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I sure hope these guys ran this plan past PayPal. A high refund rate is a risk trigger at any payment processor. It's seen as a possible sign of there being som
by dangrossman 15y ago
I sure hope these guys ran this plan past PayPal. A high refund rate is a risk trigger at any payment processor. It's seen as a possible sign of there being some kind of fraud or widespread customer dissatisfaction going on, which might be a predictor for an onslaught of chargebacks. If they haven't vetted the plan in advance and had someone add some notes to their account, it could lead to another "PayPal froze our account and we have no idea why" story.
They're a payment processing company, not a free security deposit holding service. Visa and MasterCard also enforce maximum return rates (as a percentage of processing volume), so PayPal has incentive not to allow this kind of use of their service.
- StavrosK 15y agoAren't there services (Square, Amazon) that let you place a hold on the funds and then either release or charge it? How does kickstarter do it?
- dangrossman 15y agoAuthorization holds generally only last 1-5 days (there are special rules for some industries that let them do it longer) -- Kickstarter is probably just doing a quick $0 auth to check if the card is valid and storing it to auth & capture again when the project is committed. They're not holding an auth for your commitment the whole time. That'd tie up money/credit in your account for a project that might not ever be funded.
- StavrosK 15y agoThat makes sense, thanks.