[qeorge]

Anecdotal, but maybe helpful: we had a customer purchase software from us almost a year ago, who paid via PayPal but using their Visa. They've now initiated a chargeback. When that occurs, Visa takes the money from PayPal, who takes it from us, immediately - Visa presumes their customer is "innocent" if you will.

It makes no sense, but if you don't like it your option is to not accept Visa. They own the customer so they make the rules. It doesn't matter if its PayPal, Stripe, or any other merchant - if your buyer initiates a chargeback, you'll lose the money until its resolved (~6 months, usually).

As such, PayPal/Stripe/any other merchant account will hold your money for a period of time, until they are comfortable that either:

    1) its been long enough that a chargeback is unlikely
    2) they'll be able to get the money back from you if a chargeback occurs later.

FWIW, all the credit card companies behave this way, and allow their customers to initiate chargebacks for variable lengths of time (sometimes depending on the card type - richer clients can chargeback later.) My understanding is that AMEX has no time limit on chargebacks.

Also relevant to this specific case: its against the TOS of Visa/MC/AMEX/etc to charge the buyer before shipment. You're supposed to authorize at time of purchase and capture only when you actually ship the goods. The OP seems to blatantly violate this, and I suspect they'll have to change the practice regardless of their choice of merchant account.

None of this excuses PayPal's lack of customer support. But Stripe et. all may not be the panacea you're hoping for. Credit cards are where these crazy policies originate, and unless you're prepared to stop accepting them, you'll have to play ball.

[petercooper]

You're supposed to authorize at time of purchase and capture only when you actually ship the goods.

I also believed this to be true, but wouldn't that mean Kickstarter (and therefore Amazon) are flagrantly violating T&Cs? I wonder if Amazon has a special arrangement with the main card issuers in this regard.

[ig1]

Kickstarter isn't prepayment, it's patronage, the providers are under no obligation to deliver the product.

[petercooper]

Kickstarter's T&Cs state:

Project Creators are required to fulfill all rewards of their successful fundraising campaigns or refund any Backer whose reward they do not or cannot fulfill.

http://www.kickstarter.com/terms-of-use

[FireBeyond]

When you fund a Kickstarter project, you're investing in the project.

If it does not fully fund, you receive a refund from Kickstarter.

If it does, your funds go to the project, who are on their best effort to successfully launch the project.

You are NOT, however, directly purchasing a reward. You receive a reward as a gift for helping to fund at a given level.

[nemetroid]

Are you unable to read? The T&C, as quoted, very clearly states that the project creator is required to fulfil the reward or they must refund the backer.

[FireBeyond]

And for those backers not at a reward level?

But you ignore the bigger problem. How are you, as a Backer, able to require a refund because a Project breached its terms with Kickstarter?

[shiftpgdn]

Under what penalty? Plenty of Kickstarter projects have gone unfulfilled with no refunds.

[joeyh]

The teeth backing up that TOS is that if you violate it, you'll probably find it hard to get a new kickstarter project accepted. But that doesn't mean there's a legal obligation to fulfill rewards.

[alttag]

> its against the TOS of Visa/MC/AMEX/etc to charge the buyer before shipment

There are some FTC rules about this too, IIRC, that a product must ship within a certain period following payment. I once worked with a company where this was an issue: they had to provide a great deal of data to the FTC to plead their case.

[icelancer]

Generally 7 days, though it depends on the card issuer.

[bobbles]

FYI,

Here in Australia, my bank told me they were obligated to have a chargeback process resolved within 90 days.

Not sure if its a legal thing or just their own internal policy (Westpac).