The Kickstarter Blog

Accountability on Kickstarter

Yesterday, NPR's "All Things Considered" asked, "When a Kickstarter campaign fails, does anyone get their money back?" The story questioned what would happen if a Kickstarter project failed to follow through on its promises. The piece raised a number of questions about accountability on Kickstarter, and we want to talk directly about them today.

Since Kickstarter's launch in April of 2009, nearly 30,000 projects have been successfully funded by more than two million people. These projects include documentaries, albums, art, products, video games, plays, books, performances, food, and much more. The number of creative projects that have been funded and produced on Kickstarter in the past three years is enormous. Many could not exist otherwise.

But of course not every project goes perfectly. Delays do occur, especially with more complicated projects. Some creators get in over their heads dealing with processes that are new to them.

We take accountability very seriously at Kickstarter, and the questions raised by NPR are important ones. We've addressed a lot of these questions through the press and in various places on the site, and today we want to go over how accountability works on Kickstarter. We've also added the questions below to our FAQ. Thanks for reading.

Does Kickstarter screen projects before they launch?

Yes, but only a quick review to make sure they meet our Project Guidelines. Kickstarter does not investigate a creator's ability to complete their project. Backers ultimately decide the validity and worthiness of a project by whether they decide to fund it.

Who is responsible for completing a project as promised?

It's the project creator's responsibility to complete their project. Kickstarter is not involved in the development of the projects themselves.

What should creators do if they're having problems completing their project?

If problems come up, creators are expected to post a Project Update (which is emailed to all backers) explaining the situation. Sharing the story, speed bumps and all, is crucial. Most backers support projects because they want to see something happen and they'd like to be a part of it. Creators who are honest and transparent will usually find backers to be understanding.

It's not uncommon for things to take longer than expected. Sometimes the execution of the project proves more difficult than the creator had anticipated. If a creator is making a good faith effort to complete their project and is transparent about it, backers should do their best to be patient and understanding while demanding continued accountability from the creator.

If the problems are severe enough that the creator can't fulfill their project, creators need to find a resolution. Steps could include offering refunds, detailing exactly how funds were used, and other actions to satisfy backers. 

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.

Can Kickstarter refund the money if a project is unable to fulfill?

No. Kickstarter doesn't issue refunds, as transactions are between backers and the creator. In fact, Kickstarter never has the funds at all. When a project is successfully funded, money is transferred directly from backers' credit cards to the project creator's Amazon Payments account. It's up to the creator to issue a refund, which they can do through their Amazon Payments account. (Like PayPal, Amazon Payments allows refunds for 60 days from the date of charge. After 60 days, creators cannot reverse the same charge to backers' credit cards, so to issue refunds they'll need to initiate a new transaction to send money via Amazon Payments or PayPal, send backers a check, or use another method. Our support team has guided creators in how to issue refunds like these before.)

Why can't Kickstarter guarantee projects?

We started Kickstarter as a new way for creators and audiences to work together to make things. The traditional funding systems are risk-averse and profit-focused, and tons of great ideas never get a chance as a result. We thought Kickstarter could open the door to a much wider variety of ideas and allow everyone to decide what they wanted to see exist in the world. Kickstarter is full of ambitious, innovative, and imaginative ideas that aren't possible anywhere else. 

The pursuit of these projects with a guarantee doesn't work. A Kickstarter where every project is guaranteed would be the same safe bets and retreads we see everywhere else. The fact that Kickstarter allows creators to take risks and attempt to create something ambitious is a feature, not a bug.

What is Kickstarter doing about fulfillment?

As Kickstarter has grown, we've made changes to improve accountability and fulfillment. In August 2011 we began requiring creators to list an "Estimated Delivery Date" for all rewards. This was done to make creators think hard about when they could deliver, and to underline that Kickstarter is not a traditional shopping experience.

In May 2012 we added additional guidelines and requirements for Design and Technology projects. These include requiring creators to provide information about their background and experience, a manufacturing plan (for hardware projects), and a functional prototype. We made this change to ensure that creators have done their research before launching and backers have sufficient information when deciding whether to back these projects.

We've also allocated more staff to trust and safety. We look into projects reported by our community for guidelines violations and suspicious activity, and we take action when necessary. These efforts are focused on fraud and acceptable uses of Kickstarter, not a creator's ability to complete a project and fulfill. On Kickstarter, people ultimately decide the validity and worthiness of a project by whether they decide to fund it.

Comments

    1. Fb_profile_picture.small

      Creator Shauna Nicholson on September 4, 2012

      Thanks for this clarification!

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      Creator Lucas Seuren on September 4, 2012

      I wondered about a lot of these things, clear update. Cheers.

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      Creator Eric on September 4, 2012

      Granted I have funded only 2 (or 3?) projects that were all but guaranteed to result in a product, I never looked at it as anything more than a Donation in the sense that, no matter what, if I pledged $15 I was okay, as a funder, to never see that $15 again or any product as a result.

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      Creator Ben Forman on September 4, 2012

      In what scenarios will Kickstarter refund their 5% fee?

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      Creator Michael C. Stettes on September 4, 2012

      Nicely explained. Thanks!

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      Creator Buddah on September 4, 2012

      "Is a creator legally obligated to fulfill the promises of their project?" seems to imply there is legal recourse, but I've backed a few projects that were never fulfilled and the only response I've ever gotten from Kickstarter directly is "Sorry, you should contact the creator". So now that you've gotten some bad press will you finally do something with some of these deadbeat projects?

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      Creator Max Fenton on September 4, 2012

      "The fact that Kickstarter allows creators to take risks and attempt to create something ambitious is a feature, not a bug." = BRAVO.

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      Creator Caetano Films on September 4, 2012

      I love looking through all the creative projects! It really makes me happy to see a site like this make peoples dreams turn into reality!

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      Creator Nic Lindbergh on September 4, 2012

      You need to look into this project. They aren't being honest and refuse to respond to anyone asking for refunds. It's been over nine months since the project was funded, and they still have no timetable for completion. http://www.kickstarter.com/projects/832784035/orbit-a-swiveling-smartphone-suction-mount

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      Creator Dustin Andrews on September 4, 2012

      If someone is forced into a position where they have to offer refunds, does Kickstarter have a way to facilitate that?

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      Creator Zac Shaw on September 4, 2012

      As incredible as it is that Kickstarter took this long to address with clarity what has to be the most FAQ of the service, this post is much appreciated. Could still be more transparent. Crowdfunding is about to be barraged by regulatory attacks, but we need to protect the Kickstarters and IndieGoGos of the world to protect our culture and ability to innovate.

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      Creator Amanda J. on September 4, 2012

      I am also curious, as I backed a project that has not been fulfilled and the last update was February 14th. I tried contacting the creator directly and have not heard a response.

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      Creator Brandon Eley on September 4, 2012

      Kickstarter needs a feedback/ratings system for project creators. There are lots of "serial" creators, many that have had some great projects. But a few are notoriously late, maybe even have some that never shipped at all. There should be a rating system after a project is successfully funded to let backers rate the creator on several different areas, including that they received the reward and it was as promised, received it within the promised time frame, there was open communication, etc.

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      Creator Elizabeth Potts Weinstein on September 4, 2012

      The feedback/ratings system on project creators is an excellent idea! And ... sounds like that would be in line with Kickstarter's role.

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      Creator Joe McDaldno on September 4, 2012

      @Brandon Eley, I think a 5-star rating system for project creators is an excellent idea. (I say this as someone who has created Kickstarter/IndieGoGo campaigns before.)

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      Creator Jon Colverson on September 4, 2012

      Perhaps something that would help reduce the risk of failed projects would be some sort of "milestone" system:

      Say there's a project for a $120 doodad. The creator could post it with three milestone dates on the way to the completion of their project, together with what they're going to achieve by that date. Backers would still back for the full $120 amount up front as now, but the creator would only get a third (in this example) of the money straight away, and Kickstarter would hold on to the rest.

      Then at each milestone the creator would make a post about their progress so far, and any backers that aren't happy with the progress could get a no-questions-asked refund for the 'remaining' part of their pledge. That way help backers feel better about pledging for more expensive things since they know that they have some control about whether the creator gets the whole amount.

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      Creator Bryan Rankin on September 4, 2012

      Kickstarter is not another way to window shop on the internet for cool new stuff. You're not just investing in a product, you're investing in the creator and sometimes investments fail. When that happens, generally, if the project creator gave a good faith effort to bring the product to market, the money has been spent. As with all investments, there is risk involved.

      One thing that I would like to see happen a bit more is to get the project backers more involved if the creator finds themselves in over their head. Many people have incredible ideas but they lack the experience necessary to bring a product to market or underestimate the difficulty, which leads to large delays. Your backers want to see your product succeed and they've already put their money behind it. Tapping the experience, abilities or knowledge of your backers could be a great way to help kickstart a stalled project.

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      Creator Joe McDaldno on September 4, 2012

      I just wanted to mention to all reading that in March, I wrote a blog post about best practices for Kickstarter creators & consumers. It's my own personal opinions, but they're grounded in participating in Kickstarter campaigns and in talking with others who have done likewise:

      http://buriedwithoutceremony.com/kickstarter-best-practices/

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      Creator Bobby Davis on September 4, 2012

      Projects take time. I can handle that. I love that many (hopefully most) projects are created by people who are not "professionals" and therefore, may not have an engineer and manufacturer on speed-dial.
      I've backed 19 to date with one failure and I will continue to back more.
      Kickstarter is for creators and backers who take on an element of risk. This is the world grown-ups live in.

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      Creator Brenda Mallett on September 4, 2012

      We have had great success backing people on Kickstarter. Thanks for the clarifications. We love falling in love with great people with cool, inspired ideas.

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      Creator Iain MacKinnon on September 4, 2012

      Whilst I 100% back the idea of Kickstarter, even if a project I back fails, I do quite like the idea of a ratings system for people who use it to fund more than one project. My only problem there is that I don't want new Kickstarters to be put off because they will look bad compared to people with already existent high ratings.

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      Creator Mary Kenyon on September 4, 2012

      I have been a Kiva supporter for years and love the opportunity to share funds with Kickstarter businesses, too. The funds I give are a method of "paying it forward" instead of a way to get cool stuff. I am really glad Kickstarter let's the fundraising go past the 100 percent mark. Anyone who has had a start-up business knows to add 25 percent to any funding estimate!

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      Creator Craig Indy on September 4, 2012

      KickStarters could require that all project creators back a project first. I know it recommanded I back a project first before launching my project, so I could get an understanding of how the pledging process works, but it wasn't required. I'd say a $25.00 requirement would turn most scammers away.

      Also, how about requiring all creators to write a disclaimer that outlines what they'll do for backers if they fail to complete the project. This will force the creator to come up with a 'make-good' plan if they fail to complete their project, as well as give the backers more information concerning making a decision to back a project or not. Just my two cents, now back my project!
      http://www.kickstarter.com/projects/indy5live/a-new-kind-of-story-fictional-thriller

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      Creator Craig Indy on September 4, 2012

      Also, if 60-days is the non-refund period for Amazon. KickStarters should send out a Survey to all Backers 15-days before the 60day mark, asking questions like "How has the creator's communication been?" "Do you feel the creator has a progress on the project since the project was successful?" If they is a lot of negative feedback being return that says the creator isn't communicating or hasn't made any updates or progress on the project, return a link to backers that give them an opportunity to request a refund before the deadline date. Just a thought. Might be more complicated than this.

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      Creator Terry Gauchat on September 4, 2012

      1. Projects should not be allowed to promise "product" as a Reward for funding... Otherwise, call it whatever you want, but this makes Kickstarter a pre-SALES platform and should provide the same protections as eBay or Amazon.

      2. Kickstarter should reduced the amount of risk by setting the MAXIMUM funding for Projects; perhaps a rule of 2x Goal funding.

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      Creator Brian Smith on September 4, 2012

      I agree with Terry, ist Sems ridiculous that someone who asks for 50k can end up with millions. The need to plan better.

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      Creator Andy Hilal on September 4, 2012

      >We take accountability very seriously at Kickstarter

      This is easy to say, but when I experienced a failed project a year ago, I could find absolutely no information on your site about what to do. It wasn't even in your FAQ. Now that the press is giving you a hassle, you "take this seriously" but you ignored my support inquiry about it when I wrote in to you.

      All I see here is that you're not involved, you don't touch the money so you're not accountable. You leave the backers and the creators to work it out.

      Oh, but your Terms of Service obligates the creators! I would file that detail under "gee thanks." In practice, that's not a lot of help to those of us who've lost money to a deadbeat project.

      If you took accountability seriously, you would actually serve as the arbiter of these transactions and enforce trust and safety standards on the release of funds to creators. Plain and simple. What you're doing here is minimizing your own accountability, which anyone can understand. But please don't turn right back around and tell us how seriously you take these matters.

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      Creator Tim Votra on September 4, 2012

      I wish kickstarter would give you the exact reasons why they do not let you launch your project. When you compare yours to others, that did launch, they seem very close to being the same as yours. I think kickstarter owes that to the those who tried. Does anyone else wonder why their project did not make the cut? Other than it does not meet our guildlines?

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      Creator Chris Stewart on September 4, 2012

      Thanks, Perry, for reminding the community that projects involve risk and our investment is first and foremost a vote of confidence in the creator. With Kickstarter and other like-minded services in place, past experience and social credibility is the new barrier to entry more than starting capital. I only invest in projects where A) the backer has genuine market credibility for past successes, or B) my peers have invested, lending social credibility to the creator's ability to deliver the goods.

      I'm tired of the mass media's shallow and pessimistic coverage of crowdfunding. This is a new industry that's fundamentally good for creators and consumers and should be protected from the old guard. Keep up the great work!

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      Creator Josh on September 4, 2012

      I see some mixed messages here. They say pursuit of projects with a guarantee isn't the heart of crowd funding, but also make requirements that all rewards be fulfilled or creators must give refunds. The only way these two coexist is if the product is not a reward. But the majority of product oriented projects have the product as a reward. In fact that is what makes many of these projects exciting to back and why they are so successful in the first place.

      The investment mindset is what Kickstarter needs to be emphasizing, not refund accountability. The requirement should not be that creators give refunds and an explanation, but refunds or an explanation of their good faith effort. Just saying we "hope" people don't demand refunds is naive and makes this means of raising funds more risky for the creator than the investor.

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      Creator John Palmer on September 4, 2012

      Nice summary! Often, in discussions about starting a Kickstarter project, these questions come up.

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      Creator Tim Domke on September 4, 2012

      In your Q&A you describe payment and refund policy with references to PayPal. I would much prefer to use PayPal with Kickstarter. What are your plans for supporting PayPal payments?

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      Creator Alfred Milgrom on September 4, 2012

      I would say that there need to be even better rules for accountability.

      One very important thing that is missing is that there is no requirement on Kickstarter for a contact email address. That makes it very easy for the Project creators to escape accountability.

      Secondly, it needs to be clear what is promised. Is it a promise of "best effort" or a promise of a product?

      Finally, the Project creators need to be held accountable in some way. I backed a project where the creator decided not to send emails when the item was sent out, kept no records of the mailings, and so on .... In other words, it is impossible to prove whether the item was shipped or not.

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      Creator Bruce Winther on September 4, 2012

      Perhaps Kickstarter project people could be rated on their ability to come good on their promise, if they have already had a project before .. Something like the ratings on Trip Advisor ?

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      Creator Adrian on September 5, 2012

      "Kickstarter is not another way to window shop on the internet for cool new stuff. You're not just investing in a product, you're investing in the creator and sometimes investments fail. "
      - Bryan Rankin
      ( http://www.kickstarter.com/blog/accountability-on-kickstarter#comment-1294786 )

      This can not be over-emphasized. You _should_ consider your pledges as just that - *pledges,* not purchases.

      Yes, there are fraudulent projects, but that is not the same thing as a project that simply fails. In those cases, a creator should do their best to refund money - but the notion that backers are entitled to refunds -full or not- is flawed, and points at a deeper misunderstanding of what KS is. I say this as both a project backer and a creator.

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      Creator Adrian on September 5, 2012

      in my comment above, please note that my opinion about backers not being entitled to refunds is directly related to my distinction between "failed" projects and "fraudulent" ones - in the case of fraudulent projects (including where a creator decides later to drop everything and/or use the money for something else), yes, people deserve to get their money back, and it would be nice if they didn't have to resort to a lawsuit to do so. nobody wins, if it comes to that.

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      Creator Adrian on September 5, 2012

      This is worth emphasizing also.

      "The investment mindset is what Kickstarter needs to be emphasizing, not refund accountability."
      - Josh
      ( http://www.kickstarter.com/blog/accountability-on-kickstarter#comment-1295922 )

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      Creator Gijsbert Koren on September 5, 2012

      Great explanation. Thanks. Do you think the 'Estimated Delivery Date' creates the feeling of a shopping experience, or the feeling of a highly uncertain adventure? In my case it's the first one...

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      Creator Kolbe Global Logistics LLC on September 5, 2012

      Excellent looking forward to a great future with Starter the our campaign is almost ready for review and launch with independent funding as well.The Apollios is a go~CWC

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      Creator Daniel Kian Mc Kiernan on September 5, 2012

      I'm glad that Kickstarter has finally made it both clear and concise that project creators have a legal obligation to deliver any and all promised goods. Now:

      [1] Use the word “success” honestly. Never again confuse cases where projects met funding goals with case where they actually delivered what they promised; and apologize, very publicly, for confusing these things in the past.
      [2] Create a public list of every project that is problematic. This would include (but nor be restricted to) cases where the creator has not delivered and [A] gone silent for more than a month (for example, Cookie Connections) or [B] admitted to having run-out of funds (for example, ZionEyez).
      [3] In cases where project creators have defaulted (for example, Hanfree), provide contact information for the creator to each and every funder. And do not fight any subpoenae for each and every bit of information that the creator filed with you.

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      Creator Daniel Kian Mc Kiernan on September 5, 2012

      Adrian, you cannot spin the legalities here.

      The *ethics* come down exactly to what project creators actually promise. Those who only promise that their buyers *might* get something could walk away. (Of course, it becomes harder to raise the money if one reserrves the right to flip-off the customer.) Those who didn't hedge (and I've not seen any who actually did) cannot ethically walk away; they must deliver the product or find a way to return the money.

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      Creator Dynamic Adventures Inc. on September 5, 2012

      Keep up the good fight! There is no guarantee of success in this world or on an particular project, but when we fail to try we truly fail.

      As Kickstarter becomes more successful expect more questions to be raised from traditional sources, keep answering them in this clear of a manner and this site and its' mission will continue to grow.

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      Creator Antonio Garcia on September 5, 2012

      So far so good. All the KS I've backed have delivered (some before the date, some a week or two after), so there have been no complaints from me.

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      Creator Jeffrey Kesselman on September 5, 2012

      So, what they are saying is "its our policy that projects deliver... but you'll have to chase the project owners 'cause we aren't liable".

      Which is to say, its a fairly meaningless policy. At most, they might ban people with projects that don't deliver from doing another project, but given the anonymity of the internet I am not sure they can and certainly haven't heard of them doing so yet...

      Or am I misunderstanding and would someone from Kickstarter like to explain clearly what *they* will do for backers of a failed project?

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      Creator Richard NL on September 5, 2012

      "[...] transactions are between backers and the creator. In fact, Kickstarter never has the funds at all. When a project is successfully funded, money is transferred directly from backers' credit cards to the project creator's Amazon Payments account."
      But KickStarter does take a small percentage of that money - however that is technologically set up. Answering Ben's question ( http://www.kickstarter.com/blog/accountability-on-kickstarter#comment-1294602 ) would seem to be relevant in terms of clarifying KickStarter's accountability in terms of handling the pledged funds.

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      Creator Carl Bussema on September 5, 2012

      I think Jeffrey Kesselman nailed it. If you have a policy but no means to enforce it, what good is the policy? Backers gather into a class-action-lawsuit to sue the creator who has already spent the money? Good luck.

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      Creator MarkandRoger on September 5, 2012

      KS offers an attractive alternative funding method for video game developers. Because games blend various art forms and can distribute products digitally, supporting creative freedom is a win-win (consumers get interesting games and can usually play early versions, and developers can infinitely satisfy demand at low cost). If KS can create a category that encourages/rewards actual, playable game projects (a demo or "alpha" version), it will build trust with prospective backers, help give them a solid basis for making a decision, and eliminate potential fraud.

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      Creator Jeffrey Kesselman on September 6, 2012

      Richard got me curious so I went and looked at my Amazon payments account.

      It shows my project payments as being directly to the account of the project owner. Whats interesting though is that it show the full amount as paid to the project, not the amount minus Kickstarter's cut.

      I imagine this must make Amazon's books look a bit irregular as the project owner did not receive it all.

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      Creator Jeffrey Kesselman on September 6, 2012

      Addendum: On thinking about it further my guess is that their books treat the entire chargeoff for both their cut and Kickstarters as a transaction charge, the same way they do their cut alone on other payments. That would make the accounting work.

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      Creator Edward Melville on September 6, 2012

      I've caught some flack about my project simply because I have a working playable version. It's almost like I shouldn't even be here because my idea isn't a "concept". All this while some are complaining that projects are not being fulfilled, mine is almost guaranteed to be. Does that seem reasonable?