Obviously there is a big difference. I actually started with screenplays (with some mild success) partly due to hearing that as long as you have a good story, the grammatical errors won’t be a big deal. Well, that was not true. Maybe if a producer liked the story or I was already established but every contest I entered always came back with feedback about the grammatical errors. Even if I won or placed as a finalist, I always received critique on that. Very little is spelling error, it was more about structure, etc.

We may be talking about different services. I’m referring to a full read that usually creates a 5-10 page edit letter–no in-line editing. Or, perhaps we’re just working in different corners of the market. I’m around those who are freelance editing pre-query for writers hoping to traditionally publish their genre fiction, not the kind of rigorous editing a self publishing author would need, which should rightfully be much more expensive! It’s true that most people doing freelance editing at the lower rate/rigor aren’t doing it full time. It’s an optional step for those traditionally publishing, and the prices reflect maintaining access for those writers, I believe.
I was going to tell Blake that his figures are actually a little low. The EFA uses lower prices than Writer’s Market (which is what I use as a starting point for my pricing). Two tenths of a cent (.002) per word? That comes out to $100 per 50,000-word book. It’s a rare editor who can accurately process 50,000 words a day, so that would be dooming an editor to living off of about $50 a day. If an editor is earning such low amounts per book, then one of two things is happening: that editor has someone else to pay the bills (thus not needing a real income), or that editor is blowing through books far too quickly in an attempt to earn enough money to survive, and is leaving errors—in which case it’s pointless to hire that editor. Undercutting on prices is unethical and it hurts everyone in the industry. I would not trust that editor. Anyone who pays such low prices is exploiting another person, which is also wrong. Authors, be prepared to pay fair prices. Editors, charge enough to survive and don’t undercut the industry standards, because you’re causing harm to everyone in the field, including yourself.
I have over 25 years of cumulative experience as a technical editor, proofreader and writer. In addition, I can add another 8 years to my resume acting as the head of a corporate word processing division and also as an administrative assistant. I am an expert in the use of MS Office (Word, Excel, Powerpoint, Outlook), Adobe Acrobat and equation entry/editing using Word and MathType. I have extensive experience formatting and laying-out text for publication.
Hi Kerrie. Thanks for pointing that out. You’re right, there are some good ones on Fiverr. Me personally, I haven’t had good luck with it – actually quite rotten luck with it. However, in a hope to not deter people from Fiverr, but make sure they understand that “anyone” can just sign up to do it, they should be weary of it – but definitely not discard it. So, I’ve made some edits above 😉
You might hire someone for a proofread, but let the editor know that you’re open to hearing from him or her if the work needs a heavier edit. The editor would need to present you with evidence in the form of sample pages that showcase what’s needed—and your job is to make sure you agree. You want to feel like an editor’s edits are polishing your work and making it shine. If you feel dread or anger, or even if you feel misunderstood, it’s likely not a good fit. At the very least you want to share your reactions with the editor so they can respond or change course.

Regarding your last question, I know of no editor who gives a money-back guarantee for occasional errors that happen to slip through or for a different opinion by a later editor. I’m afraid such things are just the nature of the publishing beast. But by having a shorter portion edited first, you will get a decent feel for whether someone is the right editor for you, and will be able to be confident in his or her work on your entire book.