I'm an experienced designer freelancing part-time. My client has been causing me stress. I've already put more hours into the logo redesign than agreed yet I've stuck to their low budget. The final version has been delivered, but they're wanting a refund because they're unhappy with the design. I just want to be done with it.
This designer isn't a With Jack customer, nor do they have insurance. But their experience of an an unhappy client wanting a refund isn't uncommon. How do you deal with clients that want a refund?
Every freelancer—whether full-time or part-time—will at some point experience a project that doesn't go to plan or a client that isn't easy to work with.
There were some red flags in the above project;
- Low budget
- Endless revisions or scope creep without payment
- No contract
Projects with red flags are usually an indicator something is going to go wrong. But even with proccesses in place to protect yourself (like working with a contract, specifying the number revisions etc), some client relationships just don't work out.
The question is, how do you handle clients who want a refund?
Have the confidence to say "no"
As an ex-freelance photographer I've been in this situation myself. I delivered work to spec and co-operated with the client to reach a compromise. I suggested trying different edits or compositing images to get the result they wanted.
It didn't matter what I suggested. The client just wasn't happy. They didn't like my photos.
If I wasn't insured I'd have surrendered to their request for a refund. With my confidence dented I would have then scrambled to find another job to make up for my loss.
Fortunately I was insured and this changed the way I handled the situation. It gave me the confidence to highlight that I'd fulfilled the brief and had been co-operative with my client. There was nothing else I could do so I would be retaining the money I'd earned and wouldn't be completing any further work.
Having the confidence to say "no" to a client is an everyday benefit of being insured. Insurance gives you the conviction to say, “I’m sorry you're not happy, but I delivered the work that was agreed and I've delivered it to a high standard. I'm not sure where else we can go from here”.
One of two things is going to happen. The client is either going to walk away or take things further. If the client decides the only way to go from here is to take things further by involving solicitors, your professional indemnity insurance would be triggered.
Now you have legal experts to step in and negotiate with your client, helping you handle whatever the situation throws at you. You've got a team of experts on your side rooting for the best outcome for you.
In our experience the client usually backs down because there's enough evidence to show the freelancer isn't in the wrong, and most people don't want to go to the lengths of fighting it. It helps to have a statement of work and contract so you can highlight you've fulfilled the duties expected of you. It's very difficult for the client to argue against that.
Have the confidence to say "no". Being insured means you can have client confrontations without suffering the financial consequences.
Don't offer extras or added frills
Most of us hate the idea of having unhappy clients. It's tempting to throw in a 'freebie' if a client is asking for a refund to appease them.
"I'm sorry you're not happy with the photoshoot. How about I re-shoot it for free?"
"I'm sorry you're not happy with the website design. How about I discount the logo design?"
Don't do this. Being a good freelancer is all about setting boundaries. Offering freebies puts you in a vulnerable position because it implies you feel you haven't delivered the work that was originally agreed.
This gives your client ammunition to demand a refund, pursue things further or guilt trip you into doing extra work until they're happy. The latter could lead to hours of unpaid work and impact existing, paying clients, not to mention your mental health. Basically it's a can of worms.
It can also render your insurance void because the insurer may see this as you admitting liability. Insurance policies specifically state you must not admit liability so that your insurer is in the best position to defend you.
Have the scope of work written, agreed and signed
We talk about the importance of the statement of work a lot at With Jack, and that's because its role in determining how a project goes can't be undermined.
The project spec and terms you agree with your client will lay the foundation of what duties are to be expected of both parties.
Fulfilling the scope of work and working to the terms you've agreed with your client means you can prove you've satisfied all conditions therefore a refund isn't due. You can refer to the contract to show you've completed the work to spec and within the agreed timeframe. The client therefore has no basis to request a refund.
Having everything in black and white helps to put arguments about refunds to bed.
How do you handle clients who want a refund?
- You need to have to have the conviction to back yourself. Don't let your client bully you
- Get insured. This will give you the confidence to say "no" to refund requests and stand up to clients when they're being unreasonable
- Avoid the urge to offer extras or freebies. Whilst it's good to be seen as co-operating with your client, offering freebies or extras leaves you vulnerable in many ways and might lead you down a rabbit hole of hours of unpaid work, and void your insurance.
- Terms and agreements, statement of work… having everything in black and white means you can refer to it to show you have fulfilled your duties and a refund is not due