Read this before you “contribute” to an Indiegogo campaign!

Indiegogo is a site that lets you give money to people. It is not a site that lets you buy things from people. There is a big difference.

According to their Terms Of Service….

All Contributions are non-refundable by Indiegogo and are made in your sole discretion and at your sole risk based on your sole determination and evaluation of the Campaign. You are solely responsible for determining the tax deductibility of any Contribution.

[…]

Indiegogo does not represent, warrant or guarantee:

  • Perks will be delivered;
  • Perks will be satisfactory to you; or
  • The use of any Contributions or the outcome of any Campaign. It is up to you, as the Contributor, to ask such questions and undertake such due diligence as you deem necessary before you make a Contribution. Indiegogo may, in its sole discretion and judgment but is under no obligation to, seek the refund of Contributions.

This means that you should not expect to get your money back from IndieGogo if the campaign takes the money and runs. If you don’t get the perk you were promised, it is up to you to try to sue the Campaign Owner.

This is fine if the campaign is to buy a bus ticket for your best friend’s grandma, and the perk is that she will bake you some cookies. This not fine if you think you are buying an $800 high tech product from someone who lives on the other side of the planet.

I am all for Indiegogo’s “let the people decide who to trust, we just facilitate” strategy. They are like the Criagslist to KickStarter’s curated eBay.  I love both Craigslist and eBay, and there is a role for both models. Criagslist goes out of its way to make it very clear that they are only an open listing service and that you are dealing with whoever posted the listing, so beware. Indeogogo does not.

The Indiegogo site is filled with the language and iconography of a product sale. The various “perks” are listed as products with prices and estimated delivery dates just like you’d see on Amazon.com or Gap.com. They even show a “2 of 10 left” inventory – implying that 10 of the perk actually ever existed in the first place. When the inventory of a perk is gone, it is labeled with the words “SOLD OUT”. What was sold here?

Capture

Come on guys, this is clearly designed to look like you are buying something and not just giving your money to someone.  And the users are clearly fooled. Taking a look at the comments, people say stuff like…

  • How does one change from a purchase of the $99.00 25 watt system to the $239.00 100 watt system?
  • Missed out on the 1kW deal – is there any chance that you will extend it? Would really like to have purchased 4 units.
  • I seperately ordered 2 × 500W panels and one 25W panel. I added the 70 USD shipping for the 2 500W panels to the payment of the 25W panel as I forgot before. Hope that’s ok. Looking forward to the product!
  • So if I buy one of the 500w, all I have to do is “plug n play”?

The comments speak for themselves – these people believe that they are buying a product, and understandably so.

And while IndieGogo does talk about the democratic nature of crowd funding and the need for you to ask questions and make your own decisions, you are not allowed to post a question until *after* you’ve committed to give your money. That would be ok, except for the fact that once you have committed your money so you can publicly ask your question, there is no way to then cancel your commitment if you don’t like the  answer you get! Kafka! This is not compatible with helping the crowd generate and share information so people make informed decisions, and I can not think of any good business or strategic or legal reason why you would stop people from canceling a contribution any time while the campaign is still running. Can you?

Indiegogo needs to get their act together. At very least make it so people can ask public questions before committing money. And then make it so people can cancel a contribution when they find out something that sours them on it. Then change the user interface so it is clear that you are giving money and not buying something. The only action button on a campaign page should be “I want to give money to this campaign!” rather than a product selection rubric. The next page can show the “perks”, but with plenty of disclaimer language like “These are some things the campaign may be able to send you as a thank you for your contribution, but IndieGogo makes no representations as to the campaign’s ability to actually deliver these goods, and your only recourse if you are unhappy to try to sue [insert campaign lister’s name here] directly.”

Not sexy, but at least honest.

18 comments

  1. Charlie

    Good post, well written and explained, but I think you could have gone a lot further.
    – Flex Funding: allows campaigns to collect money without insuring they’ll make enough during the campaign to actually go into production.
    – Many of these campaign have be rerun over and over and over, without ever going into the production stage.
    – Too many campaigns are using 100% computer generated images that look real and confuse pledgers into thinking the product is real and functional.
    – Not only is there no refunds, you can’t even unjust your pledge, even if the campaign is still running. Not only if you regret your “contribution” Purchase, but if (and I’m guessing a very small if) you wished to pledged more. You have to make a 2nd pledge and contact the campaign managers and hope they get it right…
    – Flex Funding again, it is by far the biggest problem and represents the hugest risk to backers. Indiegogo does absolutely Nothing to protect its visitors, and many of the campaigns they promote via email are the worst a users of flex funding and multiple campaigns. And they allow flex funding because they take a larger % of pledges.
    -Flex Funding is the biggest Red Flag to watch for, it’s my opinion that campaigns who use flex funding over fixed, do so because they don’t have faith they will make their own goal needed for production and are looking to grab as much $$$ as possible with contributors taking 100% of the risk and Indiegogo hiding behind their “terms of service”, with NO contribution refunds stuck nicely in the middle.
    – Their comment section is also horrible, having to click “show more” dozens and dozens and dozens of times, seriously it’s horrible for rereading comments from concerned pledgers, and has me wondering why is it so bad???

  2. jennymoveme@hotmail.com

    HI,

    I just got a refund from Indigogo.

    What Indigogo does not discuss is how the relationship Indigogo has with the credit cards they accept trumps the terms/conditions of their contract.

    I got a refund by plainly stating that I understood the terms of their contract, that the ‘contribution’ is non-refundable, and that they claim that their contract is enforceable. I then stated the obvious: According to my credit card company: 1) You are a vendor. 2) The item I ordered has not been delivered.

    I asked Indigogo to please refund my money or I will open a dispute via my credit card company. I know that win or loose a company is charged $20.00 for each dispute filed.

    I then called my credit card company and filed a claim of ‘non-delivery of services’. Indigogo protested. Indigogo lost.

    Good luck to others. May this help you. and YMMV depending on the exact credit card you used.

    Best,

    -JW-

    REF:
    We have an update on the status of the charge dispute filed by Jenny Weston, for the contribution to ‘Jolla Tablet – world’s first crowdsourced tablet’ on February 6, 2015 for $249 USD.

    Although Indiegogo submitted a rebuttal on behalf of the campaign owner, our rebuttal was denied by the billing credit card company. This contribution has been removed from the campaign page and you will not receive any perks (if applicable). You should see a full refund for your contribution within 2 – 3 business days.

    If you have any questions or concerns, please don’t hesitate to contact us.

    Sincerely,
    The Indiegogo Team

    Then Indigogo suspended my account. :)

    • bigjosh2

      Chargebacks work, but only relatively soon after the campaign closes. I think the window to file a chargeback closes 120 days after the statement that contained the charge, so at most 151 days after the charge. Did you file your claim within 151 days of the charge?

      • jeremycirca1980

        Original charge 4/2015. After several emails demanding more money if I wanted to see my product, I opened the dispute 2/2016. So far, what was outlined above is what I’m doing through. I am hoping for a win as well.

  3. Sprenger

    I recently did not receive my perk (and with me many others) and tried to get my money back via the PayPal buyers protection. PayPal denied the claim because they say I did not buy anything but donated instead.

    It’s a definition issue.. I donate currency in exchange of a pre-discussed perk or object. In the Dutch Civil Code that is precisely the description of a buying transaction.

  4. SMARS

    I’m just baffled that anyone gets any kind of contribution at all for their projects. Why would I or any sane person basically make an investment in a business without the opportunity to reap a reward greater than the investment that I made? Why would I accept a “perk” worth a small fraction of what I contributed as an acceptable reward? Am I misunderstanding this model? I just don’t get it. If I give someone money, and they use that money to create something that makes them a bunch of money, I am just supposed to be happy for them and feel a special feeling inside? I don’t think that’s how Buffett operates. If I am wrong on this, please let me know.

    • bigjosh2

      Amen! I do think there is a place for crowd funding when you have a product that is Ready to mass produce, but you need a minimum order size to make it work because of stuff like tooling costs. In these case, backers pre-buy the product and the benefit to them is getting a product that otherwise would not have been available. Unfortunately, very few of the crowdfunded products I see are like this. More are “I think I have a great idea, and I want you to risk your money to see if I can ever make it into a viable product!”

  5. Irfan

    I wish I had stumbled across this before I forked out my cash (not to mention my brothers too). I didnt receive my product, and when I tried to mail the support team at Indiegogo, it bounced back. But I directly copy and pasted the mail from there web site. Something is very wrong with this so called website, and its looking like its at the very minimum a poorly set up site which is misleading people into thinking they are buying an item by contributing. At the worse it may be an intentional scam ! Buyers beware.

  6. Terry

    I’ve now contributed to three campaigns, and wish I’d never done any. The first, the product never got made, oh, sorry….turned out to be a pipe dream (the door lock with a video camera). Indigogo was completely unhelpful and I figured my time was worth more than the contribution, so dropped it. The second, the contribution made before I realized I’d never see the first, was supposed to be delivered last summer, but there are so many excuses (periodically) about the difficulty of manufacture…maybe I’ll get the little keyboard before my grand kids are too mature to need it…and the third, I have to say, I should NEVER have done, but it’s more recent and gee, sounded like an easy one to actually produce, low tech as it were, and I am hoping, hoping, hoping that I at least get the product. Which I then hope I like. Am I stupid? I think so! I have resolved never to look at their offered products again. As a business model, Indigogo is Scam 101.

  7. jl

    But you can ask a question directly to the campaigner, and then if you don’t like the response, post it somewhere, like say on this blog. You seem to be able to do that easily. Or on social media. Or tell your friends about it.

    As a campaigner, I’d prefer people be able to post a question before they contribute. The problem is that if you’d ever tried a campaign, you’d know that most of the “questions” are people trying to sell you stuff, not actual questions. I think that’s why it doesn’t display on the site.

    Yes, you didn’t get what was promised. But I don’t get what I’m promised most of the time, whether it’s in a crowdfunding campaign or something I bought in a store. It’s a problem with people’s behavior, not with a particular website. You are living in a culture that approves of ripping people off. Either accept it or try to change it.

    • bigjosh2

      You can directly ask the campaigner, but then only you know the answer (assuming the campaigner answers). In the case where an answer (or the fact that the campaigner is not responsive to your questions) makes you and other people not want to back the campaign, that information is now only known to you. You can’t even put it into the comments because comments are restricted to backers only, and you are not a backer.

      If Indegogo really wanted to encourage *good* campaigns, they would encourage the sharing of both good and bad information so potential backers could make the best possible decision using the more information they can get.

  8. jl

    I have perfectly good reasons why they won’t stop a contribution while the campaign’s still running.

    1) Honest people try to get you your perk ASAP. That means you can get it, then cancel. Don’t think it happens? There are people on eBay that steal hundreds of items a month that way.

    2) Chargebacks result in account cancellation with both CCs and PayPal. So you’d rather be able to harass people you don’t like and shut down their campaign by contributing and then taking it back over and over?

    3) People change their mind all the time. At some point you need to be responsible and say “yes, that was stupid, but I did it.” Expecting a website to bail you out of your poor decisions is ridiculous.

    4) In fact, stores don’t allow you to do it either. Try taking back items 25 times in the same month to Home Depot and see what happens (unless you’re a contractor).

    5) It’s not a product selling site, no matter what the poor icons and symbols tell you. Yes, it’s not the best website in the world. At least it doesn’t go down every few minutes like other major sites do.

    6) You do realize the photo you posted says “select a Perk for your contribution.” I guess you didn’t read that part too well.

    7) You’re supposed to be an adult. Don’t just randomly click buttons, and think about what you’re participating in, before you do it. Do something more than reading the campaign text.

    8) It’s not an investment. In anything. Indiegogo doesn’t do that as of this date. Other sites do.

    9) Name one transaction, of any kind, anywhere, where people give you more than you give them. Investments don’t count, because of number 8.

    10) Stop using crowdfunding to try to buy discount electronics, and use it for what it’s intended for.

    • bigjosh2

      To clarify, I am suggesting that backer be allowed to cancel their pledges anytime up until the end of the campaign, but not after the campaign is finished. This is before the items have shipped and typically before they have even been manufactured. This should not effect shipping or charge-backs or anything else, except maybe make the campaigner sad if lots of people cancel their pledges based on some new information that changes people’s minds about the campaign.

      I am also not saying anything about investments only transactions that appear to be purchases – but in truth are not. To me (and apparently the vast majority of people who read it), the text “select a Perk for your contribution” implies that I will get something (the perk) in exchange for my contribution. It is misleading, and I think purposefully so.

  9. Karen Livengood

    Since any monetary commitment is via charge card, can’t people go back to their credit card companies and ask for a refund, given the promise (such as it is), wasn’t fulfilled? Guess I’m glad when I tried to buy the silver sheets, the payment page wasn’t working. Think I’ll skip Indiegogo until its more stable.

    • bigjosh2

      Most credit cards require you file a charge back within 30 days of getting your statement or within 120 days from the date of the charge. With most campaigns, the backers do not realize that things have gone sour until after this time limit has expired (sometimes it takes YEARS!), so usually too late for charge-back refunds.

  10. SLVM

    Indiegogo = SCAMMERS – PERIOD.
    i LOSE 133$ for nice packed lies, when delivery time come, they can not deliver any perk, why ? because all is in matter fact a big lie with nice story and photo.
    SO STAY AWAY !
    The big problem is not my lost,,= people will gain no trust on research field….

  11. Jay

    This doesn’t sound right, as IndieGogo has a refund policy. See under the “Refunds” heading in the Terms of Use: https://www.indiegogo.com/about/terms

    In summary: “Contributors may request a refund from Indiegogo before the end of a Campaign”. Seems pretty straight forward to me? Is this a new policy?

    • bigjosh2

      That language was added more than a year after this article was published…

      Sep 1, 2015 The following sections have been updated to reflect Indiegogo’s most current practices: “Refunds”, “Disputes between Campaign Owners and Contributors”, “InDemand”, and “Payment Services”.


      REFUNDS

      Contributions, along Contributors may request a refund from Indiegogo before the end of a Campaign here. For Campaigns that have entered the InDemand program, Contributors may request a refund from Indiegogo within 10 days of the contribution, here. Contributions are eligible for a refund by Indiegogo unless (a) the contribution funds have already been transferred to the Campaign Owner, (b) the Perk associated with our feesthe contribution has been fulfilled, or (c) Indiegogo determines that there has been an abuse of these Terms of Use. Indiegogo reserves the right to terminate User Accounts and charges, are not refundable. remove Campaigns for any abuse of this refund policy. For Campaigns that have ended, or in situations where the contribution funds have been transferred to the Campaign Owner, Contributors should contact the Campaign Owner directly regarding refunds.

      http://www.paranoidpaul.com/compare.php?site=75&doc=311&old=713&new=1601

      Certainly a move in the right direction, but still not the policy I would pick if the true goal is to help the crowd generate and share information so people can make informed decisions. A better system would let you pledge *contingent* the campaign answering your question, rather than forcing you to give money just to be allowed to ask, and then making you try to claw you money back if you don’t like the answer (or don’t get an answer at all). Or have a meta-moderated QA that happens before the campaign even gets to start collecting pledges, and have the answers to the questions during the QA be incorporated into the campaign itself.

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