Is it fair to do a clawback on an affiliate after the 30 day refund period?

by JimOrr
6 replies
I sold a product that offered the standard 30 day money back guarantee. It was a good product and sold quite a number of units. Last month when I did not get paid I looked at my stats and found my payout for the month in the negative.

When I inquired about it I was told that even though they say 30 days as required by their merchant account they like to extend the refund policy to pretty much anyone at anytime.

That is all very nice and noble but my problem with this is they deducted these 30+ day refunds from my account on sales that I should have been paid for.

I looked at their TOS for affiliates and there is no mention of this. It says I will be paid for all sales that go past 30 days.

When I said that I questioned if I could continue promoting their product they came back and said they were sorry to hear that but if that were the case they would ask that I return some of the money to bring my balance out of the negative. Also went on to say this is a common practice within the industry.

I have heard IM offering this kind of guarantee for their product on occasion. It is a very generous offer and says a lot about them standing behind what they are selling. I never realized this promise was being made at the risk of the affiliate promoting it, not theirs. Have you?
#affiliate #clawback #day #fair #period #refund
  • Profile picture of the author Raydal
    Originally Posted by JimOrr View Post

    That is all very nice and noble but my problem with this is they deducted these 30+ day refunds from my account on sales that I should have been paid for.

    I looked at their TOS for affiliates and there is no mention of this. It says I will be paid for all sales that go past 30 days.
    Of course if this is the term of service for affiliates they should stick to it and
    you have the right to point out the TOS to them and get your money. If they want
    to break their own TOS then they should accept the loss.

    I had this done once on ClickBank where they refunded a sales past their own
    refund period. I didn't believe it, but it happened.

    -Ray Edwards
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  • Profile picture of the author yakim1
    The vendor should tell the customer 30 days but tell the affiliates at least 45 days if the vendor is using PayPal because 45 days is PayPal's policy.

    You also have to keep in mind that you really did not make a sale if the customer requests a refund. So you might say you were counting your chickens before they hatch.

    You may want to find a other product to promote that may have fewer refunds or at least find a vendor that fights to challenge refunds especially if it is a digital product.

    You also have to take in consideration that the customer may have disputed though their credit card company and then platforms like PayPal and ClickBank have lost control over the refund.

    I hope this is helpful,
    Steve Yakim
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    • Profile picture of the author JimOrr
      Originally Posted by yakim1 View Post

      You also have to keep in mind that you really did not make a sale if the customer requests a refund. So you might say you were counting your chickens before they hatch.
      Hi Steve thanks for your comment but let me clarify something. It is not that there was a high refund rate or I was counting my chickens before they hatched.

      We are talking about the accumulative effect of refund requests coming in over a few months time for sales that were made over two moths ago.

      I was no longer promoting it so in the last month sales dropped off and were less then the refund requests on sales made way past the refund period which is what put me in the negative.
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      • Profile picture of the author yakim1
        Originally Posted by JimOrr View Post

        Hi Steve thanks for your comment but let me clarify something. It is not that there was a high refund rate or I was counting my chickens before they hatched.

        We are talking about the accumulative effect of refund requests coming in over a few months time for sales that were made over two moths ago.

        I was no longer promoting it so in the last month sales dropped off and were less then the refund requests on sales made way past the refund period which is what put me in the negative.
        Hi Jim,

        As a vendor several years ago I sold a high ticket product and after 30 days paid all my affiliates. Then I had several refunds come through after paying the affiliates. I even had a refund charged back 6 months after the sale and one 8 months after the sale. Needless to say, I lost money and could not split anything with my partners.

        The payment processor was not PayPal. The only problems I've had with PayPal is when a charge back comes from the credit card company, which leaves me no avenue to dispute the chargeback.

        I'm just wondering if the vendor, who's product you promoted, procrastinated in the dispute and lost the dispute and did not go after getting affiliate payments back until after they were charged back.

        A dispute could go on for several months if the refunds were requested at the last minute and then the dispute is not escalated for a couple of weeks. Since PayPal will allow a dispute for up to 45 days, more than 2 months can pass when a dispute comes to a resolution.

        This can also account for the long delays after the purchase for the vendor to ask for the money paid to you for the sale.

        I hope this helps,
        Steve Yakim
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  • Profile picture of the author Tsnyder
    I'd walk away...and I wouldn't send them a dime. Oh... be sure to print
    out or screen cap the TOS for future protection in case they decide to get
    woofy about it.
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  • Profile picture of the author palmtrees
    That's ridiculous. Do not give them a dime. Mind naming the product?
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