Escrow Problem

[Escudo]

Hello,

I want to know as a future webmaster, in what way should I control Escrow? I mean for example lets say a buyer has $100 Escrow on a project but for some reason the "Freelancer" didn't deliver at all or totally messed things up. So basically the project was a disaster and they BOTH complain to me. What should I do in this case or any other Escrow problems I might have?


Thanks

[Nu2PHP]

Things to consider:

1. Are you set up as a business entity that is safe from lawsuits (LLC or corporation)?

2. State clearly in your terms and conditions that your website is not responsible for the actions of users of the site.

3. Make sure that you clearly state that in order to protect users and providers, they (BUYER & PROVIDER) must have a written contract clearly stating the terms and conditions of their work together. This puts the burden of proof on their contract and not on your site. If they have problems and complain to your, you can recommend that they use an independent mediator to reconcile their problems. At that time you could put a hold on the escrow account until they settle the claims thru the mediator.

It is extremely important that you emphasize that THEY have their own contract!!!

These examples are just a beginning and I recommend you check out other sites to see how they handle the use of escrow.

[Peter]

Also, as an Escrow Agent you should have in place no opportunities for the buyers purchasing the service or products to refund or chargeback his payment to you - the Escrow Holder because that takes the "safe" out of Safe Escrow.

If you enable Escrow on your marketplace I would not enable any payment gateways. If you're running Escrow you should have a streamlined process where you are more interactive with your users listings as you are playing a vital role whereby you are the Safe Escrow Agent who will hold the purchasers money until the "seller" delivers in full.

This might be a process where soon as a service listing has become awarded, you follow up with everyone using your Escrow Service immediately to avoid delays and guesswork. I would collect the escrowed funds offline via Wire Transfer and/or Cash up front in Person and NEVER by Paypal and/or any other merchant gateway (IPN, Live CC gateway, etc). That is if you are using Escrow only. If you are not using Escrow it's safe to let your users pay you online your marketplace using the pre-configured payment gateways so you can earn revenue quicker by letting users pay you directly with their CC or Paypal on your marketplace to pay for a fee like a Subscription Fee, an Insertion Listing Fee or some Final Value Ending Fee.

It all depends how you want to do this and many ways it can be done :)

Regards,
Peter