Why do payouts have 10% deducted?


#1

I’m sorry this is a bit of a sticky subject. I’m still quite new to the platform and I think I’ve read everything I can, including all of the FAQs and I’ve looked back through these threads on the forum.

I don’t understand why 10% of our winnings are deducted.

If a contest holder pays $599 to run a contest with a prize of $300 to the winner, then SH has already (quite rightly) taken 50% of the CH funds to pay for administration costs. Taking a further 10% of our winnings smarts a little.

Paypal fees are 2.9% not 10%.

Also, I feel it’s very misleading. If I win a $300 contest, I’m not getting $300, I’m getting $270. It should either say the prize amount is $270 or you should stop taking fees.

Again, I do apologize for raising a difficult question publicly, but I haven’t found the answer to this question anywhere else.

Also, this is a genuine question, I’m not trying to cause any trouble nor am I making a dig at SH. I truly think this a fantastic platform that has given people like me a great opportunity. I’m very grateful.


#3

Why does Squadhelp charge 10% fees for Payouts?

The 10% transaction fees covers several things, including:

  1. The administrative costs to hold the Contest Holder awards in an Escrow account.

  2. Transaction fees associated with the payment gateway transactions (note: the award amount collection from customer, as well as payout to the creatives both involve payment gateway charges).

  3. The payouts in case of Guaranteed contests even if the CH money is refunded. There are many situations (such as Credit card chargebacks) where the money is refunded back to the Contest Holder. Unless it is a fraudulent payment, SH does not ask Creatives to refund the money in those situations. The 10% helps cover some of these expenses, even though majority of such costs are covered by SH.

Squadhelp spends significant amount of marketing money to find customers to launch contests on our platform. We also continue to make significant investment in our platform and support resources to ensure that we continue to offer a best-in-class experience. Therefore, it would be incorrect to assume that we keep 50% of the contest payments as profit. Every business model is unique and in our case, the 10% transaction fees are an important component of our business model. While we are transparent in mentioning these costs on many sections of our website, if you feel it needs to be explained more clearly upfront, we will certainly consider adding more explanation throughout the site.


#4

The following is my personal opinion. I don’t think I have ever seen an actual layout of why SH charges us 10% so that is why it is just my opinion.

SH created a platform where I can log on and make money. They answer my questions 24/7, they handle problems, they listen to us when we ask for changes, they handle our payouts promptly and I don’t have to pay Paypal fees. So 2.9% of that is Paypal fees and the remaining percentage is for all the rest. SH invested in the technology to make all of this possible and I didn’t have to do a thing.

Sure, I’d love to have a lower fee. Who wouldn’t? And we have asked them if it is possible. But the bottom line for me is they were here, ready to serve me and I didn’t have to lift a finger or make an up-front investment. Frankly, SH is better than my bank when it comes to service!

This isn’t meant to offend you, Able, but it is a perspective worth considering. Start-up companies have to figure out how to make the finances work. And we are customers buying into their software and contributing our time. So, nothing like that comes free.


#5

I kind of think of it as an entry fee, only better because you only pay if you win! :slight_smile:


#6

Thank you for the explanation @Grant and I’m not offended @Commulinks. I have my own business, I understand the costs involved and I’m not questioning the costs.

I feel the amount we are winning is misleading. I’m not winning $300. I’m winning $270. Perhaps the contest prize amount should reflect the real amount.

Edited to add… Please accept this as constructive criticism.

When I won my first contest I was absolutely delighted to win $100. When I realized it was only $90 it really took the wind out of my sails.

  1. The amount in the top right hand corner of the contest page says $100.
  2. The pricing page for CH says ‘prize to winner - $100’ (http://www.squadhelp.com/pricing.php).
  3. The ‘sign up to be a creative page’ http://www.squadhelp.com/views/pages/become_creative.php were it says How much can I earn if I win a contest? Most of our contests typically have an award amount between $100 and $300. Some contests may have a higher award amount.

At no point prior to winning a contest was I made aware that 10% of my winnings were going to be deducted and even the CH had been told that the winner would receive $100.

I feel deceived. (not a good user experience)

If I had been told I was going to win $90 and I won $90, I would have been absolutely delighted to win $90. (a great user experience).


#7

@AbleBrands If you look in the FAQ’s page. You will see links for most answers a creative or CH needs.
If you go down the list you will find a link for:
Creatives - Getting Paid - Everything Creatives need to know about payout. There is a link called “How do I get paid?” where the fee information is written.
Fees Associated When Withdrawing Award
As a contest winner, you can withdraw money from your account at any time. We will process the withdrawal and deposit the money into your PayPal account within 2-3 business days. You are charged a transaction fees of 10% of the total balance being withdrawn. For example, if you win a contest for $100, a $10 administration fee will be applied (and $90 will be deposited into your PayPal). This administration fee covers the cost of our payment escrow as well as processing of payment transactions (initially from the contest holder and then to the winner).


#8

I think this is common things when you’ve used any crowdsource platform. SH also clearly state that a 10% fee will be deducted for any winning prize amount (i dont have the link though). Otherwise, its their business decision not us.


#9

I would generally not share this… but I was hurt in 2002 in a work accident…then in 2003 had a near fatal car accident,which between both, left me unable to return to work,as it left me with a permanent disability. It has been a struggle trying to find a way to generate income that I can do from home, and adapt it to be able to do when I am feeling well and able,but not have to do on days I am not doing so well. I can also work in the middle of the night if I am awake,early morning, or when ever it suits me. I can go days or weeks without contributing at all, with no penalty.So to me…the opportunity to try to generate any income in my circumstances is a blessing. Nowhere else I know of,do I have a chance to be able to win some money on my time schedule,and where I can choose to participate or not.So to me, a 10 % fee is no big deal, for what I get in return.Every dollar I make here, is one dollar I would not have had before, and is a great help to me.Just my perspective.


#10

Guys, I’m really not questioning the actual costs, and I too am VERY grateful for this site, genuinely, very. Not only that but I love it, I love taking part in the contests and I love the general camaraderie. It’s a great place to be and I love being here. I have recommended SH to many people, both contest holders and creatives, and will continue to do so.

I’m questioning the way the ‘prize amount’ is advertised both to the contest holder, and the creative. I feel it’s deceiving and wanted to share that with SH. If we’re told the prize is $100, then we should receive $100. Not $100 less xx% to cover admin, transaction fees and fraudulent payments. The definition of a prize is to reward to the winner of a competition/contest, not to reward the winner of a competition/contest less xx%.

When I win, I feel aggrieved that further admin costs are deducted, whereas if I had won a lesser amount but received it all I would have been delighted to have won.


#11

Look at it like winning a lottery… The lottery may be one million dollars and its advertised as a million dollar jackpot. But unless you take payments over a long period of time,one million is not what your going to receive. It would be more like half.[quote=“AbleBrands, post:10, topic:2272”]

When I win, I feel aggrieved that further admin costs are deducted, whereas if I had won a lesser amount but received it all I would have been delighted to have won.
[/quote]


#12

I don’t know anything about US Lottery rules (I’m not from the US). The FTC acts in the interest of all consumers to prevent deceptive and unfair acts or practices so I’m sure there would be enough ‘*see full t&cs’ next to every mention of “One Million Dollars” in the Lottery advertising and tickets.

The FTC Act prohibits unfair or deceptive advertising in any medium. That is, advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that’s not true.


#13

If you read the Creative Starter Links when you joined, you would have seen the 10% fee that is deducted in the How I get Paid Link? All the rules and fees have all been laid out for you before you entered your first contest. Then you could make an informed decision for yourself. I don’t think there is false advertising here. In the US most contest have disclaimers that read in part additional taxes and fees may be applicable.
Hope this doesn’t come off as sounding mean its meant to be helpful :slight_smile:


#14

I see both sides of this. I don’t think Squadhelp is being deceptive about the award amounts, but when I won my first contest, I was surprised about the fee, too. Somehow I missed reading that part when I joined. No big deal, I just looked for an explanation and found it in the help section. But surely it wouldn’t hurt to display the policy a little more prominently, perhaps as a popup when you enter your first contest? Just so no one say “I didn’t know.” I mean, it’s not going to affect participation either way. If someone told me. “If you break this $100 bill for me, you can keep $90” I would still take it, wouldn’t you?


#15

I get it. I think a lot of creatives are so excited when they first join, that they don’t look at the CH starter pack before jumping headfirst into contests. Which is fine. But I do think reading them would alleviate the amount of questions on payout, points, etc being asked and answered multiple times in forum and in messages to the SH team. Especially since searching on the forum will bring up all threads past and present, which in turn could become very confusing to the newcomer. Just in case ayone is interested, here’s the link to all the information packs.
http://helpdesk.squadhelp.com/


#16

@Grant Maybe a pop-up with a link to the helpdesk when someone first joins would be helpful


#18

I really appreciate all of your comments. Genuinely. Thank you.

But don’t you think my thoughts should run along the lines of the law?

The Federal Trade Commission Act expressly prohibits unfair or deceptive advertising in any medium. To list a ‘prize’ of $100 should mean the prize is… $100! I understand that SH could send $100 and paypal/bank could deduct their charges from that. That would still be in line with The Federal Trade Commission Act, because the amount sent would still be $100.

But to list a ‘prize’ of $100 and to deduct a percentage to cover admin, transaction fees and fraudulent payments is NOT in line with The Federal Trade Commission Act.

I’m expressing how I feel. I feel that I have been deceived… each contest lists a prize of $xxx, yet $xxx is not what we receive, we receive $xxx less 10%.

I feel very alone with this view, other than a few supporters confirming that they too were unaware of the fees initially and some ‘likes’ of my posts. But I’m going to stick to my guns, the FTC is explicit in their terms of what is deceptive and what is not. Listing a prize of $100 but paying out $90 and keeping $10 to cover admin fees is deceptive no matter how you look at it.

I have no intention of falling out with SH, I love it here. I’m trying to express my view fairly and openly without confrontation. I hope my view is taken without confrontation and just as the honest view of a creative member.


#20

I dont pay attention to much but i did notice the 10 % fee. I chop it up as a small price to pay for being able to A. Expend our pent up creative energy, B. Help someone that has done so much in other aspects of their business and in comparison our job is little & C we dont pay here to make money. On other sites u pay whether you make money or not, and here they only charge if you win. And i didnt even think about the covering guaranteed contests that the CH are unsatisfied with. Im just glad they dont charge us to be part of this site. Thats just my opinion on the situation as a whole not what anyone said…Good luck creatives.


#21

All of what you said assumes that the 10% fee is not disclosed, which it is. The FTC would be able to find that information in disclosures from SH.

And…If you are suggesting that SH should change the prize amount listed on a contest to make it more clear, then that is suggestion to address with @Grant and @Dan.


#22

Thank you everyone for sharing your feedback and thoughts on this topic. It is important for us to hear everyone’s feedback so that we can continue to improve our platform. Even if one creative feels that they were surprised to see these fees, that tells us that we have work to do in making the information more clear, and upfront. Even though these fees are covered in our Terms of Service as well as the platform policies, it is a good idea to make it even more clear so that there is no room for surprise. We have noted this feedback and will work on adding more information about these fees during the creative on-boarding process.


#23

I don’t want to be involved in this because I have no issue with the payout system. But some on here have to remember every country is different. Here in Australia we don’t pay sales tax at the checkout and we don’t have tax on and winnings, it’s classed as a gift and gifts are exempt. So it could be confusing or misleading to some.