Monday, August 1, 2016 [Tweets] [Favorites]

Kagi, RIP

Kagi:

It is with sadness that we announce Kagi has ceased operations as of July 31st, 2016.

[…]

Per the Kagi privacy policy, customer data connected to the purchase of a product is shared with the supplier of that product so that they can provide product support. The database of customer data will not be sold or transferred to a third party.

For the past ten years Kagi has been struggling to recover from financial losses due to a supplier fraud situation. We have reduced the debt but the recovery has failed and forced us to close.

I’ve bought tons of software through Kagi. They were pretty much synonymous with Mac shareware. I used them as a payment process for ATPM in the late 90s; this was not a good experience because we experienced payer fraud. I also used them as a backup payment processor for C-Command in the early 2000s; that went well, although configuring things in the store was a much more manual process than with the newer payment services.

See also: Eric Slivka, James Thomson, Ilja A. Iwas, Daniel Jalkut.

Update (2016-08-13): Adam C. Engst:

Over ten years ago, Kagi was looking to expand its business. In the process, they started handling subscriptions for a company selling a legal consulting service — the idea was that you’d pay a $29 monthly fee and be able to get answers to legal questions. The company was both legit and seemingly successful, and the service was real, but what Kagi missed in their due diligence was that the firm’s sales team used high-pressure sales tactics. As a result, many customers were unhappy, and to avoid further pressure when trying to cancel their subscriptions, they instead disputed the credit card charges, generating what Kee described as “an amazingly large number of chargebacks.”

[…]

After four months of refining the legal consulting company’s process to set customer expectations appropriately and improving the chargeback process, however, Kagi realized that the problems weren’t going to go away and dropped the company as a client.

The legal consulting company then reneged on its responsibility to repay Kagi for both the $25 chargebacks and the $29 subscriptions, leaving Kagi with a massive debt. That’s an unacceptable way to run a business, to say the least, but when Kagi eventually took the matter to arbitration and won, the settlement didn’t even pay for Kagi’s legal fees.

Jon Gotow:

As you may or may not know, I started with Kagi back in 1996, when getting shareware payments still often involved people mailing in checks.

I’m really sad to see this happen. Many of us owe a huge thanks to Kee for starting the service - if it weren’t for him, I don’t think I would have been able to quit my day job and turn St. Clair Software into a full-time business.

Peter N Lewis:

It’s a tragedy for all concerned. As Kagi’s first customer, I whole heartedly agree with Jon, I doubt very much whether I would have been able to spend the last twenty odd years in this business.

Before Kagi, I collected piles of US checks and cash and periodically sent to a US bank account. It was tedious and problematic to say the least, didn’t deal with tax issues, and couldn’t process credit cards.

CS:

I’ve dealt with businesses before that ended up going under, and they gave a warning a few weeks ahead of time so that I’d be able to get set up with a new company and have a smooth transition. Kagi did not do that. In addition to probably losing two whole months of sales, Kagi’s users are stuck with no store, and consequently no income, until a new store can be set up. As an additional insult to injury, we were not even given the opportunity to download our customer databases before they shredded the servers. It’s sad that Kagi wasn’t able to stay in business anymore, but does that really justify treating their longtime loyal customers this way?

Jim Dalrymple:

Wow, I remember using Kagi to purchase shareware for many years.

Brent Simmons:

Love and respect for Kagi. They were so great for so long.

Cédric Luthi:

I wrote “Kagi Registration Module (lack of) security” in 2008… Also, all the comments are worth reading.

1 Comment

Adam Engst of TidBITS has posted some further analysis based on conversation with Kee Nethery: http://tidbits.com/article/16665

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