using Kickstarter as a SHOP. If you believe you are not able to fulfill these orders within the dates specified due to change in scope or due to the fact that you shouldn’t EVER specify a date that you’re not willing to stake your business and reputation and life-savings on, then you must OFFER refunds. If refunds are not taken, THEN and ONLY THEN, the money is yours to “grow the economy” or blow on coke and whores … it no longer matters.

Hmmm – well there are some things you quite clearly don’t understand about being a project creator and a new business startup.

(First, let me apologize for my use of the word “win” in conjunction with the total pledge amount we were awarded…this is a commonly used term in Kickstarter circles – and whilst I agree that it gives a bad impression of what the money is for – I can assure you that serious project creators and backers alike are fully aware of what it means in this context. Like any online community, it develops it’s own vocabulary and use of common english words may not mean what you first think. This is a good example of that – I should have chosen a better word.)

Let me talk about my situation for a while. You say that I could and should have placed limits on the number of rewards offered. That’s true. If you’re only offering (say) copied of the CD of the music you’re making – then you set a limit and that’s fine. But our Kickstarter had 30 different rewards at levels from $5 to $2000. I could not have devised a limit that would have capped us out at (say) $24,000. A limit of 12 on the $2000 rewards and 24 on the $1000 wouldn’t prevent us going twice over our goal…but putting low enough limits on all 30 rewards to absolutely guarantee not going over would pretty much guarantee that we wouldn’t have surpassed our goal. So that’s a non-starter.

You’re right that we could have ended the campaign when the number started getting large – but our backers didn’t want that. In fact, even though we were many months late – we had not one single complaint about that (because we communicated well) – and when we finished shipping rewards, we started a second Kickstarter which exceeded the $40,000 that the first project made in under a week and topped out at over $60,000. The second Kickstarter, allowed us to buy more equipment and make product faster. We’re still a little behind on the second one – but, again, nobody is fussing because we deal fairly with our backers, we talk to them all the time, we tell them every single little problem and bump in the road, we share successes and failures. They help us to design future product so that it fits their needs better than it would if we hadn’t talked to them. We win, they win. It’s like a big, happy family.

Number three Kickstarter starts next week. We expect to make $100,000 this time…now we’ll take on one or two employees – and our backers will be actively helping the economy by creating new jobs. Our business is thriving with online sales – and we don’t have $1 of debt. Kickstarter worked – perfectly – it did exactly what it set out to do – and even though our estimate was off by a couple of months, nothing terrible happened. Our backers love us – and they’ll back use again for our next growth spurt.

So how would ending that first campaign early have helped? Nobody would have been happy because we did that. Fewer people would have the stuff they wanted – fewer people would have jobs – the world would not be a better place.

Sure, being a bit late was an inconvenience (we actually gave all of the backers who we shipped late a free gift – and when we were VERY late, a $25 voucher for more of our product) – but we kept talking to them, explaining where we were at (we had over 60 updates and posted 400 messages to the project before we were done). They loved what we were doing, they didn’t *like* us being late – but the universal view was that we were doing OK by them and not one person even suggested that they might want a refund. Several backers actually volunteered to be the last to be delivered to so that other people could get their rewards a little early. It was a truly wonderful thing to see. Human beings helping each other out to get something that everyone wanted. (We wanted a business as a new livelyhood, they wanted a business to provide the kind of product they wanted.)

This is not a game. My wifes (and now my) livelyhood depends on our new business. It took us 4 months to set up our kickstarter – and to tell us to turn away money by curtailing the project because it’s too successful is simply not a practical proposition!

The Kickstarter was to start a new business…we were not there to sell product – we were there to get financing to buy machinery. The “rewards” were not things we sold – they were thanks for people who trusted us enough to start us in business – who liked our product enough to want us to make more things like it.

So – as I first said – there isn’t a firm, fixed timescale for delivery. There just isn’t. It doesn’t say that ANYWHERE in the Kickstarter rules – and they don’t allow you to put firm delivery dates in your reward listings. The word “ESTIMATED” is hard-wired into their software…and there is a very good reason for that.

The problem (at least for my business) is that Kickstarter’s design is not oriented towards manufacturing businesses. The “estimated delivery” thing is a horrible way to express things. What I’d like to see is the ability for me to plug in a formula:

Estimated Delivery date = Project-end-date + 2 months + 1 month for every $10,000 raised.

…or something like that. That’s a trivially simple thing for them to do (trust me, I’m a web designer) – and it would resolve a hell of a lot of problems with backer expectations. The site could then update the “Estimated delivery” field on-the-fly as each backer pledges….each one would get his/her own estimate of when their reward will ship – and if the times get too long for late-comers, then they may well choose not to back the project.

In our case, the second Kickstarter brought us the opportunity to buy more equipment to speed up production – so we wrote new delivery dates into the project “blurb” saying that if we made up to $XXX, the rewards would ship by some date – but if we made $YYY, it would take longer – but if we could reach $ZZZ, we’d buy more equipment and the delivery dates would get shorter again.

It’s not a simple thing.

Kickstarter isn’t a shop. It’s a way to fund new businesses and get thanks for doing it – it’s about building customer loyalty – growing the economy.

Sure, 6 years is certainly too long. But 60 days is clearly too short.

My point is that duration of delay isn’t the issue. It’s degree of communication from the project owner. If they are providing updates every week or two, being completely open and convincing about the reasons for any delay and what they’re doing about it – then the degree of tolerance for lateness should be large. If they take the money, and you never hear from them again – then even waiting until the “Estimated delivery” date may be too long…after all, if they intended to scam you, wouldn’t they put a nice long delay in there to give themselves plenty of time to get away and cover their tracks?

There are projects like the one where the guy had to get mold made to make the parts and the Chinese mold makers stole his design and started selling them in competition to him! Without money to make more molds (they are expensive), he soldiered on, making shipments to his backers using a 3D printer as he could save the money to do so. He had a nervous breakdown and friends of his rallied round to continue to ship the rewards at an agonizingly slow rate. Backers should not punish this poor fellow any further. They took the risk that’s associated with any Kickstarter – and they lost their money (or perhaps they’ll eventually get their rewards in a year or two).

Then there are projects (like “iFind” that Kickstarter recently curtailed or the CO2ube project that I fought hard to prevent reaching it’s goal) that should never be allowed to finish – let alone take money! They are clear and obvious scams. Backers should discuss the project’s viability and the character of the project owner and his/her past history in the run-up to the last end of the project – and if it seems flakey – pull their money out before it ends. Far too few people say “Give the guy a chance, he’s innovating something amazing here!” – in the face of clear evidence that what’s being promised violates the laws of physics!

The tough part is not finding the projects at those two extremes – it’s spotting projects like “Tectonic Craft Studios New Line of War Games Terrain” – which started shipping product, then kinda tailed off, then started selling the exact rewards that people should have been getting at shows and other events – then eventually in his online store. That guy certainly has the capability to ship rewards – but despite being TWO years late is simply not bothering to do so. His updates to backers are rare, evasive, suspicious. Certainly, his backers should be getting their money back – and possibly getting the law involved.

But it’s a tricky and nuanced matter. Backers are absolutely *NOT* pre-ordering something in an online store. They are providing an injection of cash to start a project that may or may not succeed. If the project genuinely doesn’t succeed for very good (and unforseeable) reasons, then they lose their money – and the project creator wastes his/her efforts in failing – and that’s exactly how Kickstarter is supposed to work. If you just want to buy stuff – use Etsy or Tindie or some other kind of online business site.

The base problem here is simply what is VERY LATE? There is no definition of this on KS. A project like mPrinter could deliver 6 years from now and still be within the confines of the terms from KS. I can’t and shouldn’t wait 6 years past the delivery date for something. They need to implement a cut off date where refunds are required and backers may choose to take them or wait it out.

The issue stems from the fact that they basically require the creator to admit defeat to comply with the refunds requirement. If they aren’t updating the page, or have completely stopped communication, this can’t happen. So according to KS’s terms…they are still planning on sending rewards…even if they obviously aren’t.

The forum software here mangled my response, perhaps because of quotes or other symbols. I am attempting to repost the entire response here with risky symbols removed:

I appreciate and understand the sentiment of your comment; but you have done a wonderful job of demonstrating how poorly Kickstarter is understood by Project CREATORS, who have a great deal more responsibility to be forthright with their backers. I blame this failure of understanding on Kickstarter who should be spending MUCH more effort in vetting projects before posting them, AND before granting them the funding reached, especially if the goal is exceeded by any significant amount.

Here’s exactly where you are mistaken:

Quote: [In my case, our project had a goal of $12,000 – which we needed to buy a piece of capital equipment. We estimated it would take us 2 months to manufacture $12,000 worth of rewards – and we set the estimate to 4 months. As it happened, we won over $40,000 worth. . This completely blindsided us.]

1. You did not “win” over $40,000. Kickstarter is not a raffle.

2. You had 100% control over preventing the “blindsiding” that you encountered: When defining the reward levels, you are FULLY and UNAMBIGUOUSLY able to set LIMITS on the type and quantity of every single reward. You don’t even need to offer the “product” as a reward; you can just offer “thanks”, or t-shirts, or bumper stickers. But more realistically: You could have EASILY set the number of products offered as Rewards to at or below the $12,000 goal. At that point, no backers could have selected a reward level that offered product that was outside your initial scope and abilities.

3. Even if you had set the reward levels incorrectly, you have, again, 100% control and ability to CANCEL the project before receiving the funds. In other words, when your $12,000 goal reached the “blindsiding” amount of $40,000+, you COULD and SHOULD have cancelled the project. You can’t say in good faith or without complete ignorance that you thought you would just use the extra money, because, in your OWN WORDS, you said you were “blindsided”.

If I’m driving on a road and I change lanes and am hit by a vehicle that “blindsided” me, I don’t keep driving! It is expected that I stop and determine the damage that I, myself, caused by not checking my blind spots. That was YOUR responsibility in the case of your project — delivery on the initial $12,000 scope of the project, or cancel and repost it with more accurate estimated delivery dates.

4. What is “very far past the estimated dates”? Again, in the example of your project (and dozens or hundreds like it), that is IRRELEVANT.

Kickstarters terms clearly state: [Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.]

Again, IN YOUR OWN WORDS, you KNEW that you were unprepared (therefore, UNABLE) to deliver $40,000 worth of product in the documented timeframes. You set your goal PURPOSEFULLY at $12,000 and based your delivery dates on the ability to fulfill that amount of rewards based on your researched and described costs of the production. By accepting a single dollar of that amount, you are no longer acting “in good faith”. The project is now a FRAUD and should be cancelled and/or refunds offered upon demand to all backers who are updated with your story of being “blindsided”.

5. There is no longer ANY excuse for optimistic “estimated delivery dates” to be listed for rewards. The delivery timeframe should automatically be tripled or quadrupled by Kickstarter vetting before the project is posted.

Why? Because Kickstarter has now had TENS of THOUSANDS of projects and has the statistics available as to the delivery time frame requirements for items of various complexities. This data is also available to project creators as they are preparing the scope and defining the rewards for each level and setting the estimated delivery dates. It is NEGLIGENT and FRAUDULENT to specify dates without taking into account your own inexperience with the risks involved in production, and executing due diligence to self-educate in order to provide worst-case dates instead of optimistic dates.

Companies that had to have their business plans approved by the SEC before being offered to investors would be laughed out of the market with the lack of disclosures that Kickstarter allows. Kickstarter is taking millions upon millions of dollars of backer money in the form of their 5% fee. Kickstarter has an fiduciary duty to not mislead their customers (yes… since the earnings of Kickstarter come out of the funds pledged by backers, that makes the backers the CUSTOMERS of Kickstarter). Therefore, Kickstarter is guilty of deceptive business practices and should be reported to the consumer protection bureaus in each jurisdiction.

That is a slow process — the government is busy. Thankfully there is an alternative: Credit card fraud protection. Every good credit card these days offers 100% protection against fraudulent activity. And every and any customer of Kickstarter that has been negligently deceived are fully within their rights to utilize this card benefit by reporting the fraud and requesting a chargeback.

The BEST way for Kickstarter to not appear to be “a store” is if the rewards offered are restricted to intangible items of negligible value only. The ONLY sufficient alternative is for all projects to be PROHIBITED from publishing ANY delivery dates — estimated or promised, and, in fact, each reward of value must be preceded by a capitalized phrase “IF WE WIN THE LOTTERY AND MANAGE TO LUCK OUT AND ACTUALLY BUILD SOMETHING VAGUELY LIKE WE DESCRIBE HERE, THEN YOU JUST MIGHT HAVE A TINY CHANCE OF GETTING “X” AS A REWARD, SOMEDAY IN THE INDETERMINABLE FUTURE. WE URGE YOU TO NOT CONTRIBUTE TO THIS PROJECT IF YOU ACTUALLY DESIRE OR EXPECT THE REWARD DESCRIBED BELOW, AS THE ODDS OF DELIVERY ARE OUTSIDE OF OUR CONTROL.”

Would this type of extreme wording kill crowdfunding? Well, if, as many backers insist that they were and are fully aware of the risks and expect estimated delivery dates to slip and product designs to change, and QUOTE: [But when you back a project, you’re gambling on the creators being what they claim. It’s just like investing in the stock market.], then, the clear wording I describe would not deter such backers (such “investors” as you call them).

In other words, this wording would DO NO HARM. It would eliminate nearly all the small print and misleading promises in all projects. If backers were forced to acknowledge this wording, then, by all means, they would no longer be entitled to fraud protection, as there would be no longer be any negligent fraud taking place.

I fully support the IDEA of Kickstarter (and Indiegogo), job creation, innovation fostering, etc., etc.. If this idealistic world is as you view it, then you should have NO objection to the disclaimer language being in a font five times as big as the reward description, and no estimated delivery dates or other bullshit allowed.

Seems damn simple to me.

I appreciate and understand the sentiment of your comment; but you have done a wonderful job of demonstrating how poorly Kickstarter is understood by Project CREATORS, who have a great deal more responsibility to be forthright with their backers. I blame this failure of understanding on Kickstarter who should be spending MUCH more effort in vetting projects before posting them, AND before granting them the funding reached, especially if the goal is exceeded by any significant amount.

Here’s exactly where you are mistaken:

Quote: >>In my case, our project had a goal of $12,000 – which we needed to buy a piece of capital equipment. We estimated it would take us 2 months to manufacture $12,000 worth of rewards – and we set the estimate to 4 months. As it happened, we won over $40,000 worth. . This completely blindsided us.<>Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.<>But when you back a project, you’re gambling on the creators being what they claim. It’s just like investing in the stock market.<<; then, the clear wording I describe would not deter such backers (such "investors" as you call them).

In other words, this wording would DO NO HARM. It would eliminate nearly all the small print and misleading promises in all projects. If backers were forced to acknowledge this wording, then, by all means, they would no longer be entitled to fraud protection, as there would be no longer be any negligent fraud taking place.

I fully support the IDEA of Kickstarter (and Indiegogo), job creation, innovation fostering, etc., etc.. If this idealistic world is as you view it, then you should have NO objection to the disclaimer language being in a font five times as big as the reward description, and no estimated delivery dates or other bullshit allowed.

Seems damn simple to me.

I could not disagree more!

There is a very real problem with this. The date given is clearly labelled “ESTIMATED” – it’s not intended to be a hard-and-fast date – and indeed, it’s very often missed.

By the very nature of what Kickstarter does (starting new businesses, launching innovative new works) – the project owners cannot always know in advance how long it’ll take to make the rewards.

By it’s very nature, the project owners are very often doing this stuff for the very first time – there are just about guaranteed to be unexpected delays and problems that put projects beyond their worst-case estimates. If you don’t have tolerance for that then for god’s sake – don’t back projects on Kickstarter!

In my case, our project had a goal of $12,000 – which we needed to buy a piece of capital equipment. We estimated it would take us 2 months to manufacture $12,000 worth of rewards – and we set the estimate to 4 months. As it happened, we won over $40,000 worth. This completely blindsided us. Worse still, we had problems with our equipment – so it took more like 7 months to deliver the last rewards. It would have been unreasonable to give people their money back on that basis.

But consider projects that only *just* make their goals – they may need 100% of that money in order to deliver even one reward (up-front manufacturing costs perhaps). If they somewhat under-estimated their delivery dates – they spend the majority of their pledged money to buy that capital equipment (or pay for initial tooling charges or whatever) – then if more than a few people have their pledges refunded – then the fledgling company is in DEEP SHIT. Suddenly, they find that they have a lot less money than they thought. This money may well have been ear-marked for raw materials, postage, packaging, etc. So if just a small minority of people get their money refunded – that can be enough to cause EVERYONE to fail to get their rewards.

So if we do what you suggest – then a relatively small project slippage, with a few unreasonable backers (who may think, like you do, that Kickstarter is a store that sells stuff) can cause the downfall of an entirely well-run, honest, project. Kill the dreams of the creator – cause enough chaos that the entire Kickstarter system fails.

No doubt there are scammers out there. But the gold standard for demanding a refund should be that the rewards are VERY far past the estimated dates *COUPLED WITH* a project owner who is not responding to queries, not posting frequent updates, not explaining where the delays are.

Kickstarter is absolutely *NOT* a store front. It’s a way to start new businesses….to create jobs…to put the buyers of a product or service DIRECTLY in contact with the person who is making/providing that. It’s a way to break the log-jam of not being able to start a new company because you can’t sell your stuff in WalMart. It creates jobs, it gives backers innovative new stuff ahead of time.

But when you back a project, you’re gambling on the creators being what they claim. It’s just like investing in the stock market.

— Steve

This is definitely good and important information. I’ve had success with up to 60 days (and heard of longer too).

When you file a credit card dispute, always refer to the last (latest) estimated delivery date as per the Project’s update(s). It is up to you to decide if they date is too fuzzy to be considered a delivery date update.

This will help lengthen the clock on the 45, 60, or even 90 days that some credit cards will offer as a chargeback window.

Also, firmly and consistently refer to your payment as a PURCHASE of a PRODUCT, and the company name on your credit card statement as the MERCHANT.

When well described promised PRODUCTS are being offered as Rewards, then Kickstarter is clearly and undeniably acting as a STORE. A quack = a duck.

The only way for Kickstarter to not be a pre-production early-sales store, is if they completely DISALLOW any products to be offered as rewards.