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[Video provided CBS Boston]
• Several people are still waiting for a Kickstarter cooler they backed years ago
• Fraud complaints have led to a government investigation
• Getting a refund is just as much of a waiting game as getting the cooler itself
The Coolest cooler seemed too good to be true - and many people believe it really is. Within minutes of posting a video about the drink holder, which features a built-in blender, bluetooth speakers, cupholders, and holsters for a ceramic knife and plates, complaints started pouring in.
People loved the cooler so much they backed it on Kickstarter, bringing in a whopping 265 times its initial fundraising goal. And, almost three years later, they haven't seen the coolers they paid for. Despite the fact that the cooler's now sold on Amazon and on HomeDepot.com.
The complaints weren't just in the comments of a Facebook video. The Oregon Department of Justice received so many - more than 500 so far - that it launched an official investigation into the Portland-based company. (Department of Justice Communications Director Kristina Edmunson would not comment on the investigation but confirmed that it's ongoing.)
Coolest isn't deliberately trying to prevent people from getting the coolers they ordered, founder and CEO Ryan Grepper said. "In a perfect world, all our backers would have their Coolest Coolers by now, but unfortunately, to make such a high-quality product so quickly for so many people cost much more than we expected," he wrote in an email to Delish. The company's shipped almost 40,000 of the 'project rewards' - AKA gifts people receive for backing them during the Kickstarter campaign, which range from the cooler itself to a plastic "Coolest" party cup. It still has about 1/3 of the rewards left to ship out, Grepper said.
"This is our primary mission, and to accomplish this goal we continue to fund production and ship more backer rewards through new product sales," he wrote.
What Went Wrong
Coolest raised $13.2 million on Kickstarter during its campaign, but that hasn't been enough to fund all of the deeply discounted coolers promised during the campaign. The cooler retails for $450, but Kickstarter backers could get one as a reward for throwing in $185 during the campaign's run in 2014.
"This is beginning to look like fraud and even a ponzi scheme," one backer wrote.
That's why people can order the Coolest on Amazon and have it shipped to their door in less than a week, whereas some of the brand's early supporters have waited years for the same model.
Still, many people are frustrated they paid for a cooler they still haven't received. There's a now-closed Change.org petition urging Coolest to stop selling the appliance to anyone until backers have received their models. "Otherwise, this is beginning to look like fraud and even a ponzi scheme," the petition's creator wrote. It's an understandable complaint, though given Grepper's cashflow issues, it creates a Catch-22: Coolest needs more money to create its discounted coolers to send to its backers, and the only way it can do so is by selling its only product at a markup, so it can use the profits to build more coolers.
The Big Issue With Refunds
At this point, some frustrated backers don't care about getting the cooler - they'd rather have a refund. "Obviously, I was not one of the first, nor was I able to receive a now obsolete 'state-of-the-art' cooler at a price lower than retail customers," backer Colleen Knight, of St. Simons, GA, wrote in an email to The Oregonian/OregonLive.
The problem? Getting a refund also means playing the waiting game. Due to the sheer number of backers - 62,642 plunked down their hard-earned cash - the company's asking people to submit their request for a refund using this online form. Two weeks before your cooler's set to ship, they'll contact you to see if you'd still rather have your cash back. The thing is, you won't know when your cooler's coming in until they contact you.
The terms in place in July 2014, when Coolest Cooler launched, required successful campaigns to refund any backers who don't receive their reward. But the terms don't specify a timeline for this refund. In fact, it goes so far as to say the Estimated Delivery Date is "not a promise to fulfill by that date, but is merely an estimate of when the Project Creator hopes to fulfill by."
"[Getting coolers to our backers] is our primary mission," Grepper wrote.
Kickstarter's policy works in Coolest's favor, considering production costs and delays have caused it to push back its estimated date multiple times. Initially, the campaign said people would most likely receive their coolest in February 2015. Then, in a response to the Change.org petition, Grepper had written that Coolest anticipated having all rewards fulfilled by Spring 2016. Clearly, that didn't happen.
Why Kickstarter's Leaving People Kicking Themselves
Though the project was launched on Kickstarter, backers can't turn to the website to get their money back. It stated this plainly in its terms of use when Coolest launched its campaign - "Kickstarter does not offer refunds" - but the site expanded on this policy in its revised terms of use, which apply to all projects launched on or after Oct. 19, 2014. "Responsibility for finishing a project lies entirely with the project creator. Kickstarter doesn't hold funds on creators' behalf, cannot guarantee creators' work, and does not offer refunds," it states.
Also, under these updated terms, the person launching the campaign can decide whether to offer a refund for rewards. "You can refund individual pledges if you want. After your project has been funded, you can cancel and refund a backer's pledge at any time," it states. There's no clear obligation to do so though - meaning that you're assuming all of the risk if you back a project from now on.
Forbes framed Coolest's funding and delivery struggles as a sort of cautionary tale for anyone thinking of launching a Kickstarter. "It's a good reminder that the cash you raise isn't really from investors but from folks who want your product. What happens after the fundraising campaign ends with the hard issues of product design, supply-chain management and production is what separates the winners from the losers," one staffer wrote in an opinion piece.
Similarly, it's a cautionary tale for anyone thinking of backing a project, too. Unlike shopping online or in stores, there's risk involved with investing in someone's dream - and it doesn't always pay out in the timeline you'd like.
GALLERY: The Best Soft Coolers You Can Take Anywhere [provided by Popular Mechanics]
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