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For a new website, he paid a deposit of $210 (30%). He looked through our porfolio, and got about 1/4 way through before saying "Awesome. Let's start!".

We for him 2 design images and he didn't like them, requesting termination. We sent him a 3rd design nevertheless, but he still didn't like it. We're willing to do another design at no extra cost, citing that based on his reaction to the portfolio we're capable of making designs he likes.

He still requests termination and is asking for his money back. I don't have much of a problem refunding up to 50%, but I do the programming and these were just concept designs. My partner, the designer, is against giving any money back at this point.

Here's my big concern: we don't have a clause in the contract on refunding the deposit. Yes we should, and we will now, but with him we don't.

So should the deposit be refunded?

Thank you

EDIT - based on the answers here, we're giving the deposit back. We did have a written contract, but we realize that we should define what what mean be 'Deposit' in the contract and clearly go over it during the first meeting. The style we've chosen is:

  • If either party terminates before we give them any work, then the deposit is refunded fully
  • If either party terminates after getting the concept designs, then they get a 25% refund
  • If they terminate after seeing the fully programmed site on our server, no refund is issued (since any designer can just look at the source and in most cases copy the site)

If anyone wants to critique that, we'd appreciate it. Nevertheless, we thank everyone for their answers

EDIT - The above is the policy we're going to adopt, not the one we had. We didn't have anything that covered refunds before.

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This new info changes things a little bit. You really did have a refund policy in writing - given this, the client was clearly asking for an exception. Your terms seem fair except for one item. The first bullet ("If either party terminates before") is probably not a good idea - you can have substantial work invested before releasing a draft. I'd probably replace the two first bullets with one stating that there is a 25% refund after project inception up until you release the full site. – user2757 Oct 15 '11 at 4:33
@Don Wallace. Sorry, I was not clear. We DID NOT have a refund policy. But now we will (following the above). You do raise a good point, so I'll talk it over with my partner. Thank you – user745434 Oct 15 '11 at 21:46

5 Answers

up vote 10 down vote accepted

Yes, just refund it.

You are going to waste more time and energy fighting it on top of a customer who is likely to be even more unhappy (and probably vocal about it), for $210 it simply isn't worth it. Chalk it up to experience and put the clause in your contract.

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up vote 4 down vote

In this, yes, you should just refund the deposit. Even on a ramen budget, $210 is not a big deal, and keeping 1/2 of that is even less of a big deal.

Use this as a slightly-expensive learning experience and update your contracts and clauses.

"Client agrees to pay 1/3 of total up-front as a non-refundable retainer. Initial funds cover the costs of creating sketches, mockups, and representative examples of anticipated finished works, and therefore is not able to be refunded should Client choose to terminate contract before final completion of the project."

Or, something like that, IANAL.

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up vote 1 down vote

Echoing everyone else, the $210 is very small compared to your reputation. You took it upon yourself to create a third revision after the client said essentially that the deal was off.

I would have stopped when the client said "stop" for a primary reason: this was an indication that he now does not have confidence that you can help him. It is rare that you can shovel in more work and prove yourself when the relationship deteriorates to that extent.

A bit of reasoning through the situation now:

Not having a written contract implies two things - one, you and the client have a lot of flexibility as to how you handle most disputes; two, statutory law ("the" law) kicks in when disputes arise that proceed to litigation.

A contract basically states what both parties agree should happen when a deal falls apart.

I don't ask clients to sign written contracts for a lot of copy work that I do. HOWEVER - and this is important - I am fully prepared to make them happy when a dispute arises, up to and including full refund. I accept that uncertainty as a by product of catering to clients who may not proceed if they are asked to sign legal papers for a relatively small project.

That is one rationale. If the money that changes hands is "big", then you should definitely use a written contract.

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up vote 0 down vote

Do yo have a written contract with this client? If so, what does the contract say about refunds?

If you do not have a written contract, refund his money and get a contract that your clients must sign before you start any further new projects. Misunderstandings are easier to avoid when everything is spelled out, in writing, in advance.

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up vote 0 down vote

This is a no-brainer. Give a full refund, thank them for their patience and apologise for not being able to help on this occasion.

I am not impressed with the idea of a weasel-clause to say deposit is non-refundable, as suggested by some. This is not good practice and any work done on refunded projects is just "cost of sales".

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I'm not impressed with the idea of a weasel getting a free consultation. I think a "no refund" or "limited refund" is needed. The dev's spent time creating mock-ups and what not. Who is to say that this "customer" won't still use those mock-up's? Time is money. – WernerCD Oct 13 '11 at 19:50
In the freelance business writing sphere, a project down payment of 50% or so is standard, and generally, refunds are never given. In the OP's case, it is entirely possible that the client is going to take the conceptual work and shop it out. You just don't know. But lacking a written contract makes the OP defenseless. Also, the famous consulting expert Jerry Weinberg has a standing policy: he will refund a consulting fee in full if the client writes a letter to him stating exactly why the refund is being requested and why they are dissatisfied with his work. – user2757 Oct 13 '11 at 22:08

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