Suppose you have a client with whom you have a one year agreement and the client has paid a deposit. But suppose after a period of time during which work was done, the client stopped using your services. You've called the client on the phone, tried email, tried fax, even sent snail mail and simply can't get any kind of response. Meanwhile you have a substantial sum of money in an escrow account containing the client's deposit.

Then one day the client calls and tells you they no longer need your services and would like a refund.

The agreement has a refund policy. What it doesn't have is my scenario: services were provided several months which means the deposit has been reduced. A couple of months go by without any projects of any kind. Finally, the client wants a refund.

My questions: In computing the amount owed to the client, how would you cover the months for which you were ready, able, and willing to provide your services, but the client, for whatever reason, didn't take advantage of that fact.

Would you give him a refund that includes those month?

Would you deduct a portion that would be equal to what you probably would have used for those months if you had done work.

Would you deduct a smaller portion that would compensate you for those months but the client would be given a lot more than the client might get if it was totally equal?

Would you return an amount that has been reduced by whatever dollar figure would cover the hours not used?

My reason for this question: Technically, my agreement commits me to clients for so many hours a month--even if clients don't use me. So I might not be able to commit to another client unless a potential client needed one-time projects done.

Thoughts?

Alcva,

(Kindly sign your posts and complete your profile...so much nicer when we know who we are responding to! Thank you!)

You bring up enormously interesting and important questions.

Really, the only way to rectify this in your favor is to have had stipulations in place before accepting the deposit.

In my own contract I have a stipulation that if the client no longer requires my services, I must be notified 30 days prior to the termination date. At that time I then use the deposit for the last month's billing or I bill for the last 30 days and then return the deposit on the last date of service.

This gives me time to 'fill the slot' with a new client and/or gives the client time to find a new VA if applicable. It is also sets a more professional tone because then I don't appear so 'disposable'. This policy also encourages respect by both parties.

In your case, where you have no termination stipulation in place, you would need to return the deposit minus any time you spent on the client's account and then call it a day. There is really nothing more that can be done.

In the future, if you find that a client is not communicating with you, then that is a red flag to try to fix the problem or cut the client loose. Otherwise you could be wasting your own time 'waiting' for the client to contact you instead of utilizing the time to either market your business or work on other paying client projects.

Every time something like this comes up then it is time to revise your contract so that the problem does not happen again.

Janine

__________________
WRITE FAB RFP PROPOSALS & land THE VA job. WinningRFP unveils soon! SignUp www.WinningRFP.com

This was a purely hypothetical situation. It was something for which I have been giving some thought as I write my agreement. I am including both a termination time frame and a deposit.

About what I can't make up my mind is when I have a substantial deposit but there are no assignments coming from a client, what should I plan to do.

Forgive me, but I think you may have misread my query.

As far as signing a post, again, forgive me, I often forget a signature. My profile is where the rest of me is at: in the planning stage.

Thanks for the point of view. I appreciate it.

A L Camien
www.office.com

Al Camien,

When you have a deposit and there are no assignments coming in, you place in your contract that if within 30 days, no assignments come in then the contract will be terminated and the deposit returned.

But really what needs to be done beforehand is to receive a list of services that the client wants. I wrote about this here in my blog post, 10 Things You Need to Know Before You Search for a VA.

One of those tips is to ask the client to create a list of services broken down into 3 categories. It is from this list you as the VA can plan how and when to complete the projects. Therefore, you will have a list to from which to work and not rely upon a weekly assignment list.

You would also want to call the client at some point (with an appointment of course) to discuss what the communication problem might be. Perhaps you can communicate assignments some other way than with email. But really, the issue is to explore why a client would hire a VA, pay and then not utilize the services. If there is no resolution then you decide how best to handle this further.

I wrote a blog here, Need to Salvage a Client Account? 5 How-To Tips for Virtual Assistants
which offers answers to dealing with non-communicating clients.

Did I misread your inquiry?

You want to know how to refund the client. I explained how to refund the client in full. And I made suggestions how to resolve that for the future. I'm not sure what I missed but I'll be glad to clarify if you need this.

Good luck to you and your business.

Janine

__________________
WRITE FAB RFP PROPOSALS & land THE VA job. WinningRFP unveils soon! SignUp www.WinningRFP.com