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.
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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.