Guru / Accounting / Payment Practices Credit Card Verification Fee
Hadn't used Guru in years but needed a specific IT specialist so posted a job ad. Most of the profiles seemed completely without merit but in the end I found one person out of hundreds and hundreds that submitted that actually worked out.. here is the problem... When I went to pay the freelancer invoice I had to add a credit card. In order to verify the credit card Guru wanted to charge a small amount to the card; I then have to enter the exact amount that was charged thereby I guess proving that I was the legitimate owner of the card. This is nothing new; I have done this on paypal and numerous other freelancer boards and did not think much of it. Usually the small charges are reversed within a few days.
There was no fine legal print and even on the "learn more" link there was very little additional info. I will add the exact text below.
So after a week I noticed that the amount had not been refunded. Emailed their support and found out that they do not refund the amount; they instead add it to your "cash account". The email went on to say that I could just log in and select the amount and transfer it back to my card... which I did. Here is the instructions from the email
" You can click on your cash account link to view the transaction. You can leave the money in your cash account to use toward future payments or you can withdraw the money and return it to your credit card."
So only after I performed the return transaction did it then tell me that I would incur a 3.5% transaction fee. It reduced the amount returned to my account by 3.5 % and BTW they said it could take up to 5 plus days or something to that effect to return the money. I emailed again asking for a full return of the money and they refused only saying that I could keep the money there and use it towards my next invoice. There are so many things wrong with this practice.
1. At no point in the process so they make clear the process of what is going to happen with the money.
2. You should not end up paying Guru just to verify your credit card
3. I have no intention of leaving the money there; I have not used Guru in years and will now never use them again.
4. When I paid the one invoice that I had added the credit card for their payment system did not indicate that I had a "cash balance" that I could apply to the invoice.
5. It seems like a minuscule amount...less than 4 dollars but think if they are verifying hundreds or thousands of credit cards per day and banking that money in what is essentially their account think of the cumulative interest they are earning and possibly the portion of the fees they are charging to return it. Seems like a hugely deceptive practice.
In many years of running a business where I have gone through this credit card verification fee process many times and have never seen a company handle it this way. In fact I went and checked another freelancer site I use, Upwork, and looked at their explanation of the verification fee... much more clear, fair and transparent to their users. See below for their text
This and also the quality of what I saw on their website I will not be using Guru again.
I will also be disputing the charges and reporting them to the state attorney general and consumer affairs (FTC). I encourage anyone else with similar complaints to do the same.
Below is the exact text when you add a card:
For verification purposes we will charge your card a random amount of up to $3.95. You will need to enter the exact amount on Guru.com to verify your card. Learn more
Learn More Screen:
Verifying your credit card:
Log in and view your dashboard.
Click “Payment Methods”.
Click the blue “Add Payment Method” button.
Choose “Add Credit Card” from the list.
Fill in the credit card details.
Click “Add Credit Card”
Check your credit card statement for a random amount charged by us. The amount will be less than $3.95.
Log back into your account.
Click “Payment Methods”.
Enter the amount in the field next to the blue “Verify” button.
Here is Upwork.com statement on credit card verification charges; much more appropriate:
When you add a credit card, the Upwork verification process may include the following charges, which would be automatically refunded to you:
$1.00 authorization hold – Upwork puts a $1.00 hold on your card to ensure the card number is valid. That $1.00 is a temporary authorization and Upwork does not actually take that money from your credit card. In most cases, this hold disappears from the account before you check the charges.
$10 credit – Upwork submits two charges that equal a total of $10. These charges will bill to your card and appear in your Reports tab in your Transaction History. Here's what happens to that credit:
If you have a balance due and you verify within ten days, it will be applied against your balance.
If you don’t have a balance or don’t verify within ten days, it will be refunded to you.
Important—If you don’t verify a billing method within seven days, any contracts you have will be suspended until you complete verification.
Depending on the card-issuer, it can take up to five days for the two charges to show up on your credit card account. Calling the number on the back of the card allows most users to verify in less than a day (and sometimes even less than an hour).
Upwork will charge your credit card in U.S. dollars only. Contact your card issuer for details on potential currency conversion fees.
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