Paid for a gadget that never shipped? How preorder deposits turn customers into lenders

Hardware is hard. Startups know it, so many ask customers to pay first. A deposit or full preorder payment funds tooling, components and the first production run. If everything goes well, the customer gets a product early.

If it doesn't, the customer has made an interest-free loan to a company they cannot audit, with a delivery date that keeps moving.

Your deposit is on their balance sheet as a debt

When a company takes money for a product it has not delivered, it cannot count that money as revenue. It records it as deferred revenue, a liability. The company owes you either the product or your money.

That is why preorder balances show up in financial statements. At the end of 2025, Immersed Inc. still carried $2.216 million in Visor preorder and Visor Plus deposits as deferred revenue, to be recognized only when orders are fulfilled. Preorders had opened in September 2023.

What the rules say

In the U.S., the FTC's Mail, Internet, or Telephone Order Merchandise Rule generally requires sellers to:

• have a reasonable basis for any shipping time they advertise, or ship within 30 days if they don't state one;
• notify you if they can't ship on time, give a revised date, and offer you the option to cancel for a prompt refund;
• get your consent again if the delay runs past the revised date.

How the rule applies depends on the facts, including how the preorder was described. But a seller that keeps missing dates without notice and without a real cancel-and-refund option is a warning sign in itself.

If you are waiting on a preorder

1. Save everything: order confirmation, the promised ship date, every update email and every screenshot of the product page.
2. Ask for a refund in writing and keep the reply. Note how long it takes.
3. Talk to your card issuer early. Dispute windows are limited, and long delays can run past them.
4. Read the company's filings if it raises money publicly. Deferred revenue, cash and a going-concern note tell you how likely a refund is.
5. Report it to the FTC at ReportFraud.ftc.gov and to your state attorney general if promises are not kept.