Chargebacks: The Biggest Setback Of Your Freelance Career?

You’ve decided to enter the wonderful world of freelance. It’s going to be great, right? You’ll be your own boss, set your own hours and only create work that makes you proud. While freelancing can be a very rewarding and versatile career move, it has its bad moments, just like any other job. Freelance work is inherently risky. When you have a salaried position, your company will pay you on time every month. Any issues with client payments are dealt with the finance team, or at the very least, won’t affect your pay.

When it comes to freelancing, however, that simply isn’t the case.

Chargebacks Are Your Responsibility

If you encounter a chargeback as a freelancer, the only person that will have to deal with this problem is you. If you’re not familiar with chargebacks, allow me to explain. A chargeback occurs when a client contacts their bank after making a credit card payment and disputes the charge. After this, the payment you have received will be taken out of your account. To make matters worse, you have to pay a fee as well.

Since chargebacks are, at the very root of the process, an act of consumer protection, the burden of proof lies with you. It is kind of the same idea as innocent until proven guilty; unless you can prove –without a doubt – the chargeback was unjustly filed, it will not be reversed.

The Good News For Creative Freelancers

If your freelance work consists of something creative, such as design or copy, you do have one benefit that shouldn’t be ignored. Any time you create something, you automatically own the copyright for it. This means you own the copyright until you have been adequately compensated for it. If you designed a website and the client filed a chargeback, he or she has not adequately compensated you for your work. Technically, you still own the copyright and the site owner is in violation of those rights.

Usually, by notifying the client of these copyright violations, he or she will probably be willing to reverse the chargeback. That option is preferable to getting their entire website shutdown permanently for violating DMCA.

Some Tips

No matter what type of work you do, there are several ways you can reduce the risk of chargebacks.

• Make sure you document everything. You need to have, in writing, what work you are expected to accomplish, what your timeline is and how much compensation you are to receive.
• It’s also very important that you meet your deadlines. You may be subject to a chargeback if the customer feels your promises were not met. If you deliver a project late, then they have a good reason to dispute the charge, and it will be difficult for you to prove otherwise.
• Look for warning signs. If someone isn’t willing to put down a deposit for your work or sign anything, you should back out immediately. Scammers usually follow certain behavioral patterns. If you can spot them, they will be much easier to avoid.

Be Ready

Working in freelance means you are your own boss. That comes not only with increased freedom, but also increased responsibility. Chargebacks are one of the issues you’re going to have to learn to deal with. If you’re not careful, you can lose a lot of money from chargebacks. Do your best to prevent chargebacks from happening.

If you do get blindsided by one, be sure to instigate the representment process immediately. Stick up for your rights. You definitely won’t get the money you deserve if you aren’t willing to fight for it!

Guest author Bio

Suzie Gray is a freelance writer. She recently had to navigate the chargeback process when she came up against a shady client. This process was challenging - now Suzie wants to help fellow freelancers avoid the same fate.

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