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Thread: Is it workable to request some up front payment for work done over the Internet?

  1. #1

    Default Is it workable to request some up front payment for work done over the Internet?

    Hi there,

    I find myself wondering about something else respecting the services that I am offering through my web site and was wondering if I could get additional input from anyone that might care to give it?

    Specifically I am wondering about the following...

    I have never, ever had a client of mine stiff me as in walking away with my work and not paying me. Partly I think because I have been very careful about who I work for and because I have not focused at all on working for anyone not based in San Diego (where I could at least go and stand in front of their store front with a protest sign if they did not pay me LOL).

    If I do excellent work to the complete satisfaction of a client I expect to be paid what was agreed upon.

    Now the problem is this...

    As a result of what seems to be a good merchant account deal that is being offered me where I will be able to start accepting credit cards at no up front cost to me (without having to use the likes of PayPal)...I will be able to now offer my services generally over the Internet to anyone.

    Which will introduce the very real possibility that I might not get paid for work done for someone entirely over the Internet. Who might live several States away from me (I live in California) or even in a different city than San Diego.

    I am thinking that it might be wise to absolutely require a $25 deposit on whatever work I am hired to do for those persons or businesses that are not in the immediate San Diego area.

    What do you all think about that?

    I realize that I might lose some prospective customers over this requirement (if I implement it) but it's the only way I can think of to somewhat protect myself from people just hiring me to do web site development work and then walking away without paying me.

    Anybody experienced problems with non-payment for work over the Internet before? Is that just a cost of doing business? Have you been able to diminish that somewhat in some way? If so...how?

    As an alternative is it workable to require a certain amount of money to be put into an escrow account whose funds will not be released unless both parties agree or something similar (if such a thing is available online)?

    I am all ears if anyone has any input or suggestions on this.

    Thanks.

    Carlos

  2. Default Get 50% up front

    Hi Carlos,

    I've always asked for (and received without argument) half of my fee up front for copywriting work (and the other half after delivery/happy acceptance of the final product).

    I've never had a problem with nonpayment. But the people I've done work for are "known" to me -- virtually speaking They're also known to many others, and value their reputations (they wouldn't want word to get out that they'd failed to pay for services rendered... and on the Internet, word always gets out). So who you do work for may make a difference, as you've suggested.

    I think asking for a nonrefundable deposit is wise. Suppose you start a project for someone and spend several hours on it, but they contact you before you're done (and before you send them a bill) to say the project is canceled? Even if they don't receive the product from you, you've devoted a lot of your time to it (time you could've spent on other projects)... so you should receive some compensation.

    Bonnie

  3. #3

    Default

    Thanks for the input Bonnie. Trouble with asking for some payment up front and giving a payment up front is that neither party really knows the other such that either one could lose out.

    I guess it's safer working with people in forums or that one knows by other means over the Internet in that their reputation definitely would take a hit if either they did not do a good job or pay as agreed upon.

    In any case my merchant account "good deal" was not the good deal I thought it was going to be so I am back to just focusing on new clients in the San Diego area (where I can pick up a check in person or have them transfer money directly into my bank account) and advertising either by calling on new clients directly over the phone or using craigslist.

    Thanks again for your input Bonnie.

    Carlos

  4. #4
    Join Date
    Jul 2009
    Location
    Missouri, USA
    Posts
    950

    Default

    Same here, during all my years as a web designer, I always required 50% of my estimated quote in advance of my starting work. In the service-based industry, this is standard, because your time is what you're being paid for and a deposit ensures you get paid for at least part of your time, should the client bail on you.

    Believe me, I've taken on clients without requesting the 50% deposit, and gotten burned. So yes, it's acceptable to ask for a good faith deposit, or whatever you want to call it; but generally if folks have money invested in a project, they'll see it through to the end. Not always, but usually.

    It's the same concept as charging folks to attend webinars/teleseminars - usually if they pay to attend, they see more value in it and have an investment in it, so they show up.

  5. #5
    Join Date
    Jul 2009
    Location
    Vermont
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    154

    Default

    Same here. 50% up front, 50% on completion. Occasionaly I'll set up a payment plan for that final 50%, but that's rare and only for people that I KNOW aren't going to stiff me. I try to be flexible, but it IS a business and we do have to pay our own bills.
    WordPress training, custom web design & development, web marketing consulting www.sproutnewmedia.com

  6. #6

    Default

    Hmm...that's interesting. Locally in San Diego I have never asked for money up front and I have always been paid. So far .

    I do find it rather odd that someone would be willing to give you all 50% up front over the Internet sight unseen. I mean any high school kid can set up a decent looking web site, say anything they want on it, claim they have done so and so web sites and otherwise make themselves look credible and then ask for 50% up front.

    I would have thought most people would balk at paying that to someone they do not know at all.

    I don't think I could get 50% up front even from potential clients that see me in person in San Diego! People just don't trust each other these days. Especially in San Diego. It's like everyone treats everyone else around here like everyone is a scammer out to get something from everybody else.

    This assumes that you all have gotten this up front money from persons unknown to you or you to them over the Internet. Something that is just...well...hard for me to understand as to why people would do that.

    Carlos

  7. #7
    Join Date
    Jul 2009
    Location
    inside my own head
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    Default

    I've done the same 50% up front for big projects routine and had no problems. In some cases I've asked for full payment up front and usually had no problems. A few people walked away and found someone else because they didn't want to pay in full up front.

    If it's someone totally new to me that I don't already have a relationship with via a recommendation (someone recommended me to them) then I'll do at least a 50% up front request. My regular clients I am more than happy to finish first and bill them when I'm finished or at the end of the week etc...

  8. #8
    Join Date
    Aug 2009
    Location
    Pleasant Hill, Oregon
    Posts
    203

    Default

    I agree with the 50% up front. In some cases I require 100% non refundable. It depends on the service.

    One thing that minimizes the buyers hesitation is how well positioned you are, what kind of testimonials you have on your blog or website and how long you have been around. These all factor into the trust from the potential client.

    Kathleen Gage

  9. #9
    Join Date
    Jul 2009
    Location
    just outside Toronto, Canada
    Posts
    452

    Default

    As Kathleen mentioned, how well positioned you are, your testimonials, and how long you've been around will help build trust. It's the same with making a purchase on the Internet. Sometimes I'm willing to buy something from someone I don't know, but I do my research first and make sure there have been no complaints, etc.

    I've been paid 100% upfront to do ghostwriting for members of the warrior forum, and they didn't mind because I'd been around for awhile and they knew me. Think I prefer 50% upfront though. It helps your motivation knowing there will be more reward when you're done.

  10. #10

    Default

    Thanks for the added input you all. Much appreciated.

    The problem I have is that I have no testimonials to speak of (well my one large client would probably give me one but I cannot yet show the work I have done on the site...work he is very satisfied with...as it is a hush hush social networking site that has not yet gone live). I have also had some other one shot project gigs but never bothered to ask them for testimonials.

    Needless to say I will try and get some in the future as well as building up a nice portfolio page.

    But for now I have nothing to show per se other than my own site at www.carlosgonzalezconsulting.com

    So basically someone would be paying up front sight unseen so to speak. That may be a problem. I don't know until I try I guess.

    If any of you wouldn't mind reading where I ask for a deposit up front I would very much appreciate further input on whether the amount I am asking for and how I ask for it is reasonable.

    On my http://www.carlosgonzalezconsulting....uctory-special page I make the point inside the little boxes within the text that I require an up front $25 non-refundable deposit.

    Then on my http://www.carlosgonzalezconsulting....g-for-services page I go into why I ask for that deposit a bit more.

    I also may have a problem with the acceptable methods that clients can pay me through too. Not sure.

    Any and all input that anyone might care to give me further on this would be appreciated.

    Thanks.

    Carlos

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