Problems With Kickstarter Make News, Cause Site Revisions

Kickstarter logo

NPR’s All Things Considered ran a story earlier this week asking whether Kickstarter backers get refunds when a project fails. The answer, of course, is “no”. There’s no oversight on the part of Kickstarter, and the kind of person who makes lofty plans that can’t be completed often doesn’t want to admit to failure — which giving back the money would be an admission of. As NPR says,

“That’s the conflict at the heart of Kickstarter: While the company’s policy says creators have to give refunds on failed projects, the website doesn’t have a mechanism to do it.”

Kickstarter logo

Not to mention that Kickstarter keeps its fees no matter what, so failure will cost the project organizer. Since many have gone to Kickstarter because they don’t otherwise have the funds they need, that’s unlikely to happen as well.

TechCrunch followed up the NPR piece, pointing out that the Kickstarter founders took the coverage seriously enough that they responded publicly. They’ve added more questions to their FAQ to clarify this area of accountability, but the answers don’t provide any new information, simply reiterating that they don’t take responsibility for backers getting what they paid for. I find this question most odd:

Is a creator legally obligated to fulfill the promises of their project?

Yes. Kickstarter’s Terms of Use require creators to fulfill all rewards of their project or refund any backer whose reward they do not or cannot fulfill. (This is what creators see before they launch.) 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. We hope that backers will consider using this provision only in cases where they feel that a creator has not made a good faith effort to complete the project and fulfill.

What, exactly, are backers supposed to do? What good is a legal obligation if there’s no way to enforce it? Are the Kickstarter founders suggesting a class action as the ultimate enforcement mechanism? They go on to talk about how they perceive this risky environment as “a feature, not a bug”.

I don’t think this is going to be enough to quell the rising concerns, especially as more projects make millions without sufficient oversight and no products delivered. It only takes a few bad apples (getting the most attention) to ruin a tool for everyone.

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