Some crowdfunding campaigns have left a bad impression with backers because even though these campaigns had millions in contributions, the actual products never shipped. Backers lost their money in some cases and got ripped off. Indiegogo, one of the two most widely used crowdfunding platforms, is doing something about this and is now looking to change how crowdfunding works.
Indiegogo CEO David Mandelbrot says that the platform will be experimenting with a new payment method that will curb this. It is called guaranteed shipping. These campaigns will let backers know that they will receive the product that they’re backing and be covered. If they don’t get it then the platform guarantees they will get a refund. Very simple.
The money that creators raise through these campaigns will not be released until they ship the product or the program launches at first. Indiegogo will be rolling this out for certain campaigns sometime next year.
This was first tested by the company in its Marketplace. “So far, backers of products in the Indiegogo Marketplace where shipping is guaranteed have been very happy with the experience,” Mandelbrot says. Indiegogo first verifies that a product sold through Marketplace has shipped before transferring the sales money to the creator. Seems like a great way to make sure everyone is honest.