Elance - Escrow Services, Work Tracking Systems and Payment Guarantees
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The Elance Fixed Price Work Guarantee
Elance offers what it calls its “Fixed Price Work Guarantee” on flat-rate projects. In order to qualify for the guarantee, the project must use escrow, and both client and contractor must adhere to all standard Elance procedures over the course of the project. As a freelancer, you must work only on milestones that have had escrow funded, communicate on Elance (so there’s a record of communications), submit weekly status reports, and use Elance for all deliverable work product.
So, what’s the guarantee? That’s the problem: the Fixed Price Work Guarantee doesn’t actually seem to guarantee anything at all, at least for contractors. It sounds like if you follow Elance’s rules and policies that you’re guaranteed to get your money, but that’s not actually the case. Nowhere does Elance actually say that you are guaranteed to be paid.
This guarantee-that’s-not-a-guarantee underscores some of the general concerns associated with escrow on Elance. There’s no doubt that it is better than working before payment with no escrow system. For its part, Elance has enough faith in its escrow system that it goes so far as to claim that the use of escrow means that contractors don’t need to ask for advance payments from clients. But the bottom line is that even if you do everything exactly right, the client can refuse to release escrow, which means the client has your deliverables and you don’t have your money. The only recourse you have is to use Elance’s dispute resolution process, which is far from perfect.
These valid concerns shouldn’t scare you off using Elance’s escrow system; I personally did over 150 projects this way and only had a couple of minor issues that were peacefully resolved. But do be aware that this “guarantee” really isn’t one.
The one area that Elance is clear that this guarantee does provide protection is in the event of a chargeback. If you follow proper protocol and are hit by a chargeback, Elance will not come after you for the money.
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Last Site Update: October 21, 2011
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