What Happens If a Kickstarter Doesn’t Deliver?

Crowdfunding platforms like Kickstarter offer a unique way to bring creative projects to life, allowing individuals to support ideas and innovations directly. Backers contribute funds to projects they believe in, often in exchange for rewards upon the project’s completion. However, a common concern arises when a project fails to deliver on its promises, leaving backers wondering about their options. Understanding available recourse is important for anyone participating in this funding ecosystem.

Kickstarter’s Terms for Project Failure

Kickstarter operates on an “all-or-nothing” funding model, meaning funds are only collected if a project reaches its stated financial goal by the deadline. This system ensures creators have sufficient funds to complete their promised work and minimizes risk for backers, as pledges are not charged if the project remains unfunded.

Kickstarter functions as a platform connecting creators and backers, not as a retail store. Pledging to a project supports an idea’s development, not a guaranteed product purchase. Kickstarter explicitly states it does not oversee project performance, mediate disputes between users, or offer refunds. The agreement is a direct contract between the creator and the backer, with Kickstarter not being a party to that contract.

Steps for Backers

If a Kickstarter project you backed fails to deliver, the initial step involves direct communication with the project creator. Utilizing Kickstarter’s messaging system or commenting on the project’s update page allows for inquiry about delays or issues. Monitoring project updates and comments is advisable, as creators are expected to provide transparent information.

Should communication with the creator prove ineffective or if the project appears abandoned, backers can report the project to Kickstarter’s Trust & Safety team. This involves navigating to the project page and selecting the “Report this project to Kickstarter” option. While Kickstarter does not mediate disputes or force refunds, their team investigates reports, contacts creators, and may restrict future project launches if creators do not meet their obligations.

Backers might also consider directly requesting a refund from the creator. As a last resort for financial recovery, initiating a chargeback through your credit card company or payment processor, such as Stripe, is an option. Chargebacks are a consumer protection mechanism allowing disputes for non-receipt of goods or services, typically with time limits ranging from 60 to 120 days from the transaction date, though this can vary by issuer.

Creator Responsibilities

Upon successful funding, creators assume a clear obligation to complete the project and fulfill promised rewards. This responsibility includes maintaining transparency and consistent communication with backers, particularly when facing unforeseen challenges or delays. Creators are expected to provide regular updates, explaining any setbacks and how funds are being utilized.

If a creator cannot deliver, they are expected to make reasonable efforts to conclude the project. This may involve offering refunds to backers if funds permit or providing alternative solutions, such as equivalent products. Creators must demonstrate appropriate fund use and good faith efforts to complete the project. While Kickstarter does not guarantee fulfillment, creators are legally liable to backers for failure to deliver.

Pursuing Further Action

When direct communication and platform reporting have not yielded a resolution, backers may explore external avenues. One option is to contact consumer protection agencies, such as the Federal Trade Commission (FTC), to report fraudulent behavior. These agencies can investigate patterns of deceptive practices and take enforcement actions against creators, though they typically do not recover individual funds directly. State Attorneys General also pursue actions under consumer protection statutes for unfair or deceptive trade practices.

For recovering funds, small claims court presents a potential path for individual backers. This court system is designed for resolving monetary disputes below a certain threshold, which varies by jurisdiction, typically ranging from a few thousand to tens of thousands of dollars. Pursuing a claim in small claims court generally requires knowing the creator’s identity and location to ensure proper jurisdiction.

In complex cases or when substantial sums are involved, consulting with an attorney may be appropriate. Legal professionals can assess the specifics of a situation, advise on potential claims such as breach of contract or fraud, and guide individuals through the legal process. It is important to act promptly, as statutes of limitations can restrict the time frame within which legal action can be pursued.