Re: Dispute process

1a131a5a · ‎06-19-2021

Hello everyone,

I'm having difficulty to understand the dispute process. The freelancer I hired was charging $20 per hour, but we agreed on a maximum amount of $200 for the job. I'm still not sure if it's escrow process or not. He did not complete the job. I was unable to request a refund (invoice dropdowns were blank). According to what I read, I needed to "End contract". So I did, and I chose "cancelled because freelancer was unable to complete job", but I did not see "Pay nothing and request a refund" or "Pay another amount" options. I reached out to UpWork but no one is responding.

Can someone advise if I followed the right process? and what's my next step?

Thank you,

Uriel

prestonhunter · ‎06-19-2021

I want to help you achieve your goals, so I am going to provide both some straight-up facts, along with some advise (based on my personal opinion) about how you can get what you want.

You will benefit if you understand more about the "nuts and bolts" of how things work on the Upwork platform.

There are two key points that you misunderstood:

- misunderstanding how refunds work

- misunderstanding the distinction between "fixed-price" versus "hourly" contracts

One of the most important things to undestand is that Upwork's intended use of the platform is this:

- Client hires freelancer to do work

- Freelancer does work

- Client's money goes to freelancer

There ARE ways to ask for refunds. You can read more about this topic here:

https://support.upwork.com/hc/en-us/articles/211062158-Dispute-an-Agency-or-Freelancer-s-Hours

https://support.upwork.com/hc/en-us/articles/211062058-Get-an-Escrow-Refund

But, ultimately: Refund thinking hurts clients. You will save time and money if you plan to NOT try to get money back from freelancers. What OFTEN happens is clients don't fully understand these "refund" possibilities, and they end up not getting as much money back as they thought they would, or they end up not getting any money back.

It is not Upwork's intention that money goes back from the freelancer to the client. It is true that there are some "safety valve" measures in place to handle certain rare and extreme circumstances. But it is always a gamble for a client to think that he might get some money back from a freelancer. It is much safer and easier if a client decides proactively that he will never try to get a refund back from a freelancer, and instead monitor monitor each freelancer's work proactively. The safter way to go is for a client to STOP paying a freelancer or never pay a freelancer money in the first place, rather than trying to get money back from a freelancer.

I will provide specific examples of the difference between "refund thinking" and more effective approaches to using Upwork, to help illustrate these points:

HOURLY CONTRACTS:

Mary hired a freelancer using an hourly contract. Mary thought that she could get a refund if everything didn't work out as she planned. The freelancer worked on the project for 4 weeks, billing a total of $2000. Then Mary realized that the freelance artist's style was not exactly right for the project. Mary asked Upwork for a refund for all of that work. Mary was only able to get a refund of $200 - which was for manually-logged time during one week previous to the time that Mary decided to dispute the freelancer's time.

Elizabeth hired a freelancer using an hourly contract. Elizabeth monitored the work carefully. She quickly realized that the freelance artist's style was completely wrong for the project! She closed the contract, after $40 had been billed. Elizabeth hired ANOTHER artist. That artist worked for 4 weeks, billing $2000. Elizabeth checked the work diary every day and could observe the artist's progress on the project. Elizabeth loved the style of art this freelancer submitted. She used it for her project.

FIXED-PRICE CONTRACTS:

Sam hired a freelancer to illustrate a children's book. He funded an escrow payment of $2000. When the artist submitted the work, Sam realized the style wasn't quite right for the project. Sam asked for a refund. The artist disputed Sam's request. Eventually this went to arbitration. Sam paid $291 for arbitration. The arbitrator decided that all $2000 should go to the artist. Sam paid a total of $2291 and ended up not using any of the freelancer's work.

Barry hired a freelancer to illustrate a children's book. Barry funded an escrow payment of $50 for the first page. When the artist submitted the work, Barry realized it wasn't quite right for the project. Barry felt bad that he lost $50, but he knew what he wanted for the art style and this freelancer's work just wasn't it. Barry hired a different freelancer, to illustrate the first page, for $50. Barry loved the second artist's work. Barry then did a second fixed-price milestsone of $100 for pages 2 and 3. Then another milestone for $200, then another milestone of $400, then $800, and then a final milestone for $450. The freelancer continued to deliver great work, and completed the project on-budget and on time.

emanuel_froes · ‎06-20-2022

i do especially appreciate your artist examples ! As I am artist, I believe these are the best way to show the worst cases haha

prestonhunter · ‎06-19-2021

Let's talk about the differences between "hourly" and "fixed-price" contracts.

re: "The freelancer I hired was charging $20 per hour, but we agreed on a maximum amount of $200 for the job."

An hourly contract means that you pay a freelancer for their time. If a freelancer works for 10 hours, then you pay a freelancer for 10 hours of work at the hourly rate attached to the contract.

So if you pay a freelancer, using a $20/hour contract, for 10 hours of work, that adds up to $200.

As a client, you can set a MAXIMUM NUMBER OF HOURS PER WEEK that a freelancer may work. You can set this to any integer. You can set it to zero (which is impractical, but doable). You can set it to 1 hour. You can set it so there is no limit.

But keep in mind that the maximum is reset at the beginning of each work week.

So if you hire a freelancer on Monday, and set the maximum to 10 hours, and then close the contract on Saturday, there IS NO WAY for a $20/hour freelancer to bill more than $200.

You, as a client, can do that, and have total control over the contract in a way that prevents more than $200 from being billed.

If the contract continues into the next week, then the freelancer can begin logging more time. That would mean the freelancer could theoretically bill MORE than $200 on the contract.

SOMETHING ELSE that you could do is to DISCUSS the total amount you want to spend with the freelancer. You could tell the freelancer that you want to spend no more than $200 on the project. Then the freelancer could voluntarily limit her billing to $200.

But such an arrangement is on the honor system. The Upwork user interface has no way for a client to specify that an hourly contract will bill - in total - no more than $200. And Upwork will not enforce or get involved in promises about this.

For example, if the freelancer said, in the Upwork Messages communication:

"I understand that you don't want to spend more than $200. I will finish this assignment without billing more than $200."

And then if the freelancer finished the assignment, but billed $400... No Upwork rules have been broken by the freelancer. The client has no basis for disputing the freelancer's billing. Upwork will take no action if the client "reports" what happened.

If a client wants to pay a specific, known price for a task, then the client uses a fixed-price contract.

You can't "mix and match" elements of hourly and fixed-price contracts. The Upwork user interface doesn't allow for that. Upwork policies mean that Upwork personnel don't enforce doing that. Such mixing is what I refer to as a "scheme." It rarely ends well.

re: "I'm still not sure if it's escrow process or not."

There is no escrow process associated with an hourly contract. Escrow isn't part of an hourly contract. It is only part of a fixed-price contract.

re: "He did not complete the job."

Upwork doesn't care if he "completed the job."

Completing a job is not part of an hourly contract.

With an hourly contract, a client pays for a freelancer's time, not for a specific deliverable.

re: "I was unable to request a refund (invoice dropdowns were blank). According to what I read, I needed to 'End contract'. So I did, and I chose 'cancelled because freelancer was unable to complete job', but I did not see 'Pay nothing and request a refund' or 'Pay another amount' options"

All of these things that you did not see... You did not see them because you hired the freelancer using an hourly contract, not a fixed-price contract.

re: "I reached out to Upwork but no one is responding."

You do not need to reach out to Upwork. They can't do anything about this. They can't tell you anything that we can't tell you here in the Community Forum.

At this point in time, reaching out to Upwork will provide you with no benefit whatsoever.

re: "Can someone advise if I followed the right process?"

As we discussed, there were some points that you misunderstood about how Upwork works.

re: "What's my next step?"

You have already taken the most important next step, which is that you asked for clarification and information about your situation. You have received that.

Your NEXT step is to carefully read the information that has been provided to you in this thread. And if you have any questions at all, ask follow-up questions.

There are no additional steps for you to take after that.

Theoretically, you can "request a refund," as described here:

https://support.upwork.com/hc/en-us/articles/211062088-Request-a-Refund

But my advice to you is to not request a refund in this particular situation. And, more importantly, my advice to you is to plan to never ask for a refund, no matter what. Because making that decision will save you money.

petra_r · ‎06-19-2021

Uriel R wrote:
The freelancer I hired was charging $20 per hour, but we agreed on a maximum amount of $200 for the job.

That's irrelevant. Hourly contracts are paid by how many hours the freelancer worked.

Uriel R wrote:
I'm still not sure if it's escrow process or not.

With hourly, there is no Escrow.

Uriel R wrote:
what's my next step?

Basically, if you were to dispute, Upwork will look at the freelancer's work diary. If the freelancer tracked their time with the Upwork app, had work memos and reasonable activity levels, the freelancer will win the dispute.

If not, you will win the dispute.

It's as simple as that.

You will be charged for any hours logged this current week on Monday. You then have until next Friday to dispute, but bear in mind that you can't win a dispute if the time has been correctly logged.