Click to Skip Ad
Closing in...

PayPal will no longer protect you from Kickstarter campaigns that fall apart

Published May 9th, 2016 8:20PM EDT
PayPal Crowdfunding Purchase Protection

You might want to think twice before you find another crowdfunding project with your PayPal account. Starting on June 25th, PayPal is updating its User Agreement to remove Purchase Protection on crowdfunding projects, which means dissatisfied Kickstarter and Indiegogo contributors will no longer be able to dispute charges.

READ MORE: 5 passengers survive after Tesla Model S flies 82 feet through the air in an insane crash

Although not all crowdfunding projects are funded with PayPal, this could still be a huge blow to future campaigns. Many contributors depended on PayPal’s Purchase Protection to ensure that regardless of the outcome of the project, they would still be able to receive a full refund.

Now, if the creators can’t deliver what they promised, the customers will be left hoping that they can get some kind of refund directly from those creators (who likely spent a majority of the money trying to complete the project).

Here’s PayPal’s full statement regarding the change, via Engadget:

“In Australia, Brazil, Canada, Japan, United States and certain other countries, we have excluded payments made to crowdfunding campaigns from our buyer protection programs. This is consistent with the risks and uncertainties involved in contributing to crowdfunding campaigns, which do not guarantee a return for the investment made in these types of campaigns. We work with our crowdfunding platform partners to encourage fundraisers to communicate the risks involved in investing in their campaign to donors.”

Additionally, “anything purchased from or an amount paid to a government agency” and “gambling, gaming and/or any other activity with an entry fee and a prize” are no longer eligible for Purchase Protection either.

Jacob Siegal
Jacob Siegal Associate Editor

Jacob Siegal is Associate Editor at BGR, having joined the news team in 2013. He has over a decade of professional writing and editing experience, and helps to lead our technology and entertainment product launch and movie release coverage.