Some crowdfunding campaigns have left a bad impression because even though they racked up millions in contributions, the actual products never shipped. Backers lost their money in some cases and got nothing to show for it. Indiegogo, one of the two most widely used crowdfunding platforms, has taken notice of this and is now looking to change the very concept of crowdfunding.
Indiegogo CEO David Mandelbrot told The Verge that the platform will be experimenting with a new payment method of campaigns called guaranteed shipping. Campaigns with guaranteed delivery will let backers know that they will definitely receive the product that they’re backing. If they don’t get it then the platform guarantees them a refund.
The funds that creators raised through their campaigns will not be released to them until they ship the product or the program launches at first. Indiegogo will be rolling out guaranteed shipping for select campaigns starting next year.
This payment method 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 said. Indiegogo first verifies that a product sold through Marketplace has shipped before transferring the sales money to the creator.