Why am I paying the service charges for a refund to a client?

[Roshan T]

Hello, I recently had an bad expereince with upwork

Here is the story: I accept an hourly project, the client needed the program within 24 hours (it was a fairly easy task), I was working and need some additional information from the client... 2 days passed, no response from the client! Finally later that day, got an response stating that he does not need the job done since the deadline has been passed! I tried to explain the problem to him and he accept to pay 25% of the total billed time

I was generous and refused, I proposed to end this contract for free! And after a day got an dispute for the $70 (billed by upwork for working 5 hours), accepted the dispute and refunded(?) the client his $70

Now, at the present day, I check my transactions list and I was shocked to know that I WAS CHARGED FOR REFUNDING! I paid $14 to refund $70... what the cake!?

That $14 were taken from my account! That is totally not fair! BIG NO NO

Now I lost my Time + Work + MONEY...

[Petra R · Accepted solution]

You haven't been charged for refunding.

When you refunded Upwork simply refunded the service charge too.

Say the client paid $ 100. You got $ 100, of which you paid Upwork $ 20

If you then refund 100, $ 80 comes from you, and $ 20 comes from Upwork.

What you are seeing as the service fee stems from the payment from the client to you, NOT from your refund to the client.

If you fully refund a contract you are at $ 0 eventually, but it takes a few days to even out as your refund goes to the client from your available balance, which may be before the payment from your client to has cleared through the system

[Roshan T]

So in theory, my balance should be same, that is equal to the balance before accepting the offer.

BUT, Its currently $16... it should be $40 (payment from a previous project). The transaction histroy is messed up... I cannot make sense of it!

[Vladimir G]

Hi Damon,

The payment for the hours you refunded is still not released to you, that's why your balance was used to cover the refund you issued. You can see the pending payment in your Transaction History and on the Reports page. Also, your balance is in a minus and the remaining amount for the refund will be automatically taken once you receive a payment from this or any other client. As Petra stated Upwork returned the service fee and it was not charged to your balance, which you confirm by checking your Transaction History.

[Roshan T]

I see, its nice to know that I haven't lost any money

I have another related question, what if my client never pays the $70 which I refunded?

[Vladimir G]

Hi Damon,

Your client is already charged for the hours you logged, please check our weekly billing cycle.

[Roshan T]

I have already checked pages related to hourly projects before accepting this project and I did not find any thing related to my question, i.e what if the client does not make the payment. I am assuming that the client already has to pay upwork before hiring a freelancer, am I right?

[Vladimir G]

Hi Damon,

If you take a look at the Help article I linked, you'll see that clients are charged on Monday for the hours their freelancers logged the previous week, which I've stated in my reply above. That means the funds on their billing method are automatically allocated for this payment and they can't manually stop the payment, unless a dispute is raised for the logged time.

[Roshan T]

Oops, missed that

[Petra R]

in other words: 

The client HAS already paid.