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Thread: The Consumer Protection Act in regards to deposits for services rendered .

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    The Consumer Protection Act in regards to deposits for services rendered .

    Hi all ,

    I am a web designer / developer . My concern is that when I meet a new client we discuss the website they are looking for and we discuss pricing . I then draw up a contract and ask for a 50% deposit before I start doing the work . I then keep the client updated on the work I am doing and give them access to the website as I build it . I am always worried that once I have completed the site or get halfway they turn around and say they dont want to use me anymore for whatever reason ( even after having been in agreement with the work up to that point ) and then demand the deposit back . Can they do that , If I have put so many hours into developing the website to that point , Do i then just have to hand over the deposit and lose the time I have put in . What does the consumer protection act have to say about this sort of situation ?

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    Difficult one this one, but personally I would not pay 50% deposit to a web designer, due to bad experiences. I will tho pay them the 50% deposit once they have set up my site before it goes live, so that I can see if we are both working on the same page.

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    I don't think you have a concern. The deposit you are referring to is a prepayment or down payment. Its not a deposit you make to a bank or against an item you hire. If you are worried, change the wording to say "50% payment upfront". That will remove any ambiguity. Mention too that it is not refundable, if that also concerns you.

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    Mention too that it is not refundable
    So if I pay a person to do work and give them a "non refundable" deposit, I will not get it back if the work they do is terrible ! I would NEVER do that - what protection does the customer now have ?? That goes directly against the Consumer Protection Act.

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    Quote Originally Posted by HR Solutions View Post
    Difficult one this one, but personally I would not pay 50% deposit to a web designer, due to bad experiences. I will tho pay them the 50% deposit once they have set up my site before it goes live, so that I can see if we are both working on the same page.
    Thank you for the reply , I have also had bad experiences with clients before we started asking for deposits . I would do a whole lot of work and get most of the site done only yo be told they do not have the funding available and would contact us when they so .

    I have a portfolio of work done and clients always play an active role in the development of the site from day one . As I said we always post live updates for them to check and any changes required are done in the development phase .

    I have not had this problem before where someone has asked for a deposit back , But it does concern me .

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    Quote Originally Posted by BusFact View Post
    I don't think you have a concern. The deposit you are referring to is a prepayment or down payment. Its not a deposit you make to a bank or against an item you hire. If you are worried, change the wording to say "50% payment upfront". That will remove any ambiguity. Mention too that it is not refundable, if that also concerns you.
    Thank you for the advice .

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    Quote Originally Posted by HR Solutions View Post
    So if I pay a person to do work and give them a "non refundable" deposit, I will not get it back if the work they do is terrible ! I would NEVER do that - what protection does the customer now have ?? That goes directly against the Consumer Protection Act.
    I agree , There should be protection for the customer but in the same way should there not be some sort of protection for the supplier also . I do not want to do a major part of the site and then be told they cannot afford it anymore or they do not want a website anymore . I think my work is good and I take pride in what I do . If a client is unhappy with any aspect of the site we make the changes until they are happy.

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    KevinW, from a web designer / developer position, make sure your contract is perfect and make sure they sign it BEFORE you do ANYTHING.

    From a client position, do your research. Make sure the web design company can do what you want them to do and make sure you explain everything BEFORE the project starts. Don't inform them of an entire new page you want designed on your website when the project is already half way done. This will ALWAYS result in extra fees, well at least if you deal with a proper digital agency.

    People will always want their business to get the better deal and if they have to moan and complain to get an extra widget developed for their website, they will, they will often threaten you and attempt to get their money back so they can try their luck with the next company, why, because they don't understand the process of web design, they don't understand that every little thing takes time and if the initial project spec didn't indicate a task, then it's not included in the initial price. Be thorough with clients, don't be scared to tell them something that might scare them off, tell them exactly this is what they are getting and if they want ANYTHING more then they have to pay for it and if any client doesn't want to pay a 50% deposit, put down the phone, walk out of the meeting, because they will waste your time. Imagine going to an architect, telling him you want plans drafted for a new building and you tell him you won't pay a deposit... He'll laugh at you. Make sure they understand that it's a service and you are spending time and resources to create the site, you're not selling them a product that they can return.

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    Another thing KevinW, way back when I started a digital agency, we had an incident with one of our first few clients. We drove over 100km's 4 to 5 times to go meet with him (he was aware of this but insisted we come). His project wasn't even worth more than R4k. We completed the website after way too many itterations, back and forth for over 3 months. As we just started out, we had no legal contracts that we made our clients sign. We asked for a 30% deposit before we started, he paid it. We finished the project on our development server so he can view the website there before we made it live on his domain. He signed the project off and told us to go live. We asked for the remainder of the payment and he paid. We went live. After 3 months of the website being live, he randomly whatsapps me and says this is not what he wants and he wants his money back and the website taken down. I laughed, my partner laughed, we never spoke to him again.

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    Quote Originally Posted by HR Solutions View Post
    So if I pay a person to do work and give them a "non refundable" deposit, I will not get it back if the work they do is terrible ! I would NEVER do that - what protection does the customer now have ?? That goes directly against the Consumer Protection Act.
    Its quite simply not possible to arrange payment to happen exactly as the work is performed and as required. Its too complex and too open to personal opinions. So every deal becomes a negotiated trade off. In this case "non refundable" means that the customer is committing to the job and won't change their mind. If the work is out of spec, then that is something totally different. In any event, if you pay anything upfront to a dodgy and useless designer you will not see a cent back regardless of how the contract is worded.

    Its up to the customer to research the vendor so that "terrible" work is unlikely.

    I sell products not services. For new, unknown customers I expect payment before I release the goods. Is that not effectively a 100% "deposit". If the product fails I will refund them because I have a reputation to uphold in the industry. If they change their minds, they can return standard items. If they change their minds on an item that has been branded for them and can't be resold to someone else then I will not take back the product nor refund them.

    I am not sure how recruitment works, but how do you handle a new client who decides to no longer employ a successful candidate after you have spent hours, perhaps weeks meeting possible candidates and researching their backgrounds? Its a very specialised job so you could not pull the info off your existing database.

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