I'm confused about so many people being unable to get their money refunded. Are the credit card companies not crediting people back for some reason? Have people not contacted their card companies? Or did everyone pay by personal checks? When paying by credit card it is usually a simple procedure to get money credited when merchandise was not received. Even if you paid through paypal, I would think you could get funds returned, either directly through paypal or when you pay your paypal bill with a credit card.
You can take a business to small claims court to get a judgement against them. But you have to decide if the amount you're out is worth the trouble. I believe that you have to file the complaint in the district where the business exists (that might not be right though -- anyone interested in this route should confirm that). If that's not close by, then the travel costs might be more than the judgement, and it is unlikely that you would be awarded reimbursement for the travel costs. You need to pay a filing fee, which would be added to your judgement if you win, but will add to your costs if you lose. And even if you win the judgement, then you have to collect. Small claims court determines if someone owes you money and then tells them to pay it, but the court doesn't MAKE them pay it with that judgement. If they don't pay you voluntarily, then you have to go back to court and request a garnishment against their bank account (assumining there's anything to garnish). Some courts might order a garnishment at the same time as the judgement, but I don't think they do it normally, and you would almost certainly have to request it, and prove why it's necessary.