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Comment by jxf | Hacker News Reader

That costs Kickstarter more money than waiting until the end.

If Kickstarter deducts in advance and refunds later for a failed campaign, then it must do two credit card transactions: once to charge the money, and another to refund it. Additionally, refunds are sometimes more expensive than charges.

Not only that, but Kickstarter would also have to worry about situations like, e.g., Alice pledges money, and then later closes her card account. How would Kickstarter get the money back to Alice?

So it's almost certainly done for reasons of simplicity and avoiding legal/ethical obligations about safeguarding the money in escrow.

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Indiegogo has surmounted those obstacles and charges a pledge when it is made then refund slater if the campaign doesn't succeed. That might be a competitive advantage going forward.

I reckon you could charge a certain % of the pledge to prevent this kind of trolling. You'd still be allowed to back out, but the money would stay on Kickstarter and cannot be withdrawn, but instead just put towards another campaign (but that money no longer counts towards the reserve of future campaigns). This makes sure that the troller gets their money locked up in Kickstarter. Few if any legitimate Kickstarter funders would be bothered by this and if they really were bothered by it, Kickstarter staff could evaluate those few incidents on a case by case basis.

> Few if any legitimate Kickstarter funders would be bothered by this

Except those that only come to Kickstarter to back a specific campaign, instead of backing lots.

Then these people should better not back out.

so sort of like store credits, where you return a good you purchased, but can only use the credit to buy something else from the store.

I don't know if "surmounted" is the right word. Kickstarter has made deliberate choices to operate this way. Kickstarter favors the backers, not the campaign. They surely know well how the system operates, and it's not an obstacle per se, but a rule of their game.

That is an option that can be changed, there have been indiegogo projects such as the ubuntu phone, that would only have charged if funding had been successful.

Not true. I was frustrated when indiegogo deducted money from my bank account instantly when I pledged for the Ubuntu phone. It was surprising because I had only pledged significant amounts on kickstarter previously. Honestly, for someone without much in the way of liquid assets it was frustrating to have so much money frozen for over 30 days.

And you highlight probably the biggest issue with indiegogo's approach. Keeping money tied up while waiting for the project is pretty bad.

They could reserve the funds in the account (like most sites do), right?

The time an authorization on a credit card lasts varies by issuer; it may be as little as week on some cards. That said, many payments gateways allow you to later process a new authorization with the original transaction reference.

Even if they can't re-authorise, they could just do authorisations for donations made in the last week.

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