A lot of people don't seem to realize that it's also prohibited by the Visa and Mastercard TOS. You can't bill people's credit cards for a product that doesn't exist yet.
This is true but there are complexities. It's something that people can easily run afoul of if they're not paying close enough attention. If you charge someone for a pre-order of something that doesn't actually exist yet and has a risk of not existing at all then you can be in violation of Visa/MC TOS quite easily. Typically the way most pre-orders work is that there's a deposit and then the actual charge occurs within some window of time prior to the thing being shipped.
If you want to do crowd funding you can do that but you need to set up the expectations differently, to make sure that people know that they are donating to a project and maybe receiving a reward. Also, when purchasing things like plane or concert tickets it's important to note that you're not pre-ordering anything you're buying a reservation, you're purchasing a place on a list which will be used to allow entrance to that event or trip.
Interesting, but can't all pre-orders be thought of like "buying a reservation" ? You don't pre-order a book, you're purchasing a place on a list which will be used to determine who gets the first books.
That isn't remotely true; where'd you hear that whopper? A merchant can authorize and charge a card for any reason, and the cardholder can challenge it and it will be investigated. How would VISA and Mastercard even enforce "the product must exist", honestly? What about my charges for services rendered, or digital downloads, or...
You really think Amazon Payments would have let Kickstarter go this long if they weren't kosher?
Kickstarter is kosher, precisely because as the parent post said ""Kickstarter is not a store, it's just a website where you give money and get stuff in the mail later."
It's the fact that it's a donation, not the pre-purchase of a physical good, that makes it so.
If you're selling a physical good, you're supposed to deliver or ship it at the time of the transaction.
> where'd you hear that whopper?
Originally from our banker at Chase that handled our merchant account set up, but it's easy enough to confirm if you look:
> You really think Amazon Payments would have let Kickstarter go this long if they weren't kosher?
It's worth noting that even though Kickstarter is kosher, the area is gray enough that Amazon is not taking on any more Kickstarter-type sites until further notice precisely because of their legal concerns.
