Client paid deposit for website design and now wants a refund. What should I do?

by 44 comments
Hi everyone! The title says it all. I have a client that has paid me a 150 deposit for a website design at a total price at 350.

Now after I have designed the site for him and have also customized it to his needs, he says that he wants to withdraw and is asking me for a refund. What do I do?

I was thinking that may be i can offer him another service instead for his 150, but not a refund. Please let me know your opinions and past experience.

Thank you,
Ron
#offline marketing #client #deposit #design #paid #refund #website

  • Profile picture of the author reboot38
    Do you have a signed contract with terms regarding refunds?

    Personally I would give him the $150 back and wish him well. Better that than having a pissed of client bashing you on the web.

    On the other hand - you could argue that the work requested was complete and instead of offering him a refund, request the $200 balance be paid too

    Always have them sign on the line that is dotted.
  • Profile picture of the author eperkins153
    Originally Posted by Ron20 View Post

    Hi everyone! The title says it all. I have a client that has paid me a 150 deposit for a website design at a total price at 350.

    Now after I have designed the site for him and have also customized it to his needs, he says that he wants to withdraw and is asking me for a refund. What do I do?

    I was thinking that may be i can offer him another service instead for his 150, but not a refund. Please let me know your opinions and past experience.

    Thank you,
    Ron
    HAVE CONTRACTS FROM NOW ON .... SELLING THINGS 101

    Adobe echosign works great for me
  • Profile picture of the author tonyscott
    Depends on the quality of what you produced for him?

    If it's good:

    Refund him & Offer the site to his competitors

    If it's not so good - do better work

    I'm not a lawyer, blah blah, blah ...

    But at that pricing level, I don't see the value in having a contract, other than a handshake. It would cost more to enforce the contract than the contract value - in time, if not money.

    tony
  • Profile picture of the author Jason Kanigan
    What's the reason for the refund request?

    Did you have an agreement in place between the two of you for what would happen in a situation like this?

    The fact that you have already done the work is a real concern for me. I want to know WHY they want a refund, before taking any other steps.
  • Profile picture of the author iAmNameLess
    Originally Posted by eperkins153 View Post

    HAVE CONTRACTS FROM NOW ON .... SELLING THINGS 101

    Adobe echosign works great for me
    Pointless. For such low priced sales a contract is meaningless. Over a $150 deposit? The OP can sue for $200.. or the client can sue for $150. The reality is, in most cities in the US, the cost of filing would be more than the amount owed. Judgement in your favor? Cool... good luck collecting it.

    The way I would play this out, is demand the remaining $200 payment. This at the very least puts you in a position to have him accept a non refundable $150 deposit and you both wipe your hands clean.

    I most definitely would not give a refund in this case. If he is unhappy with the work you did, then offer to fix it, but make sure you get your remaining payment as soon as its fixed.
  • Profile picture of the author Aaron Doud
    Others have already said some of what I am thinking.

    1. Find out why he wants a refund.
    2. The dollar amount is low so depending on the situation it may be in your best interest to refund to not have a pissed off client.
    3. If they paid via a credit card they might still be able to chargeback so they can force the refund..
  • Profile picture of the author eperkins153
    Originally Posted by iAmNameLess View Post

    Pointless. For such low priced sales a contract is meaningless. Over a $150 deposit? The OP can sue for $200.. or the client can sue for $150. The reality is, in most cities in the US, the cost of filing would be more than the amount owed. Judgement in your favor? Cool... good luck collecting it.

    The way I would play this out, is demand the remaining $200 payment. This at the very least puts you in a position to have him accept a non refundable $150 deposit and you both wipe your hands clean.

    I most definitely would not give a refund in this case. If he is unhappy with the work you did, then offer to fix it, but make sure you get your remaining payment as soon as its fixed.
    Having a contract is NEVER pointless.

    Now I agree the price is ridiculously low in this case but you still need to always have that as part of the checklist of things to do before you accept money from a client.

    - This is what the agreement is
    - This is what I agree to provide
    - This is what you agree to pay
    - These are the terms for refunds / late payment / terms violations etc

    A contract would have prevented an argument in the first place, because it would have been reviewed by the client before money was exchanged. It could have outlined that no refunds would be offered.

    I never have this issue because I follow very simple steps:

    Step 1. I always thoroughly discussed with the client what he wants and what his expectations are from me and what I will deliver.

    Step 2. I go over with him the contract and the terms of the sale.

    This situation clearly shows step 1 and 2 were ignored or done badly. If he didn't get what he wanted then 1 or 2 things happened:

    1. You more then likely didn't find out what he wanted before you started building, and just built something random and showed it to them hoping he would like it, which is stupid.

    2.You didn't bother to make a contract and or review the contract terms with him that outline you don't provide refunds and what the terms of the arrangement are.

    A contract is never pointless and theirs never a reason to not have one.

    Not having one is lazy and foolish and that's not how you run a legitimate business.
  • Profile picture of the author Ron20
    Hey guys! Thanks everyone for your feedback. I think I am going to demand the remaining 200 as nameless has suggested.
  • Profile picture of the author isosales
    Hey cool, have fun with that! When you are done demanding the money back be sure to post a wanted ad for rep management/recovery.

    Pick your battles wisely. A google search of your business from potential customers with bad reviews can cost you a fortune.

    Originally Posted by Ron20 View Post

    Hey guys! Thanks everyone for your feedback. I think I am going to demand the remaining 200 as nameless has suggested.
  • Profile picture of the author sbucciarel
    Is he unhappy with your work? That is the key question. If he is, I'd refund him. When I freelanced graphic design, my deposit was 50% of the project and was non-refundable. Never had anyone quit a project after making the deposit.
  • Profile picture of the author Matt Lee
    Think about this long term. Is $150 worth a pissed off customer, who can literally ruin your reputation in 5 minutes, that took you years to build up.

    Take the loss, issue the refund. Move on to bigger & better projects knowing that this is behind you and won't be looming over your head.
  • Profile picture of the author Andrew H
    Yeah I am with iAmNameLess on this one, assuming your work isn't complete garbage, demand the remainder of the payment. At the very least this will put you in the power position, with him defending why he shouldn't pay you the rest. The deposit will be forgotten about...
  • Profile picture of the author eperkins153
    Originally Posted by Andrew H View Post

    Yeah I am with iAmNameLess on this one, assuming your work isn't complete garbage, demand the remainder of the payment. At the very least this will put you in the power position, with him defending why he shouldn't pay you the rest. The deposit will be forgotten about...
    I can't believe people are giving such bad advice, especially sense its such a pathetically low amount. Just give him a refund don't build a business off of providing bad quality service and not offering a refund. Almost any business you go into today has a refund policy for people that are not satisfied with what they received. All your going to do is make them more angry and tarnish your reputation and positively receive negative online reviews.

    This would be a different discussion if it was more then 150 but I mean really....

    1. You didn't truly know what he wanted obviously because he's not satisfied.
    2. You either didn't have a written agreement or didn't review it with him.
    3. You should want to be reputable business not something people start to think of as a scam or rip off

    Just give the guy his money back. Focus on making your business model prevent these types of things in the future. Take your licks and move on
  • Profile picture of the author Eddie Spangler
    I totally get the guys who say demand the money, professionals dont work for free.

    You however are NOT a professional yet else you would not be in this position.

    I say just chalk it up as a learning experience and go from there.BUT.....
    It would not be a bad idea to explain to guy that you did the work and he changed his mind out of no where. Perhaps he can be reasoned or you can appeal to his sense of fair play and keep the deposit but if he is adamant and you sense that he's a trouble maker type then just give money back and move on.
  • Profile picture of the author Samuel Adams
    A verbal or written agreement (such as email communications) most likely existed. And, so long as you delivered what you said you would, then he has no reason for a refund. You could offer to tweak the site for a few days. Still, you've probably spent a week or more on this project, so spending any more time on it would be a waste of your time.
  • Profile picture of the author bizgrower
    Find out why he wants a refund.
    Work to remedy the situation.
    Or, if he still insists on the refund, just give it to him and move on.

    Make sure you get more deals in your pipeline so you don't be a jerk over what may be a large amount personally, but a small amount for the website business.

    Learn from this in terms of what and how you delivered.

    IF you do good work, charge more. How long did it take you to find the client, get the
    deal, agree on deliverables, create and deliver the work...?

    Under a $1000, get full payment up front. Over a $1000 get half up front - non-refundable - and then the rest in chunks upon completion of each agreed upon milestone.

    Don't become desperate for money and try to do business.

    Dan
  • Profile picture of the author qu4rk
    OP, do yourself a favor & listen to the people saying to issue him a refund.

    I do reputation management for clients. You don't want a pissed customer over $150. As a matter of fact, depending on what actions he takes, it could cost you 10x or 100x the cost of the dispute.

    Imagine if he sprays his bad experience over the internet & then as you look for new customers, they like everything & then look you up & find his bad experience posted all over the internet.

    It costs companys big bucks in lost sales.
  • Profile picture of the author iAmNameLess
    Originally Posted by eperkins153 View Post

    I can't believe people are giving such bad advice, especially sense its such a pathetically low amount. Just give him a refund don't build a business off of providing bad quality service and not offering a refund. Almost any business you go into today has a refund policy for people that are not satisfied with what they received. All your going to do is make them more angry and tarnish your reputation and positively receive negative online reviews.

    This would be a different discussion if it was more then 150 but I mean really....

    1. You didn't truly know what he wanted obviously because he's not satisfied.
    2. You either didn't have a written agreement or didn't review it with him.
    3. You should want to be reputable business not something people start to think of as a scam or rip off

    Just give the guy his money back. Focus on making your business model prevent these types of things in the future. Take your licks and move on
    I still wouldn't give a refund if the work was complete. If he is unhappy with something... fix it.. but no refund. If this went to mediation with the BBB or AG of the state he is in, they would side with him. If he posted a bad review based on that, and said it was a scam or rip off, then that is libel and defamation.

    You think that these things don't happen when you have a contract? A company I consulted and did reputation management for (not ORM, not the crappy stuff, but REAL reputation management) had 10 page contract for everyone that bought, $150 to the thousands, with a separate 6 page contract for hosting agreements. Last year they had over 500 refund requests. A contract does not protect you like you think. A contract does not stop a client from being unhappy. It does not protect you in court like you would think.

    You recommended echosign, but in court it doesn't really hold up. If you do not have a contract that is notarized, then it often times will be thrown out. The exception would be websites or online services, software, etc. where you can operate with a TOU or TOS.

    1.) We don't know the position the OP is in. We don't know if he is doing this on the side, or if he started out of desperation with very little bankroll or no bankroll at all. We don't know if he is sitting on millions of dollars, or barely being able to pay his bills. If he has plenty of money, then yeah, refund the lowlife. If he doesn't, then don't.
    2.) If you get in the habit of refunding people when work is complete, then you will be in a habit of getting walked on by many clients you find in the future. This isn't just about refunds, but general scope of work, communication, everything.
    3.) The time spent with the client, and receiving less than 50% deposit for the work, is ridiculous. If this went to court, which it never will, the court will view the deposit as a down payment to get started on the project, if the project was never started then they would likely rule that he needs to return the deposit, if the project was not only started, but completed, and the client demanded a refund of the deposit, it would never happen. Contract or no contract.
    4.) No one except the OP knows what the client's temperament is. If he is starting out, he can simply tell the client, I'm sorry, I'm unable to do the refund for $150, I completed the work and should be receiving the remaining $200. I don't have the cash flow, being new in this industry, to be able to provide a refund on that deposit since the work is done. I hope you understand.
  • Profile picture of the author iAmNameLess
    Originally Posted by qu4rk View Post

    OP, do yourself a favor & listen to the people saying to issue him a refund.

    I do reputation management for clients. You don't want a pissed customer over $150. As a matter of fact, depending on what actions he takes, it could cost you 10x or 100x the cost of the dispute.

    Imagine if he sprays his bad experience over the internet & then as you look for new customers, they like everything & then look you up & find his bad experience posted all over the internet.

    It costs companys big bucks in lost sales.
    Here is the thing most people on this forum don't understand, who offer ORM but not real reputation management. Most reviews posted online, are illegal. A company I did reputation management for, had about 10 really awful reviews online. Those 10 reviews probably did cost them a lot of money in lost business but the reviews were improperly worded. One review, ended up costing the poster of the review $50,000. Total settlement from the improperly worded reviews was over $300,000.

    You can state your experience in a review, you can state your opinion, but you can not say it was a scam, bad investment, rip off, etc. You can not call someone a fraud, you can not call someone a thief for not providing a refund... it is defamation of character, libel, etc.

    If this was a b2b agreement, then they can't post anything on a consumer site anyway.

    I understand why people are saying to refund him... and I'm not exactly looking at this from the amount the guy paid, or the amount he would have to refund, but from a general stance on the issue. When you get in the habit of saying, oh, I can afford to refund this guy, and this client, and this, then you are getting into a bad habit. Refunds should not be based on if you can afford to do it, or not afford to do it, it should be based on if you held up your end of the agreement or not.
  • Profile picture of the author Brenda Trott
    I'm glad you decided to take Nameless's advice. I don't use contracts and I don't take deposits. I set a rate for set ups like websites and landing pages and then waive those fees when we have a 6 month agreement. I list that agreement on my paypal button and I generate a cancellation button at the same time I generate a monthly recurring fee button. If someone needs to stop making payments, we can part as friends..and no one owes me money because I've been paid in advance. Contracts may have their place, but in my market I've found it generates fear and are highly unnecessary.

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