Oregon authorities are investigating Kickstarter darling Coolest
When Coolest debuted on Kickstarter back in 2014, it set a funding record. The do-it-all cooler campaing took in $13 million for an outdoor beverage option with blender, Bluetooth speaker, USB charging and more. The company asked its backers for more money back in April, saying that the price it offered during the crowdfunding campaign was too low. What’s more, some backers still haven’t received their coolers despite the company selling them for a discounted price on Amazon, its own website and other retailers. The Coolest website says that if you hand over $400 for a cooler right now, it will ship in 48 hours.
As you can imagine, this isn’t sitting well with the backers who didn’t have the rolling party cooler in hand for the summer months this year — or last year for that matter. The Oregonian reports that the Oregon Justice Department is investigating the Portland-based company following 315 complaints over the course of the last year. Those complaints claim that not only did the company fail to deliver the promised rewards, but that it also didn’t fulfill requests for refunds. Kickstarter guidelines at the time required a project to deliver the stated rewards or refund the pledges. Unfortunately, there isn’t a mandatory timeline for either those things to happen.
Coolest set that Kickstarter record in August 2014 and promised backers that it would deliver coolers in February 2015. In August of this year, creator Ryan Grepper explained the product was going on sale at “a national chain” in addition to other retailers. “The faster we can place more Coolest Coolers in more retail stores the faster we can generate the revenue to ship even more Rewards to more Backers,” Grepper said in a Kickstarter update for the project’s supporters.
Pledging money for a Kickstarter project is always a risk, but this is a unique case since the product is actually for sale elsewhere even though some people who committed funds still haven’t received theirs. It would be much different had the cooler not been made. Coolest has said that retail sales allow it to finance those backer orders, perhaps as a way of making up the difference from misjudging the production costs. Kickstarter backers were offered a $185 price tag while the cooler is now selling for more than double on the company’s website now.
After The Oregonian report last week, the company posted an update for backers to Kickstarter. Grepper explained that the company doesn’t have the inventory or money to just ship Coolest to the remaining backers who haven’t received one yet. The retail sales are being used to fund on-going production and get those units sent out. Grepper said that the company has run into a number of issues with Amazon’s Launchpad program, including the online retailer selling the cooler at a reduced rate after promising not to offer it below the retail price of $400. He explained that at the price of $225, the company isn’t making the profit needed to make more inventory. We’ve reached out to Amazon for a comment on the matter and we’ll updated when/if we hear back.
Grepper also said that the company has “cooperated fully” Oregon Department of Justice investigation. He said that Coolest was shipping units to backers who formally filed a complaint or threatened any legal action as a way to avoid pricey legal fees. It has since stopped that practice as it gave customers a way to jump to the front of the line for shipping. Grepper said that around 200 backers have filed complaints so far, compared to the over 300 mentioned in The Oregonian report. He also noted that handling complaints filed with the state is slowing down the process even more as Coolest is a small company.
“We aren’t refusing to send Coolests — we can’t afford to and we lack inventory and resources to fulfill all Backer units,” he explained. “We’ve been very clear about our continual efforts in all our updates and are following Kickstarter terms of service.” The Coolest CEO also reminded backers that Kickstarter isn’t a store and he’s right.
“Backers must understand that when they back a project, they’re helping to create something new — not ordering something that already exists,” KIckstarter’s current terms reads. “There may be changes or delays, and there’s a chance something could happen that prevents the creator from being able to finish the project as promised.” These guidelines have been updated since the Coolest campaign.
Supporters pledge money in hopes that the project will be made and they’ll have the opportunity to cash in on their reward. Again, there’s no mandatory timeline for doing so, only a shipping estimate given by a project’s creators and details on delays via regular updates. Grepper said that 3/5 of the company’s backers have their coolers and now the only issue is raising the funds needed to fulfill the rest.
Update: Coolest sent Engadget this weekend’s update after this post went live. This post has been updated to reflect the information in that update for Kickstarter backers. It has also been updated to clarify Kickstarter’s current terms have been updated since Coolest raised money on the site in 2014.
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