Client asked for refund

[ansabimam24]

Hello everyone! We had a contract where I had to redesign a website on wix. I did exactly what the client asked for and delivered on time. Just at the last moment, without even telling me, the client changed the colors of the button and told me that he has done the changes himself and wanted me to give a refund. I opened a dispute with upwork. The project was for $130 and in the dispute he is willing to give me only $30. Plus, because of his bad review, my top rated badge was removed. I am totally unsatisfied with the upwork representative. Now, I have two options, either I accept the $30 or if not, all the funds will be give back to the client. What shoudl I do now?

[elinkus]

I don't think there's anything you can do. Upwork highly favors clients, which is unfortunate. They will just tell you that you need to turn on time tracking if you want to be guaranteed payment. You could try to negotiate with the client and say that you will split the difference.... although I think the only way to do this is via messages.... I think that Upwork should add this functionality to the "Refund" process. 

[joansands]

Ansab - Did you have an hourly contract or was it fixed? You do not have to give a refund just because a client asks for one. But you will only get paid if you are protected by Upwork. For instance, with an hourly contract, you need to have used the time tracker with appropriate memos, etc.

[petra_r]

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Ansab I wrote:

 Now, I have two options, either I accept the $30 or if not, all the funds will be give back to the client. 

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This is not entirely true, You have also the option to opt for arbitration,

If this had been an hourly contract, it would be decided purely on whether the hours were tracked according to the terms of the protection and there would be no funds to go anywhere as such.

[aaronph]

From my understanding, the arbitration fee should way exceed the money he gains (if he wins) in this case. 
I heard about a similar case from my own community with a little more budget than this case.
I think freelancers, especially new ones, would just put the case down as they'd think it is not worth it to lose even more (they have already lost time, money, and energy into that trouble). Personally, I would not follow the case either, considering it's not worth the investment of time and energy. 

I'm not sure if this might be a "loophole" Upwork unintentionally creates for dishonest business practices of some certain people? Or is it just how it should be, and freelancer better have their own safety measure to avoid that from happening? 

[petra_r · Accepted solution]

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Duc P wrote:

From my understanding, the arbitration fee should way exceed the money he gains (if he wins) in this case.

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True. So the freelancer gets to go first and pays the arbitration fee. The chance of the client paying the arbitration fee in that case is very slim. 

Result: Freelancer gets the arbitration fee back and the money in escrow...

[feed_my_eyes]

Duc P wrote:

From my understanding, the arbitration fee should way exceed the money he gains (if he wins) in this case.

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This is true, but it's also true for the client. If the client knows that the work was done to a good standard and they're just trying to get out of paying the freelancer, then chances are they'll back down because they know they'll lose. If they're too cheap to pay $100 to the freelancer, they won't want to pay $291 for arbitration.

[richard_wein]

The client gets their escrow back if there's no agreement and no arbitration. So the freelancer has the disadvantage that the burden is on him to pay for arbitration first. But this is also an advantage for the freelancer, who knows he will get his arbitration fee back if the client doesn't pay too. Once the freelancer has paid, the client knows that they will definitely not get their arbitration free back if they pay, so they are very unlikely to pay for arbitration if the amount in escrow is relatively small or they know they don't have a good case.

In a case like this I would definitely opt for arbitration. If Ansab simply doesn't have the $291 available, that's very unfortunate. The fact is that unless you are able and willing to pay for arbitration then you have no protection on fixed price contacts.

[aaronph]

Is there a chance if they just hate my guts and go for arbitration anyway? 
No seriously, this happened to my friend but not on Upwork- the local company didn't pay his last month's salary and challenged him on going to court. He did and won but all of the money paid to his lawyer and... it took 2 years with all that drama. 

I think it is true on the slim chance that they would go for arbitration knowing that they should lose, I have never fallen into such a situation but that case I mentioned from my network that client didn't pay for arbitration, unfortunately, the freelancer didn't follow it either-.

This is a very useful topic. 

[prestonhunter]

re: "Is there a chance if they just hate my guts and go for arbitration anyway?"

It is possible.

"Unlikely" does not mean "impossible."

re: "this happened to my friend but not on Upwork - the local company didn't pay his last month's salary and challenged him on going to court. He did and won but all of the money paid to his lawyer and... it took 2 years with all that drama."

Sorry that this happened to your friend.
That was a waste of time and energy.
The client ("the local company") acted immorally. But your friend did not really benefit by going to court.

I have a phrase to describe somebody on Upwork who owes me money for work I did over a month ago:

"Someone who does not owe me money."

[lysis10]

Good morning. I hate escrow jobs.

I just passed on one this week where I think the client might have been outsourcing and refused to go hourly. Someone else can have that headache. 

Also, if you don't have $300 to fight escrow reelase, you shouldn't be doing escrow jobs.