Client suggestion for payments

I just wanted to make a suggestion based on my recent experience with Upwork, and that is to delay the escrow payment for later in the contract negotiation process. I feel that the escrow payment is important for the process to run smoothly and ensure that freelancers are paid in a timely manner. However, currently Upword requires you to pay as soon as you offer to hire a freelancer, but there are a number of things that can happen prior to work commencing that will result in the contract being cancelled and the client being out of pocket for something that was not necessarily their fault.


This has happened to me. I posted a position and hired someone and paid the escrow payment. They declined the contract. So I hired another freelancer and paid again. This second freelancer accepted and then cancelled. So I had to hire a third person (fortunately third time is the charm and this person did a great job) and paid the escrow payment again. In all I had to pay for the job 3 times. Now it is 2 weeks later the job is complete, the freelancer is paid and I have still not been refunded for the first 2 payments that were made. I have been bounced between Paypal and Upwork with Paypal saying Upwork did not process the refunds correctly and Upwork is not really sure what happened. It has been very frustrating to say the least - not only with the hiring process, but with the resolution process as well.


In conclusion, to save more people this frustration the Upwork Help Desk Associate suggested I post this information here so that it may be improved for the future.


While I can appreciate your frustration you could have difficulty hiring freelancers. If a client wants to hire for a fixed price of $1000 you can be sure that I won't start working until I see that the amount has been fully funded.


As the saying goes "Fool me once shame on you, fool twice shame on me." When I first started this online freelancing I did work for a client assuming that the full amount would be funded eventually. After the project was done he kept giving excuses as to why it wasn't funded. I kept telling him that I would only turn things over after the project was fully funded and the payment released (I demanded this because of the excuses). Eventually he stopped responding. He was probably trying to get something for free. While he didn't get the work fro free I wasted a good deal of time for nothing.


There are dishonest people out there (I'm not saying you are in that group) and it will make some freelancers think twice before working without seeing that they will get paid.

"Remember, no matter where you go, there you are."
Buckaroo Banzai



I respect that totally Vince. And I don't believe work should begin until the escrow is funded. However, what I am suggesting is that the escrow not be funded until ALL of the terms are agreed to by both parties and both parties have accepted the contract. At that point the client would pay the escrow and the freelancer would begin the work when that is done. As it stands now the client has to pay even though nothing has actually been agreed to and the hire is not official.

@Jennifer C wrote:



what I am suggesting is that the escrow not be funded until ALL of the terms are agreed to by both parties and both parties have accepted the contract. .

This is what the discussion prior to starting a contract is for.


You negotiate and discuss with the contractor, and when you're both on the same page you send the offer. What's complicated?

"Where darkness shines like dazzling light"   —William Ashbless

As far as I'm concerned nothing was complicated. I discussed the terms of the project with each freelancer, they were agreeable, I hired them, they backed out. Nothing changed from my end. And it was a very straight forward project.


I was merely suggesting that the escrow payment be made once the contract is officially agreed upon rather than operating on (and paying for) the assumption that the person you have been positively communicating with will accept.




What Vince said.  You are not going to find freelancers willing to start work without escrow in place, for good (and obvious) reason.


That said, it sounds like Upwork needs to look at their processes of refunding monies in escrow back to the client in the scenarios you mentioned, and in a timely manner.

I agree with Vince. As I have stated previously, I am all for the escrow and having it funded before works begins. But I am simply suggesting that there has to be a commitment from the freelancer first. They should accept the position and the terms before the escrow is funded. From my prospective (and to use Vince's scenerio), if the contract was worth $1000 then I would have had to pay $3000 before it was even accepted. And if the third freelancer had not accepted? How long would it have gone on for? How much would I have to keep paying before I found someone? 

Honestly, I'd like to think that the scenario you went through doesn't happen often. Usually there's a few messages back and forth to work out the details of a project, and in my bids I always make it clear that I don't start work until escrow is funded, but that the client can contact me with any questions they might have. I don't know if what you experienced happens all that often.


Again, I think the problem lies with Upwork's handling of monies in escrow and wait periods. Freelancers have long waits to get paid as well.


There was discussion, as there always is, and I believed there was an understanding between us. I added nothing to the project - it was simple and straight forward and paid fairly well. None of this stopped the freelancer from rejecting the contract both stating they had taken on other work and no longer had the time to do my job. As they have a right to do, but this is not the first time this has happened to me. So I can assume it has happened to others.

I'm afraid it does happen more often. I have had the same. Fortunately I only lost $20 as it was a very small job. I try to avoid fixed priced jobs and just pay by the hour. That seems to work best. No work done, no payment.

What is it that clients do not understand? Escrow on fixed-rate payments is NOT an upfront payment to the freelancer.






I am a freelancer, but I don't expect a client to fund a milestone until after we have finished negotiating the requirements of the job and working out the details.  Once I have all the information I feel that I need to complete the job successfully, and the client is ready to begin, THEN we make it "official" with the payment verification process.  I will not submit my work without the funding in place.


Having said this, however, there was ONE time that I backed out of a contract after the client and I had followed all these steps.  He told me what he wanted, we agreed on the fee, and he funded the milestone.  THEN he said, "Oh, and I also need you to add X, Y, and Z to your work when you submit it.  Not only was his request serious scope creep as it was above and beyond what we had agreed upon so he clearly wanted the additions thrown in at no charge, but the request was outside my area of expertise (He wanted animated graphics added; I'm a WRITER)  As soon as he made the addition, I notified him that I did not do that type of work, and he changed his mind about hiring me.  I ended the contract and hit the "refund" button.  I assumed the money went right back to him.  It sounds like your funding did not revert to you in your situation, though.  I'm not sure what happened there.

Yes, I was going to address the issue of clients piling on more work than what was stipulated in the contract. But didn't feel like explaining that scenario as well.


Hoping a mod comes along to help the OP out.

Nothing changed and I didn't add anything to the project. I interviewed them, asked questions, and I believed we had a consensus. It was a simple project that paid well. Each freelancer backed out stating they had taken on other work and no longer had the time. Something I cannot predict or control but had to pay for.


Again, there are things that can go wrong on both sides. I am only suggesting a refinement that would alleviate this potential issue from happening again. Obviously the escrow payment was a refinement created to ensure freelancers got paid and it is a great solution. I was just suggesting that the payment be made after there is a formal agreement, but before the work has begun.

Community Manager
Community Manager

Hi Jennifer,


I'm sorry to hear a few freelancers weren't able to proceed with contracts they agreed to take on initially. We always advise that the client and the freelancer discuss all the terms and deadlines prior to sending the offer and make sure the freelancer is able to complete the work.

When a fixed-price offer is sent, the client's payment method is charged and the first milestone or the whole project is funded. It's done to make sure that the client and the freelancer can benefit from Upwork Fixed-Price Protection and the freelancer can start working right away. If for some reason the freelancer declines the offer, the money from Escrow is returned to the client.


It looks like in your case, the refunds to your PayPal account were processed on Upwork's end and the agent provided the reference numbers for those transactions. Please, communicate with PayPal customer support and show them the reference numbers so they could trace the money.

~ Valeria

I've never had a freelancer back out of a fixed price job. The closest I've come was when a freelancer, after seeing the job documents I attached to the offer, gave me a discount because it was repetitive. So there was money left over in escrow after all the milestones were complete, and they had to agree to refund it.


I understand your frustration, but like multiple freelancers have said, if the escrow isn't made until they accept the contract, they won't accept the contract because the escrow hasn't been made...it becomes a chicken and egg problem - what comes first, the escrow or the contract? You want the contract first, and the freelancers want the escrow first. Upwork does the escrow first, because they can always refund it if they need to.