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Comment by simias | Hacker News Reader

I don't really understand how that works, surely by the time the rewards are shipped surely the money is already in the hands of the creator? How can the scammer retract his pledge by that point?

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Presumably he pays with a credit card and does a chargeback two or three months after payment, at which point physical rewards have already been shipped. Most payment processors will hold a reserve for a set amount of time for this exact reason.

While I can understand how this would cause problems for a merchant accepting a continuous cycle of payments, why would someone doing a Kickstarter not withdraw all of the payment to a separate account before shipping any of the orders? To the best of my knowledge, Kickstarter pays out the full amount right away; they don't force you to withdraw it incrementally as you need it.

That's not going to stop the bank from giving you a negative balance and sending you to a collections agency.

Sure, you're still going to have to deal with the dispute resolution process, but you get to negotiate from a position of strength (you have the money and they want it, rather than the other way around), and you're not in the red by having paid the costs to ship products without getting paid for them.

If you think being in arrears to a bank is "a position of strength", you must have never overdrawn your account.

It depends on the amount of money you owe the bank.

Owe the bank 10 dollars, it's your problem.

Owe the bank 10 million dollars, it's their problem.

Kickstarter's limit is $10k, so it's likely to be your problem. On top of that, bankruptcy would be a problem for most people, even if the bank suffered too.

It's not about who has the money, it's about who is owed money. A chargeback means that you legally owe them the money.

Interesting how they're facilitating fraud, instead of you know, checking to make sure the person who made the order is real..

How long after a payment can I do a chargeback on my CC?

It seems the problem here I can use my CC for whatever, then months and months later do a charge back, even though I got what I originally paid for.

It sounds like the only defense would be to not ship the actual product (reward in this case) until the charge back grace period has elapsed.

Visa and MasterCard allow 2 months. But if you do a chargeback, the vendor can dispute it. Amex allows 4 months (atleast) and the vendor cannot dispute the charge.

So it seems like sites like kickstarter should only allow Visa and MasterCard, and people should not start sending rewards until > 2 months after payment has been received...

Aren't there repercussions for unfounded chargebacks?

Also, if the rewards are physical, surely that leaves a trail - they have to be sent somewhere.

Amazon has a page for that:

https://payments.amazon.com/help/Personal-Accounts/Managing-...

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