I wanted to share my recent experience and hear from the community of Freelancers what they thought about this.
I have been a freelancer on Upwork for one year. Thus, I am fairly new with only 21 jobs completed. Last week, I accept a small job for a new client. For the first time since I've been on Upwork I noticed that the Milestone was only partially funded (50% of our agreed price was in escrow). Before the client created the Milestone, we had formally agreed on $45 for the task. When he created the Milestone, it read something like "Bugdet: 45 / In escrow: 22.5 / Remaining: 22.5". Honestly, I did not think twice about the fact that it was only partially funded. For some reason, it made complete sense to me. I assumed that the client was being "cautious" and did not want to put all his money in escrow with a new freelancer that he didn't know. And since I am a very serious and reliable freelancer, I just figured that the $45 would be released once the client reviewed my work and saw that it was serious work.
Fast-track to when I sent my finished work. Client received my work, was very happy with it and even complimented me. He wrote "This is perfect, I really appreciate your attention to detail! Thank you for turning this around quickly. Cheers! I'll likely have some more work for you soon". He approved the milestone and I only got paid $22.5. At that point I thought "WTF?!" but wrote him a very nice and polite message asking if he knew why only half of the money had been released. Instead of responding, he simply ended the contract without a word.
Right now, the job details read: "Budget: 45 / Paid: 22.5 / Remaining: 22.5"
I am so confused. What do you guys think about this? Isn't the client obligated the pay the full amount that was agreed upon and that is included in the contract as "Budget"? If this is a scam, isn't the client violating Upwork's T&C? Does he risk getting banned?
I have already escalated this but Upwork responded that they cannot guarantee that the client will send me the remaining funds. Upwork only offered to help me reach out to the client (which I appreciate).
I am also worried that the client will leave me a negative review in anticipation of MY upcoming negative review. I did everything by the book, and delivered quality work (which the client recognized). How easy is it to get a negative review deleted by Upwork if you've been scammed?
I don't even care about the $22.5. That was the price for a good lesson. Guys, never accept partially funded milestones...
Thank you, Preston. I understand your point. I will obviously never accept a partially-funded milestone from now on.
I just want to say that, as a newbie, how was I supposed to know? The client and I had agreed to $45 in writing and this was reflected on the contract.
Why is partial escrow a thing to begin with? Why does Upwork let clients do that?
How should you have known?
I don't know.
It is easy for veteran users to say "read the TOS," but if we are being honest... that would not have helped.
Lots of people learn by doing. That is real life.
You should not feel bad that you made an honest mistake.
LOTS of freelancers made the same mistake.
Look at this way: Losing $22 is better than losing $500. Most freelancers who make this mistake lose more than you did.
Thank you, Preston. I agree with you. Like I said, $22.5 was a good price for a lesson learned. I am just glad it wasn't a lot of money. I just wish Upwork didn't allow partial escrows (I still wonder what the point of a partial escrow is) so that new freelancers wouldn't fall for it.
> Guys, never accept partially funded milestones...
> I still wonder what the point of a partial escrow is
You can do work as much as the funded milestone and submit the (in your case) half-finished work with explanation.
Why does upwork allow this?
Because many contracts consist of many milestones. I have long-term clients, one of which I'm at milestone #64 with. It's convenient for the client to just add milestones on an ongoing contract, it is great for the freelancer to not have many small jobs, but fewer larger ones.
But I never work on an unfunded milestone, and I have declined new clients that wanted to split a small amount. I did that once in the beginning, never did it again.
Of course most clients are great and pay. Splitting a small amount is not a good start to a project. If you had used upwork correctly - submit half the work, wait for second milestone to be activated - the client probably would have paid you. You made it too easy for him to not pay you. Not saying it's not unethical, of course. And as you said, your feedback will reflect what happened.
Thank you for commenting, Martina. I understand why milestones exist. They are very useful. What I don't understand is why it is possible to only partially fund one specific milestone. Why only put 50% of one milestone in escrow? What you suggested - submitting only half the work if there's only half in escrow is perfectly sensible and I should have done that (rookie mistake). In practice, though, doing that would be the same as doing two separate milestones. Why do two halves of one? I am puzzled.
A milestone is whatever the client and the freelancer agree on. You thought the amount would be in one milestone. The client didn't. You can agree to put 5000 in one milestone, or 25, or 5.
Two things to keep in mind: never accept a contract when the milestone does not reflect what was agreed upon. Always check the offer before you accept to make sure the amount is what you expect.
Milestones are intended to be flexible to accomodate whatever the parties agree upon.
To be clear: this was not one milestone in two parts. This is not how it works. The client intended two milestones, and funded the first one. These are technically two completely separate milestones in the same contract.
How it works: client sends fixed price offer with first milestone. First milestone can be and remain the only milestone, but it is always called first milestone. You accept the offer if everything is as agreed. If not, you talk to the client, and if he doesn't change the offer, you decline the offer.
If you accept, you do the work covered in the funded milestone, and send and submit for payment. Then you wait until the client accepts the request and activates the second milestone. And so forth.
The second milestone can only be activated once the first one is approved. Only one milestone can be active on an ongoing contract, never two at the same time.
Thank you for your clear explanation. I understand what you are saying. However, the idea of creating milestones within milestones is incredibly counter-intuitive and confusing for freelancers who are new to Upwork. I have definitely learned from my mistake. I really appreciate the clarity with which you explained that to me, though. I will always keep it in mind when looking at offers. Thank you.
It is not a milestone within a milestone. It is two seperate milestones within one contract, which can have hundreds of milestones as you go along. I still can't say if the client was inexperienced, or trying to scam you. Probably the latter since he could have paid if he wanted to. He still can pay a bonus on the closed contract, BTW, but it's not likely. I would say they took advantage of your inexperience, not nice, but nothing against upwork ToS, since upwork explicitely states to work only on funded milestones, and only for the amount that was funded.
When you take your next fixed-price job, before you accept the contract, make sure to check that the client has funded the full agreed amount into escrow. On small jobs (in monetary terms) such as this one, do not agree to more than one milestone.
If this were me, I would certainly not refund, but I would close the contract and leave appropriate (not a rant) feedback. This will not affect your JSS.
If you refund, your JSS will be dinged on a contract that wasn't paid for, which includes refunding (whatever the facts of the case).And although public feedback will not show on your profile, the client can still leave private feedback, and this could also impact your JSS.
It would have a much greater effect if you move on with the $22,50 and leave poor feedback.
Thank you for your comment, Mykola. I am very sorry to hear that it happened to you with that much money 😞 I am not really upset about the money... I am upset that this loophole exists and that Upwork is not doing anything to prevent newbies from making that mistake. If you have a moment and are willing to share, I would love to hear more about the other loopholes you have noticed. Take care! 🙂
Upwork is not doing anything to prevent newbies...
You're actually lucky. Look here:
In this forum, it happens a lot more often than your "half funded milestone" case. It has greater impact to the freelancers (they lost their money not just their time). There are ways to help prevent it to not happen again, but nothing done. Although I do understand there are considerations to not do them.
As for your case, I believe they allow half-funded milestone to facilitate clients-in-a-hurry (or something) that thinks creating milestones is a waste of time. To let these clients fund whatever amount they prefer. The freelancer is the one who should only work as much as the funded amount.
In the other hand, it can also be used by clients to (for example) fund a $200 milestone although agreed the job will be done in two phases. If the client trust the freelancer, the freelancer can do the job and submit / request $100 when they done with the first phase. There are also a few other examples on how this "system" can be used.
Next time a client does this, you say: thank you for your offer, but I don't accept split milestones under $1000. Something like that.
I agree it makes absolutely no sense to split small amounts. The one time I accepted that, when I started on upwork, I believe it was something similar, $50 split into 25/25. I reminded the client to fund the second one, and didn't hear back for weeks. Then she came back, funded the second one, and said they would have more work in the future. Never heard from them again.
But ever since then, I decline offers like that, after giving the client the chance to remedy the offer.
There is one other possibility. Maybe the client didn't see your message about paying the other half, or is too busy to do it right now. He may just have forgotten that he didn't pay in full. I would write another polite message pointing out that you were only half paid.
I've looked at this client's hiring history, and he seems to leave reasonable and thoughtful reviews to freelancers, and get consistently good reviews from them. He doesn't look like the devious type who'd con you out of $22.