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PayPal stops protecting you when crowdfunding goes bust

Engadget logo Engadget 9/5/2016 Jon Fingas
© Provided by Engadget

PayPal won't be so crowdfunding-friendly in the future. The payment giant is dropping Purchase Protection for crowdfunding projects as of a user agreement change coming June 25th. From then on, you back efforts at your own risk -- if a campaign goes bust or otherwise doesn't deliver what you were promised, you can't dispute the PayPal charge to get your cash back. You might not want to take a chance on that too-cool-to-be-true gadget, then.

The move is unfortunate if you like to give artists and inventors a helping hand, but it's not all that shocking in light of crowdfunding's riskiness. Kickstarter notes that about 9 percent of its projects never deliver -- even though PayPal only handles some of those transactions, that's a lot of potential refunds. We've asked PayPal for its official reasoning, but it might simply be a matter of wanting to keep costs down.


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