Indiegogo 'guaranteed shipping' will ensure refunds if campaigns fail

Some funds may be withheld from creators until products ship.

Indiegogo plans to start offering "guaranteed shipping" on some crowdfunding campaigns through a pilot program starting in 2019. Creators who choose to partake in the pilot will promise to users that their product will be delivered. If they fail to fulfill that promise, supporters will get their money back.

"We know that receipt of the perk is very important for the overall backer experience on Indiegogo and by guaranteeing delivery of certain perks, we can help ensure backers get their perks or get their money back," Indiegogo CEO David Mandelbrot told Engadget. "This is another way we are helping entrepreneurs bring the next generation of innovative products directly to the consumer."

Details on how the guaranteed shipping process will work are still pretty sparse, as Indiegogo plans to experiment with it. Creators will have to opt-in to the program. When they do, they will be given a "guaranteed shipping" icon that will appear on their page to inform potential backers of the pledge. Per Indiegogo, in certain cases, some funds may be withheld from the creator until they can confirm that they will be able to ship their products on time. The guaranteed shipping option will likely be most viable for existing companies using Indiegogo's enterprise platform to test out new products.

For backers, the guaranteed shipping program offers some assurances when they decide to give to a project. Crowdfunding campaigns often carry the risk of falling through, and there's usually no promise that money comes back. In some cases, the Federal Trade Commission has gotten involved to investigate potential fraud when major campaigns fail to deliver. Guaranteed shipping would serve as a built-in layer of protection against those situations.