Kickstarter refunds: what creators actually owe backers

Who pays when a Kickstarter backer wants their money back?

You do. Kickstarter says so in its own Terms of Use, in as many words: it doesn’t offer refunds.

That surprises a lot of founders, and so does the rest of it. Kickstarter refunds are almost entirely misunderstood, usually in the direction of “if it goes wrong, you refund everyone”. I’m an official Kickstarter Expert Partner, and the actual rule is narrower than that, and in some ways harder.

Kickstarter refunds: who actually pays

A pledge is an agreement between the backer and the creator. Kickstarter runs the platform, takes its fee and moves the money, but it doesn’t hold funds on your behalf and it doesn’t guarantee your work.

So there’s no refund department to pass the problem to. Whatever gets refunded comes from you.

While the campaign is live there’s nothing to refund anyway, because nobody has been charged. Backers who change their mind simply cancel, and the rules on that, including the final 24 hours, are in when Kickstarter charges backers.

Once the campaign has funded and the money is collected, it’s yours to deal with. The Terms say you can refund individual pledges if you want to, at any time.

And if you refund a backer in full, you have no further obligation to that backer. The agreement ends there.

What you owe backers if you can’t deliver

This is the part everyone gets wrong. The Terms don’t say a creator who can’t deliver must hand everyone their money back. They say something more specific.

If you can’t complete the project, you have to make a reasonable effort to bring it to the best possible conclusion. You’ve met your obligations to backers if you do all of these:

• Post an update explaining what work has been done, how the money was used, and what’s stopping you finishing as planned.
• Keep working in good faith towards the best outcome you can manage, on a timeline you’ve told backers.
• Show the money was used properly, and that you made every reasonable effort to deliver.
• Stay honest, with nothing materially misrepresented along the way.
• Offer back whatever is left. Any remaining funds go back to backers who haven’t received a reward, in proportion to the amounts pledged. Or you explain how that money will finish the project in some other form.

The word doing the work is remaining. It’s less a get-out clause than a paperwork clause: everything turns on whether you can show where the money went.

That’s why the update matters so much. It’s the first item on the list, and it’s the one founders most want to put off. I’ve written about how to write Kickstarter updates that keep backers with you, and a bad-news update is still an update.

And if you don’t meet those terms, the Terms say plainly that backers may take legal action. Who they’d be taking it against depends on how you’ve set yourself up. As a sole trader, money owed to backers is money owed by you personally, which is the whole argument in sole trader or limited company for a Kickstarter.

How to refund a backer on Kickstarter

It’s done from your backer report, which sits in the creator tools beside your project page.

Find the backer and open their pledge. Click Issue a refund, then choose full or partial.

A partial refund can be a set amount per item, a general figure, or removing an item from the pledge altogether. You pick a reason, add a message if you want to, and choose which saved card pays for it.

That last step is the one that catches people out. The refund comes from a card saved to your account. It’s your money going back, not Kickstarter’s.

What happens next depends on the type:

• Full refund: the backer is marked as dropped. They can no longer comment on the project, though you can still message them directly.
• Partial refund: they stay on your backer report and can still comment.

The fees: refund early and they come back

Timing decides who carries the fees.

Refund a pledge before your payout and Kickstarter returns its 5% fee and the payment processing to the backer. Refund after the payout and you cover those fees yourself.

Refunds of pledge manager orders are always treated as after payout, whenever you issue them. If you’re running add-ons or upgrades through Kickstarter’s own pledge manager, that’s worth knowing before you start taking extra money through it.

The practical rule falls straight out of that. If you already know you’re going to refund someone, a duplicate pledge, a backer you can’t ship to, an obvious mistake, do it before the payout lands about two weeks after the deadline. The fees calculator shows what the platform and processing fees come to on a pledge, which is the amount you’d be paying twice by waiting.

Late pledges work differently

Late pledges, taken after a successful campaign has ended, are charged the moment someone makes them.

Under Kickstarter’s terms a late pledge can’t be cancelled or changed. The backer can still ask you for a refund, and Kickstarter says it isn’t responsible for cancellations or refunds on them.

So the decision lands with you, exactly as it does for campaign pledges once they’ve been collected.

When a backer just changes their mind

Nothing in the Terms makes you refund someone who’s gone off the idea halfway through a production run. Delivery dates are estimates, the Terms are clear about that too, and refunds for anything other than a failed project are at your discretion.

My view is that you should usually say yes anyway, early and without a fight. A single unhappy backer in your comments costs more than their pledge, and refunding before payout costs you almost nothing.

Your own shop is a different animal, and it’s worth keeping separate in your head. Once you sell the same product online after the campaign, GOV.UK is clear that UK customers can cancel up to 14 days after delivery. That’s a shop rule, not a Kickstarter one, so write your policy for each.

Write the policy before the first request

The worst time to decide your refund policy is when the first angry email arrives. You’ll decide it badly, and differently from how you’ll decide the second one.

Write it down before launch. It doesn’t need to be long:

• When you’ll refund, and whether it’s full or partial.
• That anything you already know needs refunding goes out before the payout.
• Who answers refund requests, so it’s one person, not whoever sees the email first.
• What goes in the update if delivery slips, so you’re not drafting it in a panic.

Keep every receipt and every invoice from the factory. If the project ever goes badly, those are what let you show the money was used properly, which is the whole of your obligation.

Want someone to pressure-test yours before launch? A £60 strategy call is an hour on your actual campaign, and you leave with the three things to change.

None of this is exciting. It’s the part of a campaign that only matters when something has already gone wrong, which is exactly why it’s worth sorting while nothing has. If you’d like help from pre-launch onwards, the ways I work with founders are on the home page.

Key takeaways

• Kickstarter doesn’t offer refunds. Any refund comes from the creator.
• Can’t deliver? Offer back remaining funds in proportion, or explain how they’ll finish the project.
• Creators who don’t meet those terms may face legal action from backers.
• Refunds go through the backer report, full or partial, paid from your own saved card.
• Refund before payout and Kickstarter returns its fees. After payout, you pay them.
• Late pledges can’t be cancelled, but backers can still ask the creator for a refund.

Want a hand with yours?

Refunds, delays and bad-news updates are much easier when they’re planned before launch rather than improvised after it.

If you want someone to check your plan and your numbers, book a £60 strategy call. An hour, on Zoom, on your actual campaign. And if you’d like help from pre-launch through to fulfilment, the bigger options are on the home page.