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Help? Client is demanding a full refund?

by MattBrighton
34 replies
Hey There

I have worked with loads of people for graphic and web design projects, for my safety and theirs I always make us both sign a contract that outlines things like delivery, cancellation policy and what happens as far money goes if something goes pear shaped.

I have had a client who paid me a deposit of $80 last week for a web design and development project - I started the project and sent over a preliminary mockup to him, he instantly didn't like it and without reason or understanding that it was no where near finished - he started demanding a full refund. I sent him a polite offer back saying its a difficult situation because 9 hours had already gone into the project. By giving a full refund, this guy has just wasted a full days work that could have been spent on other clients and projects. He was a polite guy so I mailed him saying I'm prepared to offer a 50% refund due to the fact many hours have already been spent on the design.

Basically he's said that's totally unacceptable and he is now threatening to contact PayPal and take it further.
I've never actually had a dodgy client until now - I should have picked up on this a little earlier because he has a company based in the US yet he paid me on paypal from his sisters account? Which I found a little strange but put a blind eye to it and kept going onwards.

He's digitally signed a contract that states the following for cancellation

Cancellation.
Both parties understand that Client or Designer may terminate the service at any time if, for
any reason, the relationship is deemed unsatisfactory by either party. Upon written or verbal cancellation,
Client is responsible for payment for all expenses incurred and any work done toward the completion of the
project based on the percentage of project completed. Should Client cancel the project following its completion,
Client is responsible for full payment as per the above estimate plus all other expenses incurred.
I just want to check that I'm definitely safe with this?

Thanks
Matt
#client #demanding #full #refund
  • Profile picture of the author Global Warrior
    Ultimately, from what i think you said, Paypal is the arbitrator. You are talking about such a small amount of money, if you fight this, you will lose sleep and hair fighting it. Which side do you think paypal will be on? I think they ALWAYS err to the side of the person that has paid money initially. Maybe you should just escalate this with paypal, say you had a contract and let them be the judge. You don't want a scenario where you lose the argument and then have your paypal account put under review or closed.

    I think the only satisfaction you are going to get with this is prove to paypal that you have honoured your side of the bargain and INSIST they dont allow him to do tis to anyone else, thereby potentially cutting off (hopefully) one of his income/payment streams and keeping yours in tact.

    Good Luck

    GW
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  • Profile picture of the author Steven Fullman
    Make sure you tell PayPal that the dude signed a contract whereby he's responsible for your outgoings (i.e. 9 hours of your time).
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  • Profile picture of the author frenchsquared
    On that small of amount I would just give it back.

    But I agree with everyone, tell Paypal you have a contact, give them a copy of the contract and let them decide. I personally was the buyer in a paypal transaction and lost a dispute. Paypal sided with the seller, when the product was not as described.
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  • Profile picture of the author Don Schenk
    I would give it back just to be rid of him. This type of customer can suck the life right out of you.

    He's doing you a favor by showing his true colors now, early in the game. Let him become someone else's problem - not yours - an rejoice he is gone.

    During all the years I owned the photography business I would occasionally run into these types of yahoooos. It took me a few years before I got smart enough and learned to weed them out from the onset. It was not a lot of fun learning.

    :-Don
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  • Profile picture of the author John Romaine
    It might be worth your while (next time) to make it clear from the start, that the initial deposit is non refundable.

    Will prevent this issue altogether.
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    • Profile picture of the author radhika
      Just refund and save those graphics and templates, so you can use them for any other client.

      After that take a deep breath and get goodnight sleep!

      .
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    • Profile picture of the author Paul Barrs
      Originally Posted by MattBrighton View Post


      I just want to check that I'm definitely safe with this?

      Thanks
      Matt
      What??

      Are you "SAFE" with this? Let me make it clear that every time you bite a customer you are definable NOT 'safe'.

      Have you any idea who much damage a pissed off customer can do to your business? And for 80 Bucks?? You need to look at it in a different way... do the right thing by the customer, give them their money back (WITHOUT question) and seek to find out what the fault was - most probably in communication - so you can see that it doesn't happen again.

      That's EASILY worth 80-bucks. Heck, most business would shell out thousands to find out how to improve their communications and customer service skills.

      You're totally on the wrong track even arguing about this.


      Originally Posted by ramone_johnny View Post

      It might be worth your while (next time) to make it clear from the start, that the initial deposit is non refundable.

      Will prevent this issue altogether.
      And for future reference, yes, this *could* work... the "initial deposit".

      - Paul Barrs
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      • Profile picture of the author SteveJohnson
        Originally Posted by SEO-webdesign View Post

        What I do is remove the content on their style file - it messes up their site BIG time. Did it to one client, and he made it a priority to pay me.
        You're lucky the client didn't sue you instead of paying you.

        Originally Posted by Paul Barrs View Post

        What??

        Are you "SAFE" with this? Let me make it clear that every time you bite a customer you are definable NOT 'safe'.

        Have you any idea who much damage a pissed off customer can do to your business? And for 80 Bucks?? You need to look at it in a different way... do the right thing by the customer, give them their money back (WITHOUT question) and seek to find out what the fault was - most probably in communication - so you can see that it doesn't happen again.

        That's EASILY worth 80-bucks. Heck, most business would shell out thousands to find out how to improve their communications and customer service skills.

        You're totally on the wrong track even arguing about this.

        - Paul Barrs
        Some customers need to be 'bitten' if they're totally in the wrong. Maybe the customer ought to "do the right thing" by the seller and pay him for the work he did - at least partly?

        That said, I'm fairly certain we don't have the entire picture. 9 hours of work for a $160 project (assuming 50% up front)? And it's not even done yet?

        I'm getting the impression that the OP (sorry if I'm wrong about this, correct me if I am) is something of a beginner, maybe doesn't know how to do a creative brief or manage a project. The description in the post does indicate a communication problem somewhere.

        And Mr. OP - don't lean too heavily on your 'contract'. You should consult with an attorney to determine whether 'digitally signed' amounts to more than just a pile of dog do-do in your jurisdiction.

        You should probably wash your hands and your mind of this 'client' - and check every once in a while to make sure he isn't using the comp that you sent. You did send a comp and not a completed file, right???
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  • Profile picture of the author Ben Gordon
    This is what you do.

    Give the guy a refund, and then send him an email with an invoice. Since you worked for 9 hours, consider each hour at a rate of $15 (or more if your time is worth larger which doesn't seem to me in this instance). Email him the invoice of $135 (or whatever the amount) and show him the signed contract. Make sure that the emphasize the quote: "Client is responsible for full payment as per the above estimate plus all other expenses incurred" in your email. If he doesn't pay, either just drop the case on contact your lawyer and take legal action against him.

    This is not legal advice, just what I would do in your scenario.
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  • Profile picture of the author Robert Michael
    Technically, even if he tries to dispute with PayPal, its a service/digital good.

    PayPal wont refund the money if you can prove that they received what they purchased.

    I would offer him a partial refund of $50, if he accepts you can both move on. If that isn't good enough he can take it up with PayPal.. which if he does, you'd win.

    You can't spend all day working on something for free. And PayPal understands this.

    Don't be afraid of them. Just call and let them know if you ever think something is wrong, and you wont have anything to worry about.

    Plus you have a contract so yeah.. I dont see the problem. My solution is actually helping the buyer more than it would be helping you (financially) but as far as time & effort, its worth it.

    Hell.. offer the guy a full refund if you have the $ for it and you just want it to be over with. I dont know what your situation is like..

    But if you're only asking because you're afraid of what PayPal might do/say, dont be.. lol
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    • Profile picture of the author Ben Gordon
      Originally Posted by Whos That Guru View Post

      Technically, even if he tries to dispute with PayPal, its a service/digital good.

      PayPal wont refund the money if you can prove that they received what they purchased.

      I would offer him a partial refund of $50, if he accepts you can both move on. If that isn't good enough he can take it up with PayPal.. which if he does, you'd win.

      You can't spend all day working on something for free. And PayPal understands this.

      Don't be afraid of them. Just call and let them know if you ever think something is wrong, and you wont have anything to worry about.
      Yep. Calling PayPal would definitely be the number one thing you'd want to do right now -- or after he disputes the sale.
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  • Profile picture of the author Genycis
    That one will be a bit tricky with Paypal given how they are about their digital goods or services. They seem to almost always favor to the customer. I agree with some of the warriors in here though to pretty much chalk it up to a lesson learned. Look at it this way: Better to have only spend 8 or 9 hours on a preliminary that he already doesn't like that you'll lose 80 bucks from, than to have done 3 or 4 days of work for more that all of a sudden is an issue with him.

    For future terms, make sure on the contract that you both sign off on, that it's stated on there that there is a Non-Refundable fee of $xx.xx for preliminary work and the hours that it takes to put into the draft. This way, they know it up front, and you could use that as leverage with a dispute if it came up.

    I feel for you on that one though, and I hope something pans out where you can win this dispute... but if not, don't drag it on too long, you won't gain anything out of it but stress. It'll work itself out in the end, and he'll wind up finding shoddy work somewhere else.
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  • Profile picture of the author Martin Lee Jr
    I agree with everyone's comments - however at the end of the day I would say give him back his money, and get some rest. It's probably not worth being stressed out over $80.00 dollars
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  • Profile picture of the author Robert Michael
    Na. Call them before they dispute. That way they already have your side of the story and know what you expect to happen.

    @Gen, lol no.. they do NOT always side with the customer. The problem is that a lot of sellers forget to mention that its a service or digital good. LOL!

    However yes, if you have the $ to do it, then I'd just give him a refund, blacklist him & move on. Life is too short to be pissed off all the time. haha what goes around comes around, its just a matter of time before they get whats coming to them..
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    • Profile picture of the author Genycis
      Originally Posted by Whos That Guru View Post

      Na. Call them before they dispute. That way they already have your side of the story and know what you expect to happen.

      @Gen, lol no.. they do NOT always side with the customer. The problem is that a lot of sellers forget to mention that its a service or digital good. LOL!

      However yes, if you have the $ to do it, then I'd just give him a refund, blacklist him & move on. Life is too short to be pissed off all the time. haha what goes around comes around, its just a matter of time before they get whats coming to them..
      Lol! I guess I always heard the horror stories (and maybe it's related to my niche more) that digital goods and services seem to fall more to the customer's benefit, especially with digital downloads. I agree with your comments to the OP though, it needs to end here, and move on. Karma is a boomerang... and trust, he'll get his in the end. Maybe the next person he deals with will claim to do his work, get his money, and disappear faster than he can imagine. Karma's always at work. lol
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  • Profile picture of the author Raydal
    Those are typical terms for a service style contract. You
    have to cover yourself for cancellation when you have
    already a percentage of the work. I don't know if you
    ave satisfaction guarantee clause in your agreement
    that would nullify this but to expect a 100% refund
    after presenting the mock-up is really unrealistic.

    If he doesn't like the mock-up then this is the
    point where he indicates what he want to
    change. Be thankful though that it is only
    $80.

    -Ray Edwards
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  • Profile picture of the author SEO-webdesign
    What I do is remove the content on their style file - it messes up their site BIG time. Did it to one client, and he made it a priority to pay me.

    Another thing you must do is place this rule in your erms of service.
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    • Profile picture of the author John Romaine
      Originally Posted by SEO-webdesign View Post

      What I do is remove the content on their style file - it messes up their site BIG time.
      Remind me never to work with you.
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      • Profile picture of the author Kay King
        I think you'd be ok with paypal - but not sure the fuss is worth it for $80

        If you choose to refund him - be sure to let him know YOU own the rights to the work done so far.

        I think graphic design is tough as so often customers have a "view" in their mind of what they want - but can't tell you what that view is. You have to be a designer and a mind reader.
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  • Profile picture of the author J Bold
    With that proof of contract, you should be fine with paypal. Paypal also does not protect buyers when buying services. You should be fine. If he disputes it, scan the contract, give all the details and you should be good.

    I have heard of paypal not liking it if you use them for services so that's the only thing I'd worry about. But in case of this dispute, I'd say you are in the right and have the documentation to prove it. Don't let it get you down and don't spend too much time worrying about it. It's not worth it.
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  • Profile picture of the author John Romaine
    Matt, when I was freelancing, I'd find myself in situations like this occasionally, and it used to really get me down.

    But eventually I started looking at it from a different perspect.

    Instead of getting bummed about it, give the guy his money back, and sit down and ask yourself ...

    "How did this happen?"
    "Where did I go wrong?"
    "How can I prevent this from happening again?"

    Once you address those questions, you'll feel much more empowered and confident, and as a result, your business will GROW.

    Take the negative and it use it to your advantage.

    Look at it this way, whilst it sucks, for just $80, this client is helping you long term.
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  • Profile picture of the author Entrecon
    A full days work for $80? That means you are working for $10/hour. You might want to take a look at your rates. If you are charging more you usually getting a higher class of customer and you don't feel it that much when there is a failure to pay.
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  • Profile picture of the author Robert Michael
    lol I know, but I literally just got off the phone with PayPal a few days ago.

    Check this out.. its hilarious.

    Someone signed up as an affiliate, bought from their link, downloaded my sh*t and then attempted to refund it via their PayPal - All that did, was refund their commissions back to me. HAHAHA I almost fell out of my chair laughing when I saw it.

    I immediately got on the phone with PayPal, explained the situation and then I informed JVZoo about it. Turns out, PayPal already knew it was a digital product from my description, so they told me they wouldn't allow the buyer to dispute at all and I had nothing to worry about.

    Then, JVZoo banned them. lol so yea, karma is all around you

    & I definitely agree with Kay.. just give the $ back and be done with it, if you can afford to of course. However, screw informing the guy that you are keeping the rights. Let him work himself into a lawsuit - again, karma

    Just keep the records of everything so you can prove that you own the rights to the work.
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  • Profile picture of the author Riggs
    The problem with online contracts when making a transaction online is the gray area of what content is legally binding. Also, any defense could be argued that the buyer's computer was under the control of another person at the time the contract was agreed to. Proving otherwise is extremely difficult.

    Luckily PayPal isn't a legal body and they're reputable for not having any morals. Supply enough evidence in a PayPal dispute and you'll stand just as much of a chance in winning as your customer.
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  • Profile picture of the author Ashley Redcliff
    Don't worry, you will have your chance to defend yourself if the buyer opens a dispute. Just provide the necessary evidence, i.e. the contract, the work you did, and any correspondence between you and the client. Someone tried to get a refund from me once and I managed to prevent that from happening, as I had done the job and was able to prove it to PayPal. Took a whole few minutes of my time.

    I don't fully agree with what Paul Barrs is saying. Don't be afraid to keep or collect what is owed to you. You don't have to be a pushover in order to protect your reputation. A customer like this one usually isn't trustworthy in general, and is unlikely to have any leverage to do harm to your business by badmouthing you. Almost any successful well-respected business will collect what is owed to them in this kind of situation.
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  • Profile picture of the author MikeyDreamboat
    $80 is not worth the hassle. Depending on if he tries to make it personal with criticisms of your company it is going to cost you more than the 9 hours of work you did on the project to begin with, with no chance of profit beyond the $80 he sent.

    You are in the right, but the hassle for that amount of money is probably not +EV.
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    • Profile picture of the author Ralf Skirr
      I don't understand why people recommend to refund the customer.

      The work has been done, a contract has been signed and the money has been paid.

      For now, the seller doesn't have to do anything.

      Once the client starts a dispute, the seller only needs to make clear the facts to Paypal, and wait a few days on what's going to happen. It is not necessary within the dispute to have a lengthy discussion with the customer - so there isn't much hassle at all.

      It takes a few minutes to save the payment for a day's work.

      It is very likely that Paypal won't issue a refund, no matter how hard the customer tries.

      So, Matt, let the customer do his thing, state your facts, and wait for Paypal's decision.

      Ralf
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  • Profile picture of the author GarrieWilson
    ZERO need to call PayPal.

    I'd tell him to pound sand as deposits are not refundable.
    Then I'd let him know that if he disputes it, I'd fight it
    and wn since PayPal does not cover digital items or services.

    If he disputes it, then let PayPal know. In the trackng filled,
    put "other" and enter his IP. Then let them know it was a
    digital item.

    -g
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  • Profile picture of the author Randall Magwood
    Your client might not get much luck from Paypal since it was a service based gig. But if alot of people started asking for refunds for you, and you're not willing to pay them back the money... Paypal will more than likely step in and investigate the matter.
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  • Profile picture of the author Mountainw
    Banned
    [DELETED]
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    • Profile picture of the author Riggs
      Originally Posted by Mountainw View Post

      You are not safe because Paypal always lean to the customer
      Given PayPal is an e-commerce platform, it's a service provider by definition. Therefore I think both parties are considered "customers" of said service given they both require said service during a transaction.
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  • Profile picture of the author Webfuel Web Design
    It's a really difficult position to be in, but I'd go with the people who recommend just paying him back the money. It's such a small amount, and if you fight it then it's not just the 9 hours you've spent on the project - but all the worry and time you'll spend in the future too.

    Look on it as a very cheap lesson in spotting dodgy clients. If it saves you losing more money on a bigger scam in the future then it's money well spent.
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  • Profile picture of the author ezinewriter
    I always had a Bad experience with Paypal, But you shld definetely give it a try.
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  • Profile picture of the author ruudbwai
    just give the money back, 80 quid aint worth the headache, plus you don't want that sort of client in the long run anyway...cut your losses, give him a full refund, case closed. Be thankful it's only 9 hours, and not 90.

    On a side note, never show the client a 'work in progess' they just don't GET IT...the number of times clients have asked me, why is lorem ipsum on my website, my website should be in english - :p palm-face!

    Show them a folio, then show them complete designs on a dev-server. Thats how I work, it's a few extra hours, but saves days of head-work with client that don't 'get it' .

    Hope that helps.
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