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valmedalla
Community Member

Refund Given

Hi, I need some help. I had a contract with my client and it's already ended, he paid me via Escrow. But he refunded it without me knowing it. I just received a message from Upwork saying "Refund Given". Is that how refund works? I dont have choice because it automatically deducted on my pending earnings. Please help

18 REPLIES 18
pgiambalvo
Community Member

Unfortunately, if a client requests a refund, Upwork gives it to them just because they requested it. It's then up to the freelancer to contest that and try to get the money back. And good luck with that, cause it's not gonna happen. The only way you're protected is if you use the time-tracker.


Peter G wrote:

Unfortunately, if a client requests a refund, Upwork gives it to them just because they requested it. 


No, they don't. If the payment is in escrow, there's a mediation and arbitration process, in which the freelancer usually prevails if they actually fulfilled the brief. The only other way for a client to get a refund is through a chargeback, which is relatively rare, and Upwork will ban the client's account in such cases. (But I imagine that all of this goes out the window if the project was a violation of the terms of service in the first place.) 

 


Peter G wrote:

Unfortunately, if a client requests a refund, Upwork gives it to them just because they requested it. It's then up to the freelancer to contest that and try to get the money back. And good luck with that, cause it's not gonna happen. The only way you're protected is if you use the time-tracker.


Absolutely untrue from start to finish. Any particular reason for passing on such gross disinformation?

feed_my_eyes
Community Member

What was the job, and for how much money?


Christine A wrote:

What was the job?


It sounds like the OP fell for a "send me real money (or similar) and I pay you much more in fake/stolen/fraud/non-existing money on Upwork" scam, violating the terms of service while doing so.

wlyonsatl
Community Member

Christine,

 

How do you know "If the payment is in escrow, there's a mediation and arbitration process, in which the freelancer usually prevails if they actually fulfilled the brief"?

 

From what we have seen on this board from other freelancers a) the mediation process often means client and freelancer split the difference on the amount the client is demanding be refunded and b) arbitration is prohibitively expensive for smaller projects where the amount in dispute is not substantially greater than the cost of arbitration.

 

For the 12 months ending 12/31/22 Upwork reported $6.0 in its Provision for Transaction Losses, an increase of 70% compared to the previous year. Revenues rose 35% over the same period.

 

I expect Upwork wishes chargeback were much rarer, but maybe it's just an acceptable cost of doing business.

From what I've read in the forums, (a) the mediator suggests a compromise, but neither party has to agree to that; and (b) if the cost of arbitration is for a smaller amount and both the client and freelancer dig their heels in, Upwork pays them both. 

 

A client would have to be pretty stupid to pay for arbitration if they know that the freelancer fulfilled the brief; then they'd lose both the money in escrow plus the arbitration fee. I don't have a percentage breakdown between clients winning vs. freelancers winning, but from what I've seen in the forum and on Reddit (and from people I personally know who have gone through the process), the client usually backs down first.

 


Will L wrote:

For the 12 months ending 12/31/22 Upwork reported $6.0 in its Provision for Transaction Losses, an increase of 70% compared to the previous year. Revenues rose 35% over the same period.


I'm not at all surprised. Upwork loses money when they have to pay freelancers on hourly contracts when the client absconds. (But weren't you claiming just a few weeks ago that Upwork's losses from payment protection don't amount to much?) I don't know what the breakdown is between that and losses due to chargebacks, and I'm not sure what it's got to do with Peter's allegation that clients get refunds simply by requesting them. It's not a simple matter of saying, "I want my money back" and Upwork just hands it over. I notice that you're not questioning him as to where he got his information, or asking him to back it up with proof? Why is that?


Will L wrote:

 

For the 12 months ending 12/31/22 Upwork reported $6.0 in its Provision for Transaction Losses, an increase of 70% compared to the previous year. Revenues rose 35% over the same period.

 

I expect Upwork wishes chargeback were much rarer, but maybe it's just an acceptable cost of doing business.


Upwork has tracked their loss percentage as 1 to 2% over the last few years, and projects it to remain at that level in the years to come. It does not seem to be among their more pressing concerns.

wlyonsatl
Community Member

No, Christine, I don't remember "claiming just a few weeks ago that Upwork's losses from payment protection don't amount to much." Please do let me know where I said that on this board.

 

And Petra already responsded to Peter's statement. I see no reason to just repeat what Petra has said.


Will L wrote:

No, Christine, I don't remember "claiming just a few weeks ago that Upwork's losses from payment protection don't amount to much." Please do let me know where I said that on this board.

 

And Petra already responsded to Peter's statement. I see no reason to just repeat what Petra has said.


I remember that, it was in one of the threads about payment protection on hourly contracts and the implications for everyone when FLs intentionally continue working with clients who've displayed deadbeat behavior by not paying their invoices and making UW suspend them until they do. I don't have time to go track it down nor, I suspect, does Christine.

 

 


Phyllis G wrote:

I don't have time to go track it down nor, I suspect, does Christine.

LOL - I don't have time, but I didn't let that stop me. 😄


Will L wrote:

No, Christine, I don't remember "claiming just a few weeks ago that Upwork's losses from payment protection don't amount to much." Please do let me know where I said that on this board.


Screen Shot 2022-03-08 at 3.43.23 pm.png

 



Will L wrote:

... I see no reason to just repeat what Petra has said.


🤣


Phyllis G wrote:

Will L wrote:

... I see no reason to just repeat what Petra has said.


🤣


My reaction exactly!

wlyonsatl
Community Member

You clearly didn't understand the entirety of what I said in my previous post you have quoted above, Christine. That’s why I didn’t remember saying what you have claimed I said.


No one outside Upwork, including you, has any fact-based knowledge of what the overall rate of chargebacks is because, as we have been told multiple times on this message board, freelancers bear the brunt of chargebacks on fixed price contracts. Upwork simply reverses payments made to freelancers whose clients’ payments to Upwork have been reversed by the credit card issuer/bank, the clients themselves, etc.


So, by definition, Upwork incurs no loss (other than minor processing costs) as long as it successfully takes the money back from the freelancer as an indisputable “refund.” Can you understand that Upwork’s $6.0 million Provision for Transaction Losses for 2021 only represents Upwork’s own losses across all contracts, which I expect, but don’t know, largely reflects Upwork’s excellent payment protection on hourly projects. The amount freelancers lost on fixed price contracts, disputed manual hours, etc. is not disclosed by Upwork publicly and has nothing to do with the $6.0 million figure.


To its credit, although Upwork has no obligation to step up and take money out of its own pocket when trying to mediate disputes, we know that it does so in certain cases to a certain extent. (But chargebacks are not subject to the dispute process, right, Christine?) These generous mediation-related payments from Upwork are likely to be included in the $6.0 million figure above, but there is no way to know for sure.


Pointing to the $6.0 million figure for “losses” as only 1.2% of Upwork’s annual revenue of $502.8 million is totally irrelevant to claiming chargebacks are, as you say, “rare.” This $6.0 million number tells us nothing about the overall chargeback rate Upwork and its freelancers incur.


There is no public information on the subject that I know of. If you have such information, please share it with the rest of the class.

Nope. The fraudulent/unrecoverable payment to Upwork is booked as revenue. When payment fails, it has to be deducted from revenue. That's a loss.

wlyonsatl
Community Member

Yes, Douglas Michael, revenue that Upwork has booked and is then subject to a chargeback is reversed out of revenue reported to shareholders and the SEC. Uncollectible receivables are not allowed to remain in the Revenue number. And we have heard many times that "refunds" freelancers experience due to chargebacks are not losses. They're just reversals of money never received. Upwork also has to reverse recognition of revenue never received.

 

But this is largely unrelated to the $6.0 Provision for Transaction Losses. Those are items that take money out of Upwork's pocket.

 

Regardless, your post has nothing to do with whether or not chargebacks are "rare." No one outside Upwork knows how frequently chargebacks occur, either as a hard number of affected contracts/projects or as a percentage of total freelancer earnings.

wlyonsatl
Community Member

And don't forget, Douglas Michael, that for every $100 Upwork reverses out of its own revenue due to an unrecoverable refusal/inability of a client to pay (via chargeback, etc.) for billed services, freelancers will likely see at least $500 - $600 deducted from their own accounts. 

 

 

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