What is Preselling?
If fundraisers accept payments independent of their reward based campaign for the future delivery of a product or service it is considered Preselling.
When fundraisers engage in preselling, PayPal may hold the money to help ensure that buyers receive the product or service they paid for within the agreed timeline or a get a refund if the product isn’t available. Occasionally, businesses that presell items run into unexpected problems that leave them unable to deliver what was promised and can even put them out of business. This puts PayPal in a tough spot when something goes wrong, our highest priority is protecting our customers and creating a positive experience for all users. We want fundraisers to get paid and we want the customer to get what they ordered. If fundraisers can’t deliver, we need to enable the customer receive a refund.
Examples of Preselling associated with crowdfunding are:
- During an active campaign, fundraisers are also accepting pre-orders for the campaign product or service on their website.
- After a campaign has closed, fundraisers are accepting pre-orders for the product or service on their website.
Once the campaign has been launched, we will continue to monitor your account to ensure it remains compliant with our policy and government regulations. Accounts with heightened risk may require us to take action such as imposing a payment hold or reserve.
Sometimes this review takes time and in rare situations, an account may immediately be put on hold until the review can be completed.
Some heightened risks include:
- High likelihood of negative customer experiences from chargebacks, refunds, or fraud.
- Non-compliance with our Anti-Money Laundering Policy.
- Negative publicity about a campaign causing donors to ask for their money back.
- Accepting payments unrelated to the campaign for a high risk business through the same account.