Backing items on crowdfunded sites is almost always a pretty bad idea. That’s not to say that there haven’t been some good ideas and products come through your favorite host – like Kickstarter or Indiegogo – over the years, but the true success stories are few and far between. In many situations, products are delivered late, arrive as something far inferior to what you expected, or never materialize at all, leaving you wondering if you’ll even get your money back. Because of the uncertainty and risk, PayPal has decided that it is no longer willing to protect your funds if they are used to back crowdfunded items.
Through a policy update sent out to PayPal members over the weekend, changes highlighted in section 13.3, which is a list of items “ineligible” for Purchase Protection, PayPal has added in “Payments on crowdfunding platforms.” That means that if some crowdfunded yahoo tricks you into a fresh bottle of snake oil, PayPal doesn’t want to hear you come-a-crying for money back.
The new policy update also makes gambling and anything purchased from a government agency “ineligible.”