A new article was just posted Transactions and Collections - How to Get Paid and Paid on Time Take a look. JimD

Well, i've been in the situation as well so i've learned to do business online with people you can trust and don't mind paying full or half before you start your work.    and you have to have information with the people you are going to do transaction with like name, email and address as such. make sure they are correct so that you can get back to them when you get any problems.    The internet is full of frauds and scamers so you have to alot carefull while dealing with money online.

I had some bad experience of not gtting paid before so I made it a point that no matter what I would ask at least 10 - 20% before I start any work if they dont like it then I dont bother to deal with them. There is one person that I do work without any down payment but I do get paid (sometimes over a month late) but I dont mind as he is the one who jumpstart my carreer in this online work. If the project is huge I often set a milestone that I expect to get paid if I reach that milestone. Doing production before I used to ask at least 50% to cover raw materails. So I believe you should calculate it how much is your raw material in an online business (hosting, electricity, rights and etc.) Just remember to be fair and a bit flexible. The customers also have doubts much like you do, will they pay and get what they pay for :) So bottom line meet half way and always maintain an open communication.

Had this problem also and I started charging a small non refundable fee that would cover the cost of the payment processors for those who downloaded your product (I did digital) and refunded.   Also ratted them out when I came across them in some forums....    

In our case, the type of products (digital downloads), and the relatively low cost make it difficult to justify the time and cost of chasing problem customers. Having said that, of course, by not chasing them, we are encouraging their behaviour in the future, so for us it's a difficult choice. To be entiirely honest, when someone says they didn't get the download, or they didn't like it, I refund them, write their name on a piece of paper, screw it up, throw it in the bin, and forget about them!

I would like to say that successful enterpreneurs who operate in business for a long time know the psychology of customers. I know one enterpreneur who studies a potential clients first, speaks and discusses important questions with them and create a working scheme. At the end of each conversation he makes a decision. He refuses from approximately 25% of potential clients in the end. Also, he takes upfron payment - 20% from the very beginning. He says that acting in such a way it is possible to avoid numerous problems in the future. So I think that after years of experience in your business field you will be able to see non-paying customers in advance.

I'd like to hear other suggestions as well because as of now, I just charge it to experience, although I've just had a few clients who didn't pay.

If you are offering online services you can also try to work via popular online job marketplaces. Acting in such a way you will get additional ammounts of new clients. It is better to work on guaranteed payment basis only. The advantage of job marketplaces is that they provide workers with guaranteed payment. However, due to high competitiveness you will have to offer services at lower prices. But your risk will be minimized signifficantly.

I would have to agree with the above mentioned. However, sales and business is all about forming a trust. Therefore, I think that you should only ask for about 15% and tell them why. I think that if they are honest and serious about your product, they will understand and pay promptly. Though, if you come and ask for everything upfront, it is in my own personal opinion and experiences that you will not yield the best results. Also, if you ask them for everything upfront and somehow can't product, even if you give the money back, it does reflect poorly in a way. Hope this is helpful.

I think that before to start doing any work you should ask clients to make some payments. For customer's convenience you can divide task performance and payment process on several stages. So, at the beginning of the process a client pays for the work assigned for the first page and when you perform the work a client pays for the next stage and so on. Akting in such a way you will be able to minimize risks in your business.