Kickstarter advises people to use "internet street smarts" when deciding which projects to back.
It started as a question about the Ouya, but the conversation soon ended up in uncharted country. The question was simple enough; if Ouya never materialized, would backers of Ouya's very successful Kickstarter campaign get their money back? Ouya wasn't sure, but said that the matter was ultimately a question of Kickstarter policy and not Ouya's call to make. And that is where the train went off the rails, as Kickstarter's founder Yancey Strickler admitted that there was no policy in place for Kickstarter failures, let alone refunds.
"You know, that would be new ground," said Strickler. "I don't know. I mean, no, I don't think that we would. But certainly, the kind of thing you're talking about is not a bridge that has been crossed yet. Someday it will. And you know, I think if something did go awry, it would be ... it wouldn't be my favorite day." It certainly wouldn't; and if you had been one of those who, say, plunked down $10,000 or more - $10,000 was the top tier Ouya pledge level - on a dud, it wouldn't be your favorite day either.
Kickstarter's FAQ is worth consulting. "It is the responsibility of the project creator to fulfill the promises of their project," it says, but adds "Kickstarter does not investigate a creator's ability to complete their project ... If something sounds too good to be true, it very well may be." Kickstarter's final piece of advice is to "use your internet street smarts." Meanwhile Kickstarter's Terms of Service are somewhat less fluffy: "The Company does not guarantee that any Content will be made available through the Service. The Company has no obligation to monitor the Service or Content ... Kickstarter does not offer refunds. A Project Creator is not required to grant a Backer's request for a refund unless the Project Creator is unable or unwilling to fulfil the reward." In the case of a campaign like Ouya, where the console was part of the reward for those who pledged $95 or more, presumably this translates to 'anyone whose reward package includes a console is entitled to a refund if no console is forthcoming,' But as Kickstarter has no means of facilitating this process it will be up to the goodwill and resources of the Project Creator, which may or may not be able to meet refund demands. In the event of fraud - internet street smarts sometimes aren't enough, after all - it would seem backers will be left out of pocket.
Whether or not Ouya becomes Kickstarter's first high profile failure doesn't really matter. What matters is that one of these days a major Kickstarter project will get funding and then implode; demands for repayment will follow. Strickler's least favorite day will have arrived, and what happens after that will probably determine whether Kickstarter retains its reputation as a trusted crowdfunder or vanishes like the works of Ozymandias.
UPDATE: Kickstarter representative Justin Kazmark has contacted me and advised that the NPR quote replicated here was, as Kazmark puts it, "a bit confusing." Kickstarter co-founder Yancey Strickler was responding to a question about the Ouya console itself, and whether or not Kickstarter would get involved if the console failed to materialize. Cash refunds are handled as per Kickstarter's Terms of Service, as mentioned above.