Should Failed Kickstarter Projects Issue Refunds? - PC Magazine

Kickstarter on Tuesday addressed questions about whether or not contributors to failed projects are entitled to a refund. The answer? Maybe.

Kickstarter was responding to a segment from NPR's All Things Considered that asked: "When a Kickstarter campaign fails, does anyone get their money back?"

In a blog post, Kickstarter said it does not issue refunds, and in fact never handles money; all transactions are completed between the backers and the project creator. Once a project is successfully funded, money is transferred directly from the supporter's credit card to the project boss's Amazon Payments account.

The creator can issue a rebate if he or she is inclined, but after 60 days of the funding pledge, Amazon Payments cannot reverse the same charge. In order to give any money back, a new transaction needs to be made to send money online, via a check, or another method.

It can be done – Kickstarter has guided people through the refund process before.

According to the website's Terms of Use, creators are required to fulfill the promises of their project, or refund any backer whose reward they did not or cannot fulfill.

"We crafted these terms to create a legal requirement for creators to follow through on their projects, and to give backers a recourse if they don't," Kickstarter's blog said.

Still, the website is keeping its fingers crossed that supporters will use that provision only in cases where a creator has not made a good faith effort to complete the project.

User Eric commented on the Kickstarter post, saying that while he has only funded a couple of projects that all came to fruition, "I never looked at it as anything more than a Donation in that sense, no matter what, if I pledged $15 I was okay, as a funder, to never see that $15 again or any product as a result."

By means of its explanation, Kickstarter plays the laissez-faire card, saying the website has no responsibility in creating or compensating a project.

When the going gets tough, Kickstarter backs off.

"If [the creator's] problems are severe enough that the creator can't fulfill their project, creators need to find a resolution," the blog said. "Steps could include offering refunds, detailing exactly how funds were used, and other actions to satisfy backers."

When Kickstarter launched in the U.S. in 2009, it was meant as a way for inventors and audiences to work together to make things, the team said. The site doesn't hitch any guarantees to projects, for fear of defeating Kickstarter's aim of being a nontraditional marketplace.

"Kickstarter is not another way to window shop on the internet for cool new stuff," Bryan Rankin said in a posted comment. "You're not just investing in a product, you're investing in the creator and sometimes investments fail. When that happens, generally, if the project creator gave a good faith effort to bring the product to market, the money has been spent. As with all investments, there is a risk involved."

Enough investments have worked out for Kickstarter, which announced in July that it will launch in the U.K. later this year. British Isles residents can already set up a Kickstarter fundraising project, but must have a U.S. bank account. Soon, citizens across the pond will be able to link directly to their own U.K. account to complete funding.

Kickstarter has added the new list of questions and answers to its FAQ page, where visitors can learn more about how the site works, starting a project, accountability, and other odds and ends.

PCMag's Sascha Segan recently questioned whether Kickstarter projects like the Android-based Ouya console had any hope of actually becoming a reality, despite raising millions. Ouya addressed those concerns in a recent interview with PCMag. For more, see Does Ouya Mark a Kickstarter Tech Bubble? Also check out the slideshow below of Cool Kickstarter Projects.

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