Need a PayPal refund for your BFL purchase?

[donch]

I received a refund.  If BFL is so inept that they can't track such things, and if they send me unsolicited merchandise in the future, I'll sell the stuff on eBay, and wish them good luck with trying to sue me for payment.

Well my unsolicited merchandise is in a transatlantic state. I feel like saying I'll pay for the goods when it shows ROI, i.e. never...

[donch]

Paypal update. I asked for some advice:

thank you very much for the response and reassurance that the refund is final. Much appreciated! A final question is that as soon as the item arrives in the UK I will receive a request for payment of import duty, which is 20%. In other words, because BFL has not halted the shipment I'm liable for approximately £160 in tax payable via Parcelforce (the courier here) to the UK government. They pay the tax up front and collect from the recipient afterwards...

Do you have any advice regarding this? My last ditch option is to accept the parcel and immediately sell it on eBay, but this feels like I'm being forced into a situation of inconvenience, just because a company wants to make life awkward for people like me who are highly dissatisfied with their service. Butterfly Labs have become both notorious and infamous in the Bitcoin world. This is one example from many that I'm sure you are aware of :-)

Any advice much appreciated again!

To which the genuinely helpful response was:

I appreciate this opportunity to address your concerns further. With respect to the package that Butterfly Labs Inc. has sent, we recommend that you refuse the package and have the item sent back to the merchant. However, we would advise that you do what will benefit you most with respect to this situation.

Please let us know if we can be of further assistance.

I love the ambiguity! BFL are never going to get another penny out of PayPal. That is for sure. I'm just going to sit tight and watch out for whatever dastardly new tactic Josh et al come up with to try and extract some cash from me.

[jpmi1]

"Should you have a PayPal problem that needs decision making authority, these are the persons you can contact directly. Each one of these persons has the power to review your account, unlimit your account or arrange for your money to be returned to you.

PayPal Office of Executive Escalations:

1-402-935-2269 (Michelle, Executive Escalations)

1-402-935-2116 (Elizabeth Morey, Supervisor, Executive Escalations)

1-402-935-2172 (Adam Braasch, Senior Agent)

1-402-935-2268 (Beth Beutler, Senior Agent)

1-402-935-2174 (Jackie Hart, Senior Agent)

1-402-952-8951 (Michael Lazure, Senior Agent)

1-402-935-5073 (Stephanie Mikovec, Senior Agent)

1-402-935-2331 (Tara Stevens, Senior Agent)"

Only Tara, Adam and Michael worked for me. Hopefully something good comes out of those phone calls.

Thanks

[jayeeyee]

Just received an email from BFL regarding my refund.

While we reserve the right to handle refund requests on a case by case basis, pre-ordered products are non-refundable as is clearly stated at the time of purchase.  The reason for this is that pre-order funds are used in the build process which makes it impractical to reverse.  It's also been observed that some small number of customers have placed orders as part of a bitcoin price hedging strategy which involves multiple requests to cancel and then re-enstate their orders as market conditions change.  This has created an enormous customer service burden which is resolved by enforcing the all sales final policy.
Some customers have asked why we've given order cancellation refunds to others, but they can't get one.  The answer is that we had opted to process order cancellation requests during our long product development phase as a courtesy to those who endured the stress of the unknown.  However, once full production began, a notice was sent out advising that orders would be shipped as produced according to the order queue and that if anyone was unwilling to endure the wait, they had a final opportunity to cancel.  Customers were required to positively confirm their desire to remain in the order queue and accept the order terms.
Pre-Order terms for new orders were updated on the website on April 1, 2013.  The terms state, "I accept the terms of the sale and understand that all sales are final and there is a backlog of orders and production & delivery of my order may take 2 months or longer."
As a Wyoming Corporation, we operate under the US Federal Trade Commission's business guide for mail or telephone ordered merchandise.  The relevant guideline suggests that if no delivery terms are stated or agreed to, then 30 days should be assumed.  In our case, we've gone to great length to ensure there is no ambiguity.  Customers are/were notified of the back order situation, the inability to cancel their order and the multi month wait to be expected. However, we have added a new feature to your account dashboard. You have the option of selling your order. There are more details and instructions on how to do so on our facebook page.
Announcing a Pre-Order Marketplace

Butterfly Labs is excited to announce a platform that will help merge the needs of both parties. A seller will be able to announce the sale of their pre-order position in our classifieds forum. They will establish the terms of sale and make the deal on their own. Once a deal has been made, they will use the transfer system in their account Dashboard to transfer an order to a new owner. When both parties verify and agree to the terms, the order will be moved to the buyer's account.

The order transfer system was set in place September 10, 2013.Butterfly Labs will only provide the platform for the order transfer to take place. We are not responsible for any deals made between our customers. Use of the order transfer system is solely the risk of the parties making the order transfer deal. Buyer's must agree to the original terms of the sale, and specifically to the no refund policy.
Here is the relevant FTC guideline text:
"when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days."

Kindest Regards,
Tamika
Butterfly Labs

Last I checked, isn't BFL located in Kansas?  Or is BFL so clueless to as which state they're operating in?  Did Tamika just explain to me that BFL is violating Federal Trade Commision guideline?  I've waited way more than 30 days.  Anyhow, att this point, I still haven't received a response/refund from PayPal.  I gave BFL a shot but already knew their answer.  I'm going to let them ship whatever they want to ship to me and reject the package.  If they still feel they are entitled to keep my money after I reject the shipments, then I'll give my attorney a call.

[-Redacted-]

Most companies incorporate in Nevada or Delaware.  BFL was registered as a Missouri company, but just recently folded that up.  Now they're a Wyoming corporation doing business in Kansas.  They get tax breaks that way...

[donch]

Just received an email from BFL regarding my refund.

While we reserve the right to handle refund requests on a case by case basis, pre-ordered products are non-refundable as is clearly stated at the time of purchase.  The reason for this is that pre-order funds are used in the build process which makes it impractical to reverse.  It's also been observed that some small number of customers have placed orders as part of a bitcoin price hedging strategy which involves multiple requests to cancel and then re-enstate their orders as market conditions change.  This has created an enormous customer service burden which is resolved by enforcing the all sales final policy.
Some customers have asked why we've given order cancellation refunds to others, but they can't get one.  The answer is that we had opted to process order cancellation requests during our long product development phase as a courtesy to those who endured the stress of the unknown.  However, once full production began, a notice was sent out advising that orders would be shipped as produced according to the order queue and that if anyone was unwilling to endure the wait, they had a final opportunity to cancel.  Customers were required to positively confirm their desire to remain in the order queue and accept the order terms.
Pre-Order terms for new orders were updated on the website on April 1, 2013.  The terms state, "I accept the terms of the sale and understand that all sales are final and there is a backlog of orders and production & delivery of my order may take 2 months or longer."
As a Wyoming Corporation, we operate under the US Federal Trade Commission's business guide for mail or telephone ordered merchandise.  The relevant guideline suggests that if no delivery terms are stated or agreed to, then 30 days should be assumed.  In our case, we've gone to great length to ensure there is no ambiguity.  Customers are/were notified of the back order situation, the inability to cancel their order and the multi month wait to be expected. However, we have added a new feature to your account dashboard. You have the option of selling your order. There are more details and instructions on how to do so on our facebook page.
Announcing a Pre-Order Marketplace

Butterfly Labs is excited to announce a platform that will help merge the needs of both parties. A seller will be able to announce the sale of their pre-order position in our classifieds forum. They will establish the terms of sale and make the deal on their own. Once a deal has been made, they will use the transfer system in their account Dashboard to transfer an order to a new owner. When both parties verify and agree to the terms, the order will be moved to the buyer's account.

The order transfer system was set in place September 10, 2013.Butterfly Labs will only provide the platform for the order transfer to take place. We are not responsible for any deals made between our customers. Use of the order transfer system is solely the risk of the parties making the order transfer deal. Buyer's must agree to the original terms of the sale, and specifically to the no refund policy.
Here is the relevant FTC guideline text:
"when you advertise merchandise, you must have a reasonable basis for stating or implying that you can ship within a certain time. If you make no shipment statement, you must have a reasonable basis for believing that you can ship within 30 days."

Kindest Regards,
Tamika
Butterfly Labs

Last I checked, isn't BFL located in Kansas?  Or is BFL so clueless to as which state they're operating in?  Did Tamika just explain to me that BFL is violating Federal Trade Commision guideline?  I've waited way more than 30 days.  Anyhow, att this point, I still haven't received a response/refund from PayPal.  I gave BFL a shot but already knew their answer.  I'm going to let them ship whatever they want to ship to me and reject the package.  If they still feel they are entitled to keep my money after I reject the shipments, then I'll give my attorney a call.

This is obviously the new line: "customers who want refunds are hedging their bets". Josh posts in the "other" forum today:

We did exactly what you stated. We offered refunds the entire time our products were delayed. We stopped offering refunds after our products were no longer delayed and we were shipping the products. Everyone had the opportunity to cancel their orders whenever they wished prior to us beginning the mass manufacture, production and shipping of product. I'm sorry, but we simply can not not be a hedge for your bitcoin speculation.

The products are still delayed today. We don't know if most customers have received their products 5 months after their last opportunity to get a refund on May 1st, because no one knows the distribution of their orders and they certainly haven't made much progress with the higher hash rates product lines. BFL are happy to rely on their customers as a "hedge" for their over-selling, late delivery and catalogue of fuck-ups. The money that has sat in their bank account for over a year has been a reliable insurance to ensure they can take as long as they want to.

It makes be laugh the amount of different lines that Josh has spun since mid 2012 to explain BFL's terrible policies and incompetence. This one takes the biscuit. He doesn't know what "sorry" means.

[donch]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)



  

[Phinnaeus Gage]

Most companies incorporate in Nevada or Delaware.  BFL was registered as a Missouri company, but just recently folded that up.  Now they're a Wyoming corporation doing business in Kansas.  They get tax breaks that way...

https://www.kansas.gov/bess/flow/main?execution=e1s5

http://www.sos.ks.gov/CM_ServiceWM/displaydocuments.aspx?DocID=03331329

[Keyser Soze]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

[Phinnaeus Gage]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

I wonder how many people hedged their investment by selling their pre-order via whatever means, then turned around and somehow got a refund for the order, still unbeknown to the person awaiting their miner. The original pre-orderer can stall for a long time--prior to going dark--by claiming there's some sort of snafu over at Camp BFL, and will ship as soon as received themselves, going as far as stating that they'll even toss them a bone of some sort.

[PuertoLibre]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

I do believe it has already happened.

I wonder how many people hedged their investment by selling their pre-order via whatever means, then turned around and somehow got a refund for the order, still unbeknown to the person awaiting their miner. The original pre-orderer can stall for a long time--prior to going dark--by claiming there's some sort of snafu over at Camp BFL, and will ship as soon as received themselves, going as far as stating that they'll even toss them a bone of some sort.

[PuertoLibre]

"Should you have a PayPal problem that needs decision making authority, these are the persons you can contact directly. Each one of these persons has the power to review your account, unlimit your account or arrange for your money to be returned to you.

PayPal Office of Executive Escalations:

1-402-935-2269 (Michelle, Executive Escalations)

1-402-935-2116 (Elizabeth Morey, Supervisor, Executive Escalations)

1-402-935-2172 (Adam Braasch, Senior Agent)

1-402-935-2268 (Beth Beutler, Senior Agent)

1-402-935-2174 (Jackie Hart, Senior Agent)

1-402-952-8951 (Michael Lazure, Senior Agent)

1-402-935-5073 (Stephanie Mikovec, Senior Agent)

1-402-935-2331 (Tara Stevens, Senior Agent)"

Only Tara, Adam and Michael worked for me. Hopefully something good comes out of those phone calls.

Thanks

What did they say to you? What was their tone and what did you say to them?

[LittleD]

"Should you have a PayPal problem that needs decision making authority, these are the persons you can contact directly. Each one of these persons has the power to review your account, unlimit your account or arrange for your money to be returned to you.

PayPal Office of Executive Escalations:

1-402-935-2269 (Michelle, Executive Escalations)

1-402-935-2116 (Elizabeth Morey, Supervisor, Executive Escalations)

1-402-935-2172 (Adam Braasch, Senior Agent)

1-402-935-2268 (Beth Beutler, Senior Agent)

1-402-935-2174 (Jackie Hart, Senior Agent)

1-402-952-8951 (Michael Lazure, Senior Agent)

1-402-935-5073 (Stephanie Mikovec, Senior Agent)

1-402-935-2331 (Tara Stevens, Senior Agent)"

Only Tara, Adam and Michael worked for me. Hopefully something good comes out of those phone calls.

Thanks

What did they say to you? What was their tone and what did you say to them?

Thanks youuuuuuuuuuuuuuuuuuuuuu~~~~~~~~~~~~~!!!!!!!!!

[BKM]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

I wonder how many people hedged their investment by selling their pre-order via whatever means, then turned around and somehow got a refund for the order, still unbeknown to the person awaiting their miner. The original pre-orderer can stall for a long time--prior to going dark--by claiming there's some sort of snafu over at Camp BFL, and will ship as soon as received themselves, going as far as stating that they'll even toss them a bone of some sort.

As someone who attempted to sell my preorders I can assure you there is virtually no market for them. In hand gear is different as people appear to be irrational in their valuation of it. If I had in hand gear I would instantly put it up for sale on bitmit. Given that I possess only preorders ATM I elected to charge it back.

Furthermore, I find it amusing for BFL or any of their erstwhile representatives to suggest that a customer is at fault for pursuing a legally available option to terminate a transaction. After all, BFL voluntarily made this option available by accepting paypal and credit card purchases. It was their choice to do so and their surprise at the consequence of that choice provides further insight into their iterative approach to their "business".

[DefectiveNu]

This is me hopping on the failboat

From: executiveoffice@paypal.com
Subject: Your PayPal Account ? Case(s) PP-x, PP-x (x) :ppNA

Dear Mr. [ x ],
 
Thank you for reaching out to PayPal for assistance regarding your dispute with Butterfly Labs.
 
After a thorough review of your claim, we have determined we cannot continue with this investigation because your complaint was filed 45 or more days after the original transaction date.
 
In order to prevent a similar issue in the future, you are able to learn more about how we investigate transaction problems by clicking “Legal Agreements” at the bottom of any PayPal page, then click “PayPal User Agreement.”
 
You can find additional information and tips about buying and selling safely on our Business Resource Center at https://www.paypal-businesscenter.com/manage-your-business.
 
You are valued customer and we are sorry we were not able to meet your needs.
 
Thank you for your patience and cooperation regarding this matter.
 
Sincerely,
PayPal

I had initially sent them a modified version of that formletter that appears on bflrefund.me
My real fuckup was probably when I waited to hear back from BFL regarding my refund request before raising it with PayPal (I didn't want to be lying when I said they denied a refund, even though I knew they would... didn't think I'd get rejected from PP though)

My PayPal order was paid for with a bank transfer (ACH I'm assuming) should I get in contact with my bank?  I'm thinking of contacting PP again asking why they've changed their minds today.

[chadtn]

I sent my e-mail on 09/19/2013 and just got the same response as below on 09/26/2013.  I guess the magic e-mail addresses aren't working anymore.  heh..

Chad

This is me hopping on the failboat

From: executiveoffice@paypal.com
Subject: Your PayPal Account ? Case(s) PP-x, PP-x (x) :ppNA

Dear Mr. [ x ],
 
Thank you for reaching out to PayPal for assistance regarding your dispute with Butterfly Labs.
 
After a thorough review of your claim, we have determined we cannot continue with this investigation because your complaint was filed 45 or more days after the original transaction date.
 
In order to prevent a similar issue in the future, you are able to learn more about how we investigate transaction problems by clicking “Legal Agreements” at the bottom of any PayPal page, then click “PayPal User Agreement.”
 
You can find additional information and tips about buying and selling safely on our Business Resource Center at https://www.paypal-businesscenter.com/manage-your-business.
 
You are valued customer and we are sorry we were not able to meet your needs.
 
Thank you for your patience and cooperation regarding this matter.
 
Sincerely,
PayPal

I had initially sent them a modified version of that formletter that appears on bflrefund.me
My real fuckup was probably when I waited to hear back from BFL regarding my refund request before raising it with PayPal (I didn't want to be lying when I said they denied a refund, even though I knew they would... didn't think I'd get rejected from PP though)

My PayPal order was paid for with a bank transfer (ACH I'm assuming) should I get in contact with my bank?  I'm thinking of contacting PP again asking why they've changed their minds today.

[bcp19]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

Not really, if you ordered in early June and got refunded around July 6th in BTC and then re-ordered a week or so later, you'd still have an order and a fair amount of BTC.

[donch]

So annoyed by Josh's bullshit. He doesn't even know what a hedge is. You invest in something and you reduce the risk of that investment by betting that the value might go down by purchasing another financial instrument. ie. you buy two things. Typically you'd invest in an equity and then put a short option on the same equity, so that you minimise your losses either way.

If I was hedging on the bitcoin price I'd buy Bitcoins and also buy an option on the price going down. In what way is putting my money into BFL's bank account for a year reducing my risk on the movement of the price of bitcoin? If I get a refund I still haven't made any money on Bitcoin because I didn't have any Bitcoin because BFL had my money!!!

Josh is a stupid asshole who thinks he's cleverer than he is. It's annoying me that he is annoying me :-)

The only "hedging" that could be done would have the same effect as selling bitcoin at the time the order is placed and buying them back later when you requested a refund. This would only apply if you are paying in bitcoin. If people were actually placing orders to do this I would be surprised as you could have the same result by trading on an exchange.

Not really, if you ordered in early June and got refunded around July 6th in BTC and then re-ordered a week or so later, you'd still have an order and a fair amount of BTC.

I can't believe the way you try to find ways of defending logic like this. It's hard to know for certain the time period for when most BFL orders were placed but I'm betting the bulk of them took place in 2012, given the time it has taken to ship the orders for that period. The logic that people paid fiat or BTC in 2012 to "hedge" against the price of Bitcoin between then and September 2013 is ludicrous. Another point is that you would only "hedge" if you had certainty of the delivery date, which is completely not the case with BFL. All future and option contracts have expiry/maturity dates, as anyone who knows anything about financial markets would know.

The real story is that BFL knew how much hash rate they had sold at any point. At a point in time during their preorder period they must have known that their order book would make subsequent orders not a worthwhile investment. Obviously this depends on the exchange rate which peaked in April, which would have altered the calculation, but even then, as we are seeing now, this threshold was greatly surpassed.

BFL were greedy, oversold what they could produce, sold goods they knew would not be useful to their customers and because of their delays, reduced potential and future returns due to the emergence of competitors who could deliver before them. They deliberately withheld their order book and chose to lock customers in on May 1st knowing this dissatisfaction would occur.

BCP19, you are a cheerleader for BFL. Can I ask why?

[donch]

Not really, if you ordered in early June and got refunded around July 6th in BTC and then re-ordered a week or so later, you'd still have an order and a fair amount of BTC.

If this was actually happening, i.e. customers who cycled refunds, it would have been very easy to spot the offenders and refuse new orders to the ones playing the system. A blanket ban on refunds because of this hypothetical scenario is just ludicrous. I bet it never happened and is just another smokescreen excuse. Refunds mean less revenue, BFL's singular concern.

The contrast is KNC who have limited orders to batches and at least offered some commitment not to oversell before their customers have had a chance to mine some coins. The other good example is Hashfast who have opened up their order book. These are good practices and will no doubt ensure repeat custom to those companies.

[donch]

I wonder how many people hedged their investment by selling their pre-order via whatever means, then turned around and somehow got a refund for the order, still unbeknown to the person awaiting their miner. The original pre-orderer can stall for a long time--prior to going dark--by claiming there's some sort of snafu over at Camp BFL, and will ship as soon as received themselves, going as far as stating that they'll even toss them a bone of some sort.

This scenario isn't "hedging", it's fraud. Anyone who did this is criminal. However, the concept of creating a secondary market for preorders on a forum is a stupid idea in the first place, only created as a means of keeping the order book full, rather than allowing refunds.

BFL have tried so many different schemes: future order vouchers, chip credits, preorder re-sales, Monarch transfers. The list goes on. The correct strategy (Josh's job description apparently) would have been to offer refunds and do just-in-time delivery on their components so that they would not ever be in a situation where a large chunk of refunds would cripple them. It's called the Toyota method or lean manufacturing and successful production lines around the world aspire to it:

http://en.wikipedia.org/wiki/Lean_manufacturing

If your described scenario ever did occur the moral thing to do would be for BFL to cover the defrauded purchaser's loss. I bet you they would not do that, in the eventuality. Josh's "strategy" boils down to avoiding all risk to BFL at any cost.

My sneaking suspicion is that BFL shafted themselves by trying to fit their boards into snazzy looking cases which were totally inadequate to deal with the heat production of their chips. The wastage and therefore reduced profit on each order as a result of this meant that they had to sell at a higher price point and lock in existing orders. KNC identified this simple error at the very start of their production process.