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PayPal Freezes Mailpile Campaign Funds

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Re: PayPal Freezes Mailpile Campaign Funds

#281

Post by orclev »

Xylakant wrote: post #242
mseebach wrote: post #234

Earlier quoted context omitted.

What does the license of the software have to do with the risks involved? What is the special case that they didn't understand that makes your project a smaller risk? What are the exact mechanisms in place that will prevent the project from failing miserably in any of the myriad ways software projects routinely fail after most of the money is spend and trigger a non-trivial number of chargebacks?

That for example this is not a software project where people for receiving the software. For example the perk for the $4096 backer tier is "In addition to the previous perks you and your logo will be the most prominently featured in our credits. You also get a custom feature / design theme per your specs (see the FAQ for some fine print). In addition, if you fly to Iceland we'll meet with you to discuss the implement…

That last paragraph is I think they key people aren't getting about IndieGoGo and Kickstater. You aren't paying for goods or services when you fund something on those sites, you're essentially donating towards the development of something, and gambling that in the future you'll receive something. The expectation is that the company/people you back will make a good faith effort to provide what they've said they will, but there's no guarantee you'll ever actually receive anything.

Re: PayPal Freezes Mailpile Campaign Funds

#284

Post by kalleboo »

Xylakant wrote: post #157
jasonlotito wrote: post #123

Earlier quoted context omitted.

> they collectively are shouldering a much bigger risk than paypal in that transaction. No, they are not. Financially, PayPal is the one shouldering the biggest risk. Edit: > No and no. They're a payment provider, They most likely have legal obligations in various jurisdictions and with the credit card providers to do due diligence. And looking at business plans and how payments like this will be used is an important…

> No, they are not. Financially, PayPal is the one shouldering the biggest risk. Actually not. Let's assume a chargeback rate of 100%. The donated amount was 135 000 USD, the amount PayPal handled was 45 000 USD, so the remaining backers collectively shoulder about twice as much risk as PayPal. > They most likely have legal obligations in various jurisdictions and with the credit card providers to do due diligence. T…

> Every backer voluntarily decided to support that business

But they can still change their mind and go crying foul to their credit card provider. If there was some way to indicate to the card provider "for this transaction I understand the risks and forfeit my right to a chargeback", this wouldn't be a problem. But as it is now, people can say "oh yeah I'm all for crowdfunding", then when the project fails say "fuck it, I'm getting my money back", and PayPal is shouldering that risk.

> They happily took the money and kept the fees, but will neither refund it to the backers nor cash it out

I'm willing to bet if Mailpile told PayPal, "OK, just refund the backers", they would do it in an instant. If they refunded everyone with no discussion or attempts to resolve anything then people would be even angrier.

Re: PayPal Freezes Mailpile Campaign Funds

#285

Post by surge »

teraflop wrote: post #258
_pius wrote: post #245

Earlier quoted context omitted.

This is absurd apologism. If Indiegogo projects are fundamentally incompatible with PayPal's risk profile as you imply, the onus is on PayPal not to accept money for those projects. Full stop. Why on Earth should we sympathize with PayPal about internal aspects of their underwriting at the expense of a small business whose funds they've practically seized?

As has been pointed out elsewhere, PayPal has an explicit policy about how they handle presales. Why can't I turn your argument around and say that if somebody doesn't like that policy, the onus is on them to not use PayPal?

Because PayPal's job is simply do deliver money from Party A to Party B. It's not their job to worry about how the money is used, the USPS does not audit the check your Grandma sent for your birthday.

Crowdsourcing is a gift, like a donation to PBS, where you might get a coffee mug, but if PBS decides to to stop showing Downton Abbey, you can't rescind your donation.

If PayPal has a problem with charge backs, they could simply stop taking payments for indiegogo projects (which its indiegogo's job to vet projects, not PayPal's) or put in big fat letters that THIS IS A NON-SALE OF GOODS TRANSACTION AND ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED FOR MONEY SENT TO THIS ACCOUNT AFTER FUNDS HAVE BEEN PROCESSED before they click the final confirmation button. Which is basically in writing already when you agree to send funds to indiegogo or Kickstarter. Problem solved. If you have a problem with projects not delivering, don't donate, take it up with indiegogo, or take it to small claims court.

Re: PayPal Freezes Mailpile Campaign Funds

#286

Post by orclev »

patio11 wrote: post #232
mistercow wrote: post #215

Earlier quoted context omitted.

What credit card company allows a chargeback after more than 180 days? The only one I can find that does that in any circumstance is Master Card, and they only do that for "interruption of service" on prorated services.

Amex for one starts the 180 day countdown at the day of delivery or expected delivery , so you can get them to reverse a transaction literally years after the fact if necessary -- pre-ordering Duke Nukem Forever in 2005 would still be chargebackable into 2013 . They're also well-known for bending over backward for cardholders, particularly very valuable cardholders. (They require merchants to retain all records for 2…

With crowdfunding the date of delivery is the date the campaign completes, not the date the rewards, if any, are shipped/published/whatever. At worst given the typical 30 day campaign that means they don't need to worry about chargebacks more than 220 days out. That's still nearly a year, but honestly I think once a campaign funds they shouldn't even process chargebacks against it unless the original backing can be shown to be fraudulent (I.E. stolen CC).

Re: PayPal Freezes Mailpile Campaign Funds

#287

Post by wmf »

surge wrote: post #285
teraflop wrote: post #258

Earlier quoted context omitted.

As has been pointed out elsewhere, PayPal has an explicit policy about how they handle presales. Why can't I turn your argument around and say that if somebody doesn't like that policy, the onus is on them to not use PayPal?

Because PayPal's job is simply do deliver money from Party A to Party B. It's not their job to worry about how the money is used, the USPS does not audit the check your Grandma sent for your birthday. Crowdsourcing is a gift, like a donation to PBS, where you might get a coffee mug, but if PBS decides to to stop showing Downton Abbey, you can't rescind your donation. If PayPal has a problem with charge backs, they co…

Because PayPal's job is simply do deliver money from Party A to Party B.

The problem is that PayPal is not dealing with real money but with credit cards. AFAIK, companies like Western Union don't have such onerous restrictions because they accept cash or as-good-as-cash.

...ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED...

Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business with no chargebacks you cannot accept credit cards either directly or indirectly.

Re: PayPal Freezes Mailpile Campaign Funds

#289

Post by wmf »

orclev wrote: post #275
eli wrote: post #158

Earlier quoted context omitted.

I think you misread what patio11 wrote. As he correctly points out, "Paypal eats 100% of the risk if the merchant doesn't [stay in business]" New companies fail before getting a product out the door all the time. It's a very real risk.

Am I missing something here? Things like IndieGoGo and KickStarter are inherently risky, but not for the payment processor, for the one doing the backing. If you back a project and it goes belly up or for whatever reason fails to deliver or under-delivers that is not "failure to provide service", that was the risk you took when you decided to back them. That money is gone, the horse has left the barn, you have no rig…

That's an interesting position, but do any credit card companies agree with it?

Re: PayPal Freezes Mailpile Campaign Funds

#290

Post by surge »

wmf wrote: post #287
surge wrote: post #285

Earlier quoted context omitted.

Because PayPal's job is simply do deliver money from Party A to Party B. It's not their job to worry about how the money is used, the USPS does not audit the check your Grandma sent for your birthday. Crowdsourcing is a gift, like a donation to PBS, where you might get a coffee mug, but if PBS decides to to stop showing Downton Abbey, you can't rescind your donation. If PayPal has a problem with charge backs, they co…

Because PayPal's job is simply do deliver money from Party A to Party B. The problem is that PayPal is not dealing with real money but with credit cards. AFAIK, companies like Western Union don't have such onerous restrictions because they accept cash or as-good-as-cash. ...ABSOLUTELY NO CHARGE BACKS WILL BE ALLOWED... Credit cards fundamentally allow chargebacks; you can't turn them off. If you want to do business w…

I have checking setup on my PayPal, maybe they should only allow direct confirmed withdrawals then, if VISA or Mastercard is the problem.
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