How to Handle Refunds and not Take HUGE Losses?

[toddperk]

Hey Warriors,

I'm planning on doing a big product launch here in the next month or so...

A question came up in my head that hasn't been addressed yet thru my studies.

Suppose I am selling a $497 product and a JV partner/affiliate sells my product at a 50% commission...so I give him nearly $250 but then the customer wants to take advantage of the 60 day money back guarantee.

Obviously I have to refund ALL of the money ($497) to the customer which would leave me at a loss of $250 because I also had to pay off the affiliate, no?

Or do I not pay the affiliate until the 60 days are up?

Does 1shoppingcart.com handle these types of rollbacks/losses?

Thanks in advance.

Regards,
Todd

[TimGross]

Coincidentally, I've previously sold a $497 product with a $250 affiliate payout. I spelled out that if someone refunded, that affiliate lost the commission, and in almost all cases, "real" affiliates were able to make a sale in the future to "pay off" the $$ they owed after there was a refund.

I put "real" in quotes because a few times I got bogus orders from new affiliates outside of the country, and the purchases always came in within the last few days of the affiliate cycle.

They were fraudulent purchases made with stolen credit cards, hoping I'd mail them commission checks they could cash before it was found out. (Luckily, I always caught those... affiliate stats always showed virtually no hits for those sales, which makes them very suspect).

You may want to state in your affiliate agreement that you have the right to hold payments back at your discretion if you're unsure about the validity of a sale.

Hope that helps a little, good luck.