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Comment by kylec | Hacker News Reader

I have not used Kickstarter, so the surprising revelation in this article for me is that charge backs come out of the dispersed funds and not Kickstarter itself. I'm sure if Kickstarter itself had been eating the losses they would have detected it a lot sooner and would have taken faster, stronger measures to identify and remove suspected fraudulent transactions than they seem to be taking now.

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Yes ... Kickstarter's interests are not at all aligned with the project creators or the backers, but rather benefits from the highest possible pledges. Stepping aside of all the other issues works perfectly for them so long as their reputation isn't too tarnished.

Does Indiegogo have a shot at unseating Kickstarter (or do they engage in the same tactics)?

Indiegogo came before Kickstarter by about two years and has fallen behind in project count:

http://www.theverge.com/2013/8/7/4594824/less-than-10-percen...

They don't have the skill or resources, in my opinion. I've funded a few projects there and it's often a nightmare- pages timing out, extreme load times, outright failures.

While the code for displaying projects seems to work, the actual act of pledging to them doesn't. I imagine they lose a ton of pledges simply because people aren't willing to jump through hoops to make the site work.

This is exactly what we're trying to fix with IgnitionDeck (shameless plug: http://IgnitionDeck.com). Kickstarter fails in a lot of areas, but this is a failure they should be ashamed of.

'Read the FAQ' is not good enough, but that's the same vibe I got from them when applying for my first project many years ago, and why I never went with their platform.

At some point, this will unravel and significantly damage the industry. They need to step up and back their creators, without whom they wouldn't have a platform.

This is pretty much identical to what eBay and PayPal have been doing to sellers for years. They do offer "seller protection", though, which guarantees that that will come up with a valid reason for taking your money away when a chargeback occurs.

If an end-user experiences a chargeback, why should Kickstarter pay for that and not the end-user? The end-user would be getting free money at that point, if the funds weren't withdrawn from their account.

Kickstarter charges fees.

These are taken from the kick-started funds.

When a project sees a chargeback that should be repaid by both the kick-start project owner and kickstarter.

Otherwise, Kickstarter is getting free money. (From the kick-start project owner, who is the victim of a crime.)

If the campaign receives $100, then let's assume Kickstarter takes $5, and $95 goes to the campaign.

If the campaign receives a $100 chargeback, then the campaign should get charged $95 and Kickstarter should give back their $5. This is the proper way to do it. I don't know how Kickstarter does it, but if they don't give back the portion of fees that they charge, that would be strange to me.

However, usually chargebacks come with fees, around $15. I see no problems with the campaign having to pay these chargeback fees. I believe it's the cost of doing business for any campaign that accepts anonymous donations from the internet.

They're a funding platform. They should handle funding errors.

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