Help Solve the PayPal Freelancer Crisis!

by Rico on March 4th, 2008

A Call for Help

When I wrote about Cara Williams’ unfortunate encounter with an unscrupulous client, and PayPal’s apparent nonchalance about the whole matter, I never imagined that my post would generate some useful feedback. Among all of the informative comments, Kimberly James had this to say:

Hi,
I wanted to let you know that I just had a talk with paypal. I told them about how we all were talking on the blogs and sites about our dilema, and the person I spoke with said they were always interested in new solutions. I told her that we needed to come up with a way to protect designers.

Since we are selling a service, and not a tangible, trackable object, and clients can submit claims or withdraw payments with no issues, and she stated that we all should get together and come up with a different solution for ourselves. She said that they understood our issues, and asked if we could come up with a way for our business to work with their product and submit it to them.

I think this is a good idea, and we all should do it. This is the second time that a client has either found a cheaper designer, or just tried to get money back after the work was completed, and filed a claim and really messed me up. We need to jump on this and throw ideas their way.

My Thoughts on the Matter

In both the case of Cara and Kimberly, there was no clear way to prove that the seller (i.e., the freelancer or contract) had delivered the required goods to the buyer (the client). This is especially hard because of the intangible nature of creative work.

But I think this is possible, if the freelancer maintains a record of all their interactions with the client. All chats, emails, and maybe even IP calls should be recorded.

Create a Clear Record of Project Progression and Delivery

For that to be effective as a record of delivery however, the freelancer should divide the project into distinct stages. A blog theme design could be divided into the creation and the submission of the mockup, and its integration into the blog platform. After each stage, the freelancer should require the client to give their clear and unmistakable approval of the work.

This doesn’t necessarily require being rude. A simple “Great! So are you satisfied with everything at this stage? If so, please let me know, so that I can begin the next step immediately. I’ve fulfilled the requirements as follows: (a list of the current stage’s requirements, followed by detailed descriptions of how you’ve accomplished them, goes here).”

By giving a lot of details on how you’re accomplishing the end of the deal, you create a very clear record of delivery once the client agrees with what you’re saying. Even a simple “Yes, please move on to the next stage” could already be considered as an acceptance of your accomplishment, which represents satisfaction with the delivery.

Break Up the Payments

As mentioned before, the freelancer should divide the project load into clear stages—and require payment for each of their accomplishment, not when everything’s done. The classic half-now, half-after works, but that risks losing you 50% of the promised payout.

Receiving multiply payments for a project ensures that you will get something for your work, and makes it harder for an unscrupulous client to cancel the payment. Backed up by your clear record of delivery, the series of payments becomes that much harder for someone who can’t keep their word to withdraw. Especially if PayPal adopts my next suggestion.

Change the Rules for Intangible Products

It is clear that what works for transactions involving tangible items might not work for what’s less concrete. PayPal needs to realize this, and make certain provisions. They should continue applying the buyer protection, because it is a genuinely useful feature that makes it harder for a fool and their money to be parted. At the same time however, they should be willing to review any information that the freelancer can provide to back up their claims of successful delivery, as well as forward these to the challenging buyer’s credit card company.

Those are my thoughts on the matter, but they’re hardly the final world. Feel free to send your ideas to Kimberly, fellow freelancers. You can also help solve the PayPal freelancer crisis by leaving a comment below.

b5media.com

Contract Worker - Freelancing Experiences