Building off of the much deserved buzz that they generated at CES 2016, Gizmo 3D Printers launched their crowdfunding campaign for their new family of DLP resin 3D printers in March. The campaign would ultimately be a success, raising over $135,000 and exceeding their goal figure by almost 40%. Gizmo 3D Printers unveiled their machine in London at the iMakr Desktop 3D Printing Show, where 3DPrint.com was on hand to see it live. Since the Indiegogo campaign ended on March 31st, du Toit has been regularly updating his backers on their ongoing progress, including two weeks ago when their funds from Indiegogo were finally deposited into his PayPal account.
Gizmo 3D Printers at iMakr London in March [Photo: Sarah Goehrke/3DPrint.com]
"During a recent review of your PayPal account, we determined that it was appropriate to apply a reserve to your account effective in 24 hours. A collateral amount of $80,000.00 will be set aside from your current available balance. In addition, a rolling reserve will be set at 55% of the processed amount for each day, to be held for a 180 day rolling period.
For example, 55% of the payments you receive are held at the end of the first day and will be released 20/04/2016, 55% of your payments are held at the end of the second day and will be released on 18/10/2016, and so on."
Naturally losing out on the ability to patent their technology would be devastating, especially if someone else swoops in and lays claim to all of the work that du Toit has done. The sad irony here is that the very reasons that PayPal gave Gizmo 3D Printers for freezing their account will most certainly happen thanks to PayPal freezing their account:
"Delivery Timeframe – (Extended length of your delivery timeframe).
Overall processing volume – (There is a significant change in the level of payments your business is processing compared to your processing history).
High risk business model – (There has been a change in your business model or your business model is considered high risk due to one, or a combination of the following (list is not all inclusive) – how and when items or service are delivered, item or service being sold, inventory management)."
The extended delivery time frame, the increase in funds deposited into the account and the risky business model are all shared by any crowdfunding campaign, so it shouldn't be out of the ordinary for Gizmo 3D Printers. Unfortunately, as anyone who has dealt with PayPal can tell you, du Toit hasn't had a lot of luck talking to anyone at the company who can help him. He hasn't even found someone who can provide clearer details on why exactly the funds are being held back in reserve or how long it will take them to review the case.
"I spoke to PayPal call center staff that all gave me the same answer – that someone is looking at the case. I then tried contacting PayPal employees directly on LinkedIn, hoping to get hold of a decision maker. They responded saying that they will get someone to email me. Someone emailed saying they are looking at the case and the next email I received after that was the one stating that the money is now reserved. I then contacted the Australian Financial Ombudsman as recommended by PayPal's terms and conditions and any contact I had with any PayPal staff after that ended in them saying that they couldn't talk to me any further about it as it is now a legal matter," du Toit told me via email.
This isn't the first time that PayPal has decided that a company raising money from a crowdfunding website is risky so they find a need to place a hold on the funds. It actually turns out that they have been known to simply block Indiegogo campaigns entirely. While no one could begrudge PayPal from wanting to prevent their customers losing money on risky businesses, someone should probably point out to them that businesses become a lot more risky when they have their money held up and denied to them. We'll keep you updated on the progress of this case, however you can also check out the Gizmo Indiegogo page for regular updates.
Source → The Gizmo 3D Printer Suffers Delay Due to PayPal Freezing Their Account
