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victoriatodorova
Community Member

Client requests an Escrow Refund

Hey there,

 

I have been working with a client who already paid me 100USD for the work I have done. Currently, in the Escrow there is a sum of 6OUSD and the client requested me to refund it, saying I should 'release' this 60USD. I am confused about what I have to do. Whom does this 60USD go to? Is this a normal procedure? I would really appreciate a reply.

 

Thank you in advance

28 REPLIES 28
petra_r
Community Member


Victoria T wrote:

I have been working with a client who already paid me 100USD for the work I have done. Currently, in the Escrow there is a sum of 6OUSD and the client requested me to refund it, saying I should 'release' this 60USD. I am confused about what I have to do. Whom does this 60USD go to? Is this a normal procedure? I would really appreciate a reply.


How much did you agree for the work done? $ 100 or $ 160?

If you agreed $ 100 and were paid $ 100, agree to the request to return the $ 60 escrow funds. They will go back to the client.

 

If you agreed $ 160 and were paid $ 100, but have done $ 160 worth of work, don't agree to the request to return the $ 60 escrow funds. They will then not go back to the client.

 

So in other words, if you have been paid in full for what you've done, approve the request. If you have not been paid in full for what you've done, talk to the client and try to avoid having to dispute.

 

 

wlyonsatl
Community Member

VictoriaT,

 

If you have done all the work as orginally agreed you should not accept payment less than the full amount agreed to. The client should "release" to you the remaining amount in escrow.

 

If you have done $160 worth of work and only used the "Submit" button on the Upwork project page to request $100, use that same button immediately to submit work for the remaining $60 in escrow. The client will then have 14 days to object to the release of the final $60 to you.

 

If you do not do this, the client could cancel the project and the $60 will automatically be returned to the client. If that happens, you will have no recourse through Upwork to get paid that $60.


Will L wrote:

 

If you have done $160 worth of work and only used the "Submit" button on the Upwork project page to request $100, use that same button immediately to submit work for the remaining $60 in escrow. The client will then have 14 days to object to the release of the final $60 to you.

 


That would not be possible even if the contract was still open.The client has already paid her the $100. 

 

Also, Once the contract has been closed, there is no way to request anything.

So, Petra, you are recommending she not formally submit work for the final $60 due to her?

 

If the client cancels the project before that, Upwork will take no interest in resolving any resulting dispute.

 

At least if she submits for the final $60 Upwork can consider a dispute, if the client objects to the payment and it comes to that.

 

If avoiding a dispute, rather than getting paid in full, is the freelancer's goal then she might as well agree to a refund of the remaining $60 in escrow.


Will L wrote:

So, Petra, you are recommending she not formally submit work for the final $60 due to her?


She can't formally submit anything on a closed contract.

 


Will L wrote:

If the client cancels the project before that, Upwork will take no interest in resolving any resulting dispute.


The contract is closed and we haven't even establised if she is owed the remaining $ 60 or not.

It does not matter whether the contract is closed or not, as long as there are funds in Escrow, the ability to dispute the return of the Escrow funds is exactly the same. It is plain false to say that Upwork would "take no interest" - the dispute process is exactly the same.

 


Will L wrote:

At least if she submits for the final $60 Upwork can consider a dispute, if the client objects to the payment and it comes to that.


Rejecting the request to return the Escrow funds initiates the dispute. That's how (almost all fixed rate with funds in escrow) disputes are initiated: The client closing the contract and requesting the return of the escrow funds. Then the freelancer either accepts the request (client gets the money back) or rejects it (which initiates dispute mediation)

 


Will L wrote:

If avoiding a dispute, rather than getting paid in full, is the freelancer's goal then she might as well agree to a refund of the remaining $60 in escrow.


I am not actually sure we know what is going on. She was paid and the contract is closed and positive feedback was exchanged, she may or may not be owed the $ 60. 

 

That's why I asked how much she should have been paid altogether. If she has been paid what she was due she should simply agree to the request.

If she is owed those $ 60, she should talk to the client to see why she isn't being paid and consider disputing the return of the Escrow funds.

 

Petra, I won't clog up the board repeating all you have said, but where in this thread did the freelancer indicate the project is already closed?

 

She said, "I have been working with...", which implies the project is still ongoing.

 

If she had said, "I completed a project with..." that would be a different story.


Will L wrote:

Petra, I won't clog up the board repeating all you have said, but where in this thread did the freelancer indicate the project is already closed?


There is no function with which a client can request a return of Escrow funds on an open contract without closing it. There is no way a freelancer can return excrow funds on an open contract. That means the contract must be closed or the return of escrow funds wouldn't be possibe anyway.


The contract is showing as closed with 5 star feedback exchanged on her profile.

She stated that she was paid $ 100. There is ony one contract on her profile, and it's for $ 100. 

 

Really, the only question is whether she is owed the $ 60 or not. If she was not paid in full she should talk to the client to resolve it and possibly consider rejecting the request to initite a dispute, if she was paid in full, she should approve the return request.

 

Petra,

 

In regards to dispute resolution, what happens if either the client or the freelancer does not agree to the recommended resolution of a dispute by Upwork's mediator and neither the client nor the freelancer agrees to go to arbitration?


Will L wrote:

Petra,

 

In regards to dispute resolution, what happens if either the client or the freelancer does not agree to the recommended resolution of a dispute by Upwork's mediator and neither the client nor the freelancer agrees to go to arbitration?


I can answer this one because I've been in this situation where it looked like it was about to happen on the phone call. If neither agree, the mediator will ask the freelancer to pay arbitration. If the freelancer doesn't, then the money goes back to the client and the case is closed.

Thanks for jumping in with your own experience, Jennifer M.

 

Touch wood, after 259 projects I have had only three disputes, two of which I "won" outright and one of which we agreed to split the difference involving a small amount of money at stake. None went to arbitration. 

 

My dirth of disputes may be partly due to the fact I very rarely do fixed rate projects and disputes under hourly contracts appear to be more cut-and-dried with less judgment needed from an Upwork mediator.


Will L wrote:

Thanks for jumping in with your own experience, Jennifer M.

 

Touch wood, after 259 projects I have had only three disputes, two of which I "won" outright and one of which we agreed to split the difference involving a small amount of money at stake. None went to arbitration. 

 

My dirth of disputes may be partly due to the fact I very rarely do fixed rate projects and disputes under hourly contracts appear to be more cut-and-dried with less judgment needed from an Upwork mediator.


I might be jinxing myself, but I have never had someone dispute my hours. Not that it would matter since I use Tracker, but still you have to go through the hassle of someone analyzing your work diary. 

The only time I remember my TimeTracker-tracked hours being disputed was when a client's credit card stopped working and Upwork reviewed my hours to see if they could claw back some payments Upwork had made to me that would not be funded by the client.

 

The resulting (relatively small) "disputed" amount of some of the time I had booked on the project was taken out of my account without warning and I was subsequently told by Upwork that no detailed accounting of the "disputed" work time would be provided to me, In other words, there really was no "dispute" - Upwork made its decision and that was that.

 

Oddly, the client subsequently replaced the credit card with an approved new method of payment but Upwork never charged that new method for the "disputed" time booked that the client never disputed. 

 

(S)he who has the gold makes the rules.

 

 


Will L wrote:

 

My dirth of disputes may be partly due to the fact I very rarely do fixed rate projects and disputes under hourly contracts appear to be more cut-and-dried with less judgment needed from an Upwork mediator.


Upwork mediators are never required to exercise "judgment" about the substance of a dispute; as employees and representatives of an escrow agent, they are legally prohibited from judging anything beyond the narrow scope of verifying that both buyer and seller have agreed that the terms of escrow have been met. 

[edited for clarity:] Your earlier reference to the "Upwork mediator or arbitrator" is, perhaps inadvertently, misleading. Upwork has no arbitrators, nor can it. Arbitration is provided by a third-party service, which is why it costs money, a third of which is fronted by Upwork.


Will L wrote:

Thanks for jumping in with your own experience, Jennifer M.

 

Touch wood, after 259 projects I have had only three disputes, two of which I "won" outright and one of which we agreed to split the difference involving a small amount of money at stake. None went to arbitration. 

 

My dirth of disputes may be partly due to the fact I very rarely do fixed rate projects and disputes under hourly contracts appear to be more cut-and-dried with less judgment needed from an Upwork mediator.


This is why it puzzles me so that you seem to feel so comfortable advising other FLs who encounter disputes and potential disputes on fixed-rate projects. Your understanding that UW mediators deploy judgement in these matters is ample evidence that you are not familiar with the process. 

 

Sorry if anything I said is puzzling for you, Phyllis.

 

That was not my intention.

And, Petra, you will have no doubt noticed Upwork's own description of the escrow refund process...

 

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

 

...begins with, "If you are ending a fixed-price contract and there are remaining funds in escrow that are no longer required for the project..."

 

It is a lot easier for a client to claim escrowed funds "are no longer required" if the freelancer has not requested their release due to the agreed work product being formally submitted to the client.

 

Freelancers should sometimes submit work via the "Submit" button once a miltestone's work is substantially complete, noting to the client what minor elements remain to be completed. If a freelancer submits a completed milestone without using the "Submit" button, I expect (but have no way to know in every case) it will be easier for the client to close the project and successfully request a refund of amounts still in escrow.

 

 

 


Will L wrote:

And, Petra, you will have no doubt noticed Upwork's own description of the escrow refund process


I am familiar with it.

 


Will L wrote:

It is a lot easier for a client to claim escrowed funds "are no longer required" if the freelancer has not requested their release due to the agreed work product being formally submitted to the client.


As Upwork mediation doesn't decide the dispute, it makes no difference. 

 

As for the idea of requesting payment without the milestone being done in full, maybe that works for you, I would never request payment for work that isn't complete because it gives the client a surefire reason to click on "Request Changes" and would look very odd in a dispute or arbitration. The "request funds" function is there to hand over everything for that milestone in order to get paid in full for that milestone.

 


Will L wrote:

I expect (but have no way to know in every case) it will be easier for the client to close the project and successfully request a refund of amounts still in escrow.


It wouldn't. Any dispute (and arbitration, should it come to that) would focus on whether the work was done according to spec or not.

A client's ability to request a return of escrow funds successfully is always dependant on the freelancer agreeing to the request (or ignoring it.) If the freelancer denies the request, the dispute process is the same.

 

Coming back to Victoria's case, it would have been the client who closed the (indisputably closed) contract, as there would not be a request for the return of the escrow funds had Victoria closed it (when the freelancer closes a contract, any funds left in escrow are automatically sent back to the client. No request to return them is generated)

 

So we're back to the question of whether she feels she is owed the $ 60 or not, which will determine what she should do next. That's really all that matters.



Each freelancer must decide on how they will approach some of those issues, so opinions will no doubt vary without more guidance from Upwork on how its policies are applied.

 

I think it is easier for a client to claim escrowed funds are no longer needed when the freelancer has not formally submitted work under the milestone related to those funds, but there are no doubt other considerations the Upwork mediator or abitrator could take into account.

 

Now, as one of the board's experts on Upwork's policies, how is a dispute resolved if the client and/or the freelancer do not agree to the Upwork mediator's recommended resolution and neither client nor freelancer agrees to pay for arbitration?

wlyonsatl
Community Member

Victoria T.

 

Have you formally submitted work to request release of the remaining $60 in escrow to you?

 

Have you or the client subsequently closed the project?

 


Will L wrote:

Victoria T.

 

Have you formally submitted work to request release of the remaining $60 in escrow to you?

 

Have you or the client subsequently closed the project?

 


The OP doesn't say whether she even worked on the second milestone. It sounds like Petra and Jennifer are better positioned to advise her on this.

Or maybe, Christine, you could provide useful advice to the original poster, now that you're here.


Will L wrote:

Or maybe, Christine, you could provide useful advice to the original poster, now that you're here.


I wish that I could, but I have no experience with clients asking for refunds or initiating disputes, so I think it's best if I don't hijack this thread and confuse the OP.


Will L wrote:

Or maybe, Christine, you could provide useful advice to the original poster, now that you're here.


The OP has had all the advice she needs (and some that is just plain wrong) so there is really no need for anything else.

colettelewis
Community Member


Victoria T wrote:

Hey there,

 

I have been working with a client who already paid me 100USD for the work I have done. Currently, in the Escrow there is a sum of 6OUSD and the client requested me to refund it, saying I should 'release' this 60USD. I am confused about what I have to do. Whom does this 60USD go to? Is this a normal procedure? I would really appreciate a reply.

 

Thank you in advance


______________________________

Victoria,

 

Re your question: The only posts you need to read and the only person you need to listen to is Petra. She knows the system inside out and will not muddy the waters with incorrect advice. 

So, Nichola, do you share Christine's belief that only a person who has personally gone through the refund process on a fixed rate project should respond to requests from other freelancers' for opinions and feedback on refund problems related to fixed rate projects?

 

 

I think, Will, those of us who have found fault with your hijacking this thread are less concerned about your lack of experience and more concerned about your lack of relevant knowledge and your insistence nonetheless on going on at length about it. I believe you were the person who first raised your personal experience as being relevant.

Well, Douglas Michael M, I hope all of you are gentle with Petra the next time she weighs in here when other freelancers say they have a problem with refund requests on hourly projects.

 

She has said she has never had an hourly dispute, but I'd have to disagree with anyone who says she couldn't possibly have any useful knowledge or opinion on that subject.


Will L wrote:

Well, Douglas Michael M, I hope all of you are gentle with Petra the next time she weighs in here when other freelancers say they have a problem with refund requests on hourly projects.

 

She has said she has never had an hourly dispute, but I'd have to disagree with anyone who says she couldn't possibly have any useful knowledge or opinion on that subject.


__________________________________

This thread is not about hourly disputes. It is about a new freelancer who wanted help on a possible refund on a fixed-price job. Petra did not "weigh" in, she answered the OP with the correct advice.  

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