PayPal has become the GAME CHANGER - PayDotCom Will Change Soon | Warrior Forum - The #1 Digital Marketing Forum & Marketplace

14 years ago

"Also in terms of AFFILIATE FRAUD this is great too. B/C the refund will
take back the money from the affiliate too! Imagine what this can do
to the CPA industry that is flooded with fraud."

Because affliliates get paid much later with cpa networks, it's quite easy to take back the commission.
So how would this affect "affiliate fraud"?

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mikefilsaime

14 years ago

Originally Posted by Tony Dean

"Also in terms of AFFILIATE FRAUD this is great too. B/C the refund will
take back the money from the affiliate too! Imagine what this can do
to the CPA industry that is flooded with fraud."

Because affiliates get paid much later with cpa networks, it's quite easy to take back the commission.
So how would this affect "affiliate fraud"?

In the CPA Networks, the affiliate is paid in 7 days with no chargeback. So many scam affiliates use 1 x gift cards to buy a $7 product to get paid $80 from the network, They get paid and the rebill never goes through as it is not a real customer. (and many other things like that.)

So if affiliates can get chraged back when the vendor does a refund, they can not "steal" these commissions.

*** But don't let that take you away from the REAL BENEFIT of the thread. That was just a side note

Mike

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ericdpangilinan 14 years ago

Hey Mike.

Thanks for the heads up.

Really generous of you to share cutting edge info to the forum.

Thanks!!!
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pcpupil

14 years ago

Thanks for the update.Just recently sighned up with PDC.
Been on your list for quite a while.
Ill be checking in to PDC in a few weeks.

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entry

14 years ago

Originally Posted by mikefilsaime

Guys,

I will give you a link below that will change EVERYTHING in marketing with
affiliate programs as we know.

PayPal has done the x.com developers conference. I sent 2 people from
my company to this.

There is so much to explain I simply can not tell you all in this thread

BUT HERE IS WHAT WILL AFFECT US and why it is so DAMN GOOD!

Basically, PayPal is allowing developers to create micro payment
marketplaces like Itunes that takes 1 payment that the buyer sees
and then sends the payments to MULTIPLE PAYMENTS like the developer
and the marketplace owner and the affiliate then sent the person to
the marketplace.

Let me explain how this will change EVERYTHING not only for
paydotcom, but for EVERY AFFILIATE software that upgrades their
software API like Amember or BFM when using only PayPal as
a payment choice.

AFFILIATES NOW GET PAID INSTANTLY in the background.

Let me show you how this will work at PAYDOTCOM and how
other paypal sites can do this too. The PDC will be $3 and
the affiliate pay out is 50% on the $47 sale.

So the affiliates sends traffic to YOUR site using PayDtoCom.
The buyer buys the $47 product and goes through PayPal.

The buyer sees 1 price of $47 to the buyer.

In the background the money is instantly sent as.
$22 to Buyer
$22 to Affiliate
$3 to PayDotCom

What this means is this will be a game changer.

(PDC could become the seller like clickbank and send the money in the
background as follows as well, but then we would have to deal with refunds
and as I see it now but have to confirm, this will not be necessary, We
are diving HARD into this code now.)

Bottom line, PayPal has done about 20 other things like this that will
make it hard for anyone to consider using a merchant account again.

(of course we are subject to the evils of paypal and high volume. but
this dev conference basically showed how they are ready to take over
by a factod of x 10)

YES! This is GREAT news for PayDotCom. As now our affiliates are paid
SAME DAY which helps with adwords etc. Imagine, getting paid at POINT
OF SALE as an affiliate and the buyer never sees this happen!

PayDotCom Now has an incredible advantage for sellers that want
happy affiliates.

Affiliates will be happy that they get paid ON THE SPOT and do not have
to WAIT to in some case worry about dealing with a vendor that FLAKES.

Also in terms of AFFILIATE FRAUD this is great too. B/C the refund will
take back the money from the affiliate too! Imagine what this can do
to the CPA industry that is flooded with fraud.

But ALSO not just PDC, but Amember, custom software, BFM software,
and $7 scripts can ALL be updated by the developers with the new
API calls to allow this to happen.

I have no idea if PDC can do this in 1 week ot 60 days but rest assured we
will do it ASAP.

Guys, welcome to the NEW GAME CHANGER. This is very good for ALL OF US.

Check out thus paypal presentation for x.com their new developers network!

Adaptive_Payments

Thanks,

Mike Filsaime

Are you the real mikefilsaime?

i was reading your physical report last week on my bed "6 figure secrets" (the black binded one)- where you give Gold nuggets of information. Great report.... and great nuggets. its great to have the privilege to say that your report is good, to yourself... on this forum. In away you are famous lol.

how many subscribers do you have in total ?

Hope you are fine.... and see you around.

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entry

14 years ago

Originally Posted by entry

Are you the real mikefilsaime?

i was reading your physical report last week on my bed "6 figure secrets" (the black binded one)- where you give Gold nuggets of information. Great report.... and great nuggets. its great to have the privilege to say that your report is good, to yourself... on this forum. In away you are famous lol.

how many subscribers do you have in total ?

Hope you are fine.... and see you around.

Dont the rich marketers reply to their subscribers, or even say hello back?

especially the ones who have purchased from them? :confused:

(infact it would be great to have a Private message from you Mike.... please sort it out- it would be like an autograph! and try and send me a cool personal message

)

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Harvey Segal 14 years ago

Originally Posted by maksym

My question is when are you going to use this new system at PDC?

Originally Posted by entry

Dont the rich marketers reply to their subscribers, or even say hello back?

especially the ones who have purchased from them? :confused:

Come on Mike.

Get this system working right now and reply to all these posts

Stop slacking.

Harvey
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Stephen Crooks 14 years ago

It really is good news for affiliates but I am also slightly confused about refunds and affiliates. If the affiliates get paid immediately how will that money be recovered when refund requests come in? Of course you could try requesting the money back from the affiliates but I would imagine most would not honour that request. What will happen then? Will the merchants have to compensate the affiliate's part of the refund? If this is the case then I can see the benefits to affiliates but certainly not to merchants.
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mikefilsaime

14 years ago

Originally Posted by entry

Dont the rich marketers reply to their subscribers, or even say hello back?

especially the ones who have purchased from them? :confused:

(infact it would be great to have a Private message from you Mike.... please sort it out- it would be like an autograph! and try and send me a cool personal message

)

LOL -

I so my best to say hello to everyone.

Please don't make statements like "Don't the rich marketers..." etc..

That is unfair to me, you, and everyone.

I am not rich. I Was rich before I had money b/c I was happy.

Money only amplifies what you are. If you care an ass, with money your a bigger ass. If you are a generous person, you are even more generous when you have more money.

So please don't egg me or anyone on to respond to you and question if we do or do not having do do with being rich.

So for the record - Hello and thanks for being a customer!

Mike

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samstephens

14 years ago

Hi Mike,

Great to hear! I remember when they mentioned this a year or two (?) ago, so it's great to see it's all happening!

cheers
Sam

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ExtraB

14 years ago

Super information. Thanks!

Thanks

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Accounts-creator

14 years ago

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Daniel Brock 14 years ago

It's about time! I wondered why they hadn't worked on it earlier.

Sure beats having to do the alternating commission thing.
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- mikeyman120 14 years ago
  
  Hey Mike,
  
  As you said in your post:
  "AFFILIATES NOW GET PAID INSTANTLY in the background."
  
  This would be awesome and definitely would be a game changer. If I didn't have to pay affiliates and they could get paid instantly I think you can give Clickbank a run for its money.
  
  Mike
  
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Allan Rich

14 years ago

Theres going to be a lot of companies/people who are going to make bank on paypal's API, will definitely change a lot of things.

Thanks for the insight

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Greg Jacobs

14 years ago

It would have to be turnkey BULLETPROOF integrated somehow to automatically disperse payments and avoid the pitfall of affiliates draining their PP account before the refund period.

perhaps the API has a sort of time-delayed disbursement which can then be integrated with our internal tracking to announce credit of the sale to the affiliate and then it shows up 30 days later as a payout in PP. (basicly letting PP hold the funds against refunds..... lol)

me thinks this would be the only bulletproof way and judging by paypals forward thinking, would most likely be possible (just guessing without having delved into the code)

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JeffLam

14 years ago

Hmm Greg, your way is possible..but that would simply defeat this 'game changer' feature as this feature is to allow affiliates to be paid immediately into their paypal accounts!

Well, I can see how the fraud will work out now though:

1) Fraud signs up as affiliate
2) Fraud buys though own affiliate link
3) Fraud gets half the commission paid to his account
4) Fraud, if tries to refund product, will simply get the money back from his commission plus seller's account.

Am I right?

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Greg Jacobs

14 years ago

Originally Posted by JeffLam

Hmm Greg, your way is possible..but that would simply defeat this 'game changer' feature as this feature is to allow affiliates to be paid immediately into their paypal accounts!

Well, I can see how the fraud will work out now though:

1) Fraud signs up as affiliate
2) Fraud buys though own affiliate link
3) Fraud gets half the commission paid to his account
4) Fraud, if tries to refund product, will simply get the money back from his commission plus seller's account.

Am I right?

Yes, something of the sorts. This would be the obvious way.
And even though PP would have ways to thwart this, at the end of the day, the merchant would be responsible because in my experience PP's general policy is even if you get defrauded, they apologize, but you are still responsible for the fund.

Thus after the cycle is totally complete, the merchant would ultimately be liable for fraudulent affiliates

Also have to take into account honest affiliates who just drain their PP account and then a refund happens. Who is liable then?

I would be intrested to hear from some serious users or the creator of RAP which does a 1 by 1 sale split with the affilaite. I am not sure if this method is "sealed and approved" by PP or just merely ignored/tolerated for now since the scale is small as it jimmys up on a similar lines what PP is offering now.

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JeffLam

14 years ago

Simply awesome for affiliate marketing now.

But wait, some confusion I have:

1) Since the payout is given immediately to the affiliate, what if the buyer wants a refund? The refund is also taken back from the seller AND affiliate account? (Oh, and what about the $3 from PDC)?

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maksym

14 years ago

Thanks a lot for this great information! Glad to see that you are back to this forum.

My question is when are you going to use this new system at PDC?

Thanks

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Emily Meeks

14 years ago

Instant payout to affiliates... hmmm... considering all a particular company's missing affiliate sales, this may mean bad news to one particular company... >

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rapidscc

14 years ago

Originally Posted by moneysoapbox

Instant payout to affiliates... hmmm... considering all a particular company's missing affiliate sales, this may mean bad news to one particular company... >

Lol Yeah Emily, It would give that company something to worry about..I just hope they improve soon with all these plus the issues about them..

Omar

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MichaelHiles

14 years ago

All really good stuff Mike... but there's the real issue of PayPal still being subject to their flake out status as a payment processor, wholly subject to whatever interpretation of terms and services that some individual within their organization might impose. If I construct my business around a specific solution like them, and they crap out on me like the myriad of horror stories that continue to pervade the market, I have no other options. However, if I construct my business on a shopping cart platform, and a 3rd party payment gateway, I can always interchange banks and gateways. I'm in control of my business... not letting it be held hostage by some beast of a company that might stomp me out of existence with no recourse.

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Kurt

14 years ago

I'm guessing Paypal will use some type of hold or reserve on these split type payments, where 10-20% is held back before the money is accessible to account for refunds.

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samstephens

14 years ago

I've just done some initial testing, and it looks like it may not be as transparent as say Clickbank, for example.

It seems (and there may be another way, this is just initial testing) that when you make a payment like this, say you're spending $10, it will list $5 to person1@example.com, and $5 to person2@example.com. Total: $10.

Not sure if this will lead to confusion for newer people.

And like I said, they may be a way around it, this is just my initial thoughts and test results.

Anyway, very interesting!

cheers
Sam

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seasoned

14 years ago

Originally Posted by samstephens

I've just done some initial testing, and it looks like it may not be as transparent as say Clickbank, for example.

It seems (and there may be another way, this is just initial testing) that when you make a payment like this, say you're spending $10, it will list $5 to person1@example.com, and $5 to person2@example.com. Total: $10.

Not sure if this will lead to confusion for newer people.

And like I said, they may be a way around it, this is just my initial thoughts and test results.

Anyway, very interesting!

cheers
Sam

Yeah, it is a proven fact that listing unknown names increases chargebacks. MANY insist that you specify upfront that THEY will charge, so they can avoid this.

PAYPAL COULD, of course, easily avoid that, but they should have a MAIN account, and show everything tied to that.

I noticed the change for multiple payments, but hadn't considered this application. On the SURFACE, it sounds promising, but it DOES create a LOT of new questions. Just off the top of my head, these include:

What notifications will be given out concerning repurcussions, such as chargebacks?
How will notifications to the customer and others be sent out?
What if one of the accounts has a problem, like it is banned?
Will the non-main accounts need to have any special level of account?
What if one of the accounts can't be charged back? Even a 20% hold is no good if you have 60% refunds.

Forgive me if some of these have been answered in the doc. As I said, I didn't delve too deeply. I WOULD have asked about "who pays the fees", but I think I remember seeing a setting for that in the docs.

Apparently, Sam's test indicates they may not have thought that through well.

And what of those that can't use paypal?

Steve

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Sid Hale

14 years ago

Thanks Sam,

Originally Posted by samstephens

It seems (and there may be another way, this is just initial testing) that when you make a payment like this, say you're spending $10, it will list $5 to person1@example.com, and $5 to person2@example.com. Total: $10.

...but did you test parallel payments or chained payments?

From your results, I would guess parallel, but would suspect that chained payments are more appropriate for handling instant affiliate commissions.

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samstephens

14 years ago

Originally Posted by Sid Hale

Thanks Sam,

...but did you test parallel payments or chained payments?

From your results, I would guess parallel, but would suspect that chained payments are more appropriate for handling instant affiliate commissions.

Good point Sid, I tested parallel as it seems reasonable to split the initial payment into the appropriate accounts.

As you aluded to, chained payments seem to keep this info private.

The benefit I see of parallel over chained is that the money is sent directly to the appropriate parties, where with chained the payment goes to the vendor, and is then sent from the vendor to the affiliate.

This would simply the tax issues about different states/countries that a few people have mentioned, but it would also mean that your affiliate would probably be seen as an "employee".

(Of course I'm not a tax accountant, but this seems like a reasonable guess to me)

Pros and cons on both sides...

cheers
Sam

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Sid Hale

14 years ago

Hi Sam,

Originally Posted by samstephens

Good point Sid, I tested parallel as it seems reasonable to split the initial payment into the appropriate accounts.

As you aluded to, chained payments seem to keep this info private.

The benefit I see of parallel over chained is that the money is sent directly to the appropriate parties, where with chained the payment goes to the vendor, and is then sent from the vendor to the affiliate.

This would simply the tax issues about different states/countries that a few people have mentioned, but it would also mean that your affiliate would probably be seen as an "employee".

Look at all the Independent Insurance Agencies out there. They're essentially paid on a "commission only" basis, and there are plenty of other industries where independent agents are used for marketing purposes. Their commissions are an expense to the Insurance company, and revenues to them. They pay their own income taxes after deducting their allowable business expenses.

Affiliates would be treated no differently by U.S. law. (Form 1099 required vs. W-2)

(I'm not a tax accountant either - but I've developed payroll taxing/reporting systems for small business and for State/Local governments all over the U.S. for the past 30+ years.)

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samstephens

14 years ago

Originally Posted by Sid Hale

Hi Sam,

Look at all the Independent Insurance Agencies out there. They're essentially paid on a "commission only" basis, and there are plenty of other industries where independent agents are used for marketing purposes. Their commissions are an expense to the Insurance company, and revenues to them. They pay their own income taxes after deducting their allowable business expenses.

Affiliates would be treated no differently by U.S. law. (Form 1099 required vs. W-2)

(I'm not a tax accountant either - but I've developed payroll taxing/reporting systems for small business and for State/Local governments all over the U.S. for the past 30+ years.)

Hi Sid,

Ah yes, that's the form I was thinking of: the 1099. I've heard about it, but not being a US citizen I haven't needed to look too far into it just yet.

It's good to know it's still a relatively simple process then, from your reply.

I think a lot of accountants are going to be getting phone calls from clients over the next little while, as this becomes more and more popular!

cheers
Sam

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seasoned

14 years ago

Originally Posted by Sid Hale

Hi Sam,

Look at all the Independent Insurance Agencies out there. They're essentially paid on a "commission only" basis, and there are plenty of other industries where independent agents are used for marketing purposes. Their commissions are an expense to the Insurance company, and revenues to them. They pay their own income taxes after deducting their allowable business expenses.

Affiliates would be treated no differently by U.S. law. (Form 1099 required vs. W-2)

(I'm not a tax accountant either - but I've developed payroll taxing/reporting systems for small business and for State/Local governments all over the U.S. for the past 30+ years.)

The rules have changed a LOT even in the last 10 years! Technically, because affiliates don't have specified hours, are paid by several companies, etc... they ARE contractors. STILL, lawyers aren't interested in the law. Sorry if I offended any lawyers but, AS A GROUP, IN THE US, that is FACT! They twist things around to keep their clients happy. THAT is why so many lawyers get off on technicalities, etc...

And there HAVE been cases where companies have gotten in trouble for what their affiliates have done. That is why so many companies stipulate affiliates are NOT employees, and are not to represent themselves as such.

ALSO, insurance applies to a given area and is taxed according to that, and reported according to that. You generally won't see a NY insurance agent that is even legally able to sell insurance in CA. And INSURANCE companies must be "ADMITTED" to the state.

I once saw a lincoln Life insurance employee that was one of the people in like a 3 person office in NY! I asked them WHY they were there! I mean it was a BIG company, and based in Indiana at the time. WHY!?!?!? She said they could not be admitted to NY unless they had a PHYSICAL presence there!

Steve

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mrdomains

14 years ago

Thanks for sharing this info!
Cutting CC payments and keeping the whole transaction chain inside PP system makes sense but it will be interesting to see how they handle the refund issue. PP escrow with delay perhaps. "Paid immediately" might just mean immediate accounting/balance report. Time will tell

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Sid Hale

14 years ago

Hi,

Originally Posted by mrdomains

Thanks for sharing this info!
Cutting CC payments and keeping the whole transaction chain inside PP system makes sense but it will be interesting to see how they handle the refund issue. PP escrow with delay perhaps. "Paid immediately" might just mean immediate accounting/balance report. Time will tell

I don't think there is anything in the Adaptive Payment processes that would change the existing refund process (except that the funds would be drawn from multiple payees), and I see no indication in the documentation currently available to indicate that there would be any sort of escrow or delay of payments.

The same issues discussed here with regard to account balances (as they might impact Paypal's ability to process a refund) already exist today, but with fewer "players" involved in one transaction. Paypal is already aware of their risks on any given financial transaction, and their fees anticipate a certain degree of risk.

I think that there is a lot of supposition here in this thread, with very little actual research having been done to understand how the various processes would work.

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Sid Hale

14 years ago

Hi,

Originally Posted by seasoned

ALSO, insurance applies to a given area and is taxed according to that, and reported according to that. You generally won't see a NY insurance agent that is even legally able to sell insurance in CA. And INSURANCE companies must be "ADMITTED" to the state.

I once saw a lincoln Life insurance employee that was one of the people in like a 3 person office in NY! I asked them WHY they were there! I mean it was a BIG company, and based in Indiana at the time. WHY!?!?!? She said they could not be admitted to NY unless they had a PHYSICAL presence there!

Absolutely true - and probably interesting to someone concerned with the regulation of the insurance industry, but I don't see what it has to do with the question of whether an independent agent in any industry would be considered an "employee" of the company they represent.

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Steve Peters Benn

14 years ago

Hiya Mike,

I take it, that this will all figure into PayGlide as well? I hope so - fantastic design, really fantastic.

Your move to a service software provide couldn't come soon enough, constantly amazed at the amount of services you offer and this whole Paypal change makes everything even more exciting!

Any chance is there going to be an IM awards category for payment systems ? you are looking like a clear winner as you are totally ahead of the game.

Thanks

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Ralf Skirr

14 years ago

Wow, that is awesome.
Thanks for the info, it can have a huge impact.

Ralf

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lakshaybehl

14 years ago

Question for Mike...

You have always emphasized the importance and power of one click upsells and sales funnels. Does PDC have these things? As a seller can I simply upload a bunch of products and have them arranged in a funnel?

If not, will this be done anytime soon now that Paypal is opening up their API?

Thanks
-Lakshay

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MikeAmbrosio

14 years ago

Originally Posted by lakshaybehl

Question for Mike...

You have always emphasized the importance and power of one click upsells and sales funnels. Does PDC have these things? As a seller can I simply upload a bunch of products and have them arranged in a funnel?

If not, will this be done anytime soon now that Paypal is opening up their API?

Thanks
-Lakshay

Lakshay,

PDC recently added both 1-click upsell and shopping cart technology. To use the 1-click, you still need an authorize.net account of your own.

When you log in to your account, click the News link at the top menu for all the details.

Mike

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Jill Carpenter 14 years ago

Affiliates are going to have to pay attention to payments and what they withdraw or spend and when.

Can't someone technically charge back for up to 6 months?

If I get a payment on Monday for $47, I spend that money on Tuesday, and then Wednesday rolls around and someone wants a refund, Either Paypal will need to suspend the account if the funds are missing, and/or your bank will charge you an overdraft fee.

I don't know about anyone else, but I have my paypal linked to a checking account and no links to an actual credit card.

This is almost Paypal encouraging you to keep funds in their account for as long as necessary. Of course, if the money is sitting there it is paypal who benefits - unless the user signs up for the programs that can gain you some interest.

I'm also thinking if an affiliate decides to "hit the road" and run off, the original merchant will be responsible for the refund process. I can't imagine paypal making up the difference.

As a merchant on PDC, I would want to have control over which affiliates are allowed to promote. I think I'd want to see something in place that makes them all have to be personally approved, and I would want access to some information on them before they started selling.

As it stands right now, anyone can promote pretty much anything.

While the current model requires a bit more work, it is a better security feature for merchants to insure that buyers who request it (in the allotted time) do get a refund.

Overall you hope people don't refund - but they do it.

This seems to really support the argument for non-refundable monthly membership sites.
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Gary K

14 years ago

Great info as always Mike. If you are new to Mike's methods (as some indicate in the thread) stick to him like glue. He's a master.

(and yes, I own many of his products)

Have an awesome day!

Gary

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Gary McCaffrey

14 years ago

The only issue I seen when I read up on this new API a few months back was that for an 'adaptive payment' to be made, the sender has to have a PayPal account. They can't just use their credit/debit like they can with a regular PayPal payment.

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vikingmarketer

14 years ago

Wouw that is great news.

I actually thought paypal wouldn't come up with new stuff now when they almost own the market for online payment processors

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jazbo

14 years ago

Interesting read, I will be following the potential of this one closely.

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Steven Wagenheim 14 years ago

As a PDC affiliate for the few people I know and trust, this is great news.
Now I know I'll be getting paid as soon as the sale comes in.

When exactly is this going into effect or is that info in the link you've
provided? Sorry, haven't had the time to read it yet but will get to it first
chance I get.

Anyway, thanks for the heads up on this.

I'm actually excited about it and these days, that's saying a lot.
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DannyLucas

14 years ago

Thank you for your post and I only hope that you are correct in your analysis of things getting better. It is truly amazing to me how the internet has level the playing field of David verses Goliath.

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milan

14 years ago

Originally Posted by mikefilsaime

....but then we would have to deal with refunds
and as I see it now but have to confirm, this will not be necessary, We
are diving HARD into this code now.)...

Could somebody confirm how do the refunds work? Who can initiate the refund?

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Frank Donovan

14 years ago

Regarding the refund issue..

One advantage of an alternating instant commission system, such as provided by RAP (Rapid Action Profits), is that the affiliate is paid the full (100%) commission for any given product - e.g. with a 50% commission rate, this means getting paid for 100% of every other sale - so, at all times, it's clear who's responsible for the sale. It's either the product owner or the affiliate - never both.

The way this PDC proposal has been described, it appears that the product owner and the affiliate will share each sale. This suggests that all refunds will have to come from both parties. In other words, the customer would see a refund being split between two sources. Potentially confusing, but possibly not a major problem, depending on how it's explained to the buyer.

However, this could impact on the ability of the seller to keep the original transaction "seamless" i.e. not involving any third party as, presumably, the returns procedure would need to be described at the point of sale.

I accept that I'm assuming how returns would be managed under the proposed system, based on Mike's outline.

As an aside, this development might also afford the opportunity for product owners to manage their affiliates more effectively than through CB. Perhaps there could be a way in which affiliates were actually pre-approved by the product owners. Negligent or fraudulent affiliates could then be barred from further participation.

That would give PDC or any other CB competitor an attractive USP.

Frank

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Steven Wagenheim

14 years ago

Originally Posted by Frank Donovan

Regarding the refund issue..

One advantage of an alternating instant commission system, such as provided by RAP (Rapid Action Profits), is that the affiliate is paid the full (100%) commission for any given product - e.g. with a 50% commission rate, this means getting paid for 100% of every other sale - so, at all times, it's clear who's responsible for the sale. It's either the product owner or the affiliate - never both.

The way this PDC proposal has been described, it appears that the product owner and the affiliate will share each sale. This suggests that all refunds will have to come from both parties. In other words, the customer would see a refund being split between two sources. Potentially confusing, but possibly not a major problem, depending on how it's explained to the buyer.

However, this could impact on the ability of the seller to keep the original transaction "seamless" i.e. not involving any third party as, presumably, the returns procedure would need to be described at the point of sale.

I accept that I'm assuming how returns would be managed under the proposed system, based on Mike's outline.

As an aside, this development might also afford the opportunity for product owners to manage their affiliates more effectively than through CB. Perhaps there could be a way in which affiliates were actually pre-approved by the product owners. Negligent or fraudulent affiliates could then be barred from further participation.

That would give PDC or any other CB competitor an attractive USP.

Frank

Frank, here's the way I see the refund issue.

As a product creator, I am personally responsible for refunds anyway.
Somebody wants one, they put in a request, I issue the refund. So as
an affiliate, it's just the same process only I'm selling somebody else's
product. It's a little more work, but the upside is I get paid right away.

So for me, the refund issue isn't a big deal.

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Frank Donovan

14 years ago

Hi Gary

Originally Posted by Gary McCaffrey

The new API can split a payment between many receivers, but it can appear as only 1 payment to the customer. If a refund is made, it is just made once and the API deducts from all receivers invisibly in the background.

In that case, it's going to be interesting to see how PayPal manage the initial commission payments and whether a percentage will be withheld pending refunds.

Hi Steven

Originally Posted by Steven Wagenheim

As a product creator, I am personally responsible for refunds anyway.
Somebody wants one, they put in a request, I issue the refund. So as
an affiliate, it's just the same process only I'm selling somebody else's
product. It's a little more work, but the upside is I get paid right away.

And if product creators had the facility to pre-approve affiliates, you'd be exactly the kind of responsible seller they'd want.

Frank

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Holland 14 years ago

Hi Mike

Thanks for sharing this with the community. I will look into this too, wasn't really aware of the info you provided.

Yours sincerely
Angelina
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milan

14 years ago

Frank,
thank you for your response.
However:

My question was who can initiate/do a refund? My guess is that either the affiliate or the product owner can do a (complete) refund. That's what makes sense to me, but I'm just guessing here.
I've watched the Paypal video and they don't talk about this (that video is just an overview).

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Steven Wagenheim

14 years ago

Originally Posted by milan

Frank,
thank you for your response.
However:

My question was who can initiate/do a refund? My guess is that either the affiliate or the product owner can do a (complete) refund. That's what makes sense to me, but I'm just guessing here.
I've watched the Paypal video and they don't talk about this (that video is just an overview).

Logically, any refund would have to be a full refund.

If a customer asks for their money back, regardless of whether they
contacted the merchant or the affiliate, they'd certainly expect ALL their
money to be returned. Thus any true refund in the traditional sense
would have to refund from both the merchant and affiliate accounts.

Make sense?

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milan

14 years ago

Steven, again, my question is who can DO the refunds. That is my question, nothing more nothing less.

Originally Posted by Steven Wagenheim

Logically, any refund would have to be a full refund.

See what you mean but: that's not correct. Partial refunds happen too, and Paypal supports partial refunds (since always). That raises new questions with the new API, but let's forget that for a while...

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Steven Wagenheim

14 years ago

Originally Posted by milan

Steven, again, my question is who can DO the refunds. That is my question, nothing more nothing less.

See what you mean but: that's not correct. Partial refunds happen too, and Paypal supports partial refunds (since always). That raises new questions with the new API, but let's forget that for a while...

Okay, how's this for an answer?

Ask PayPal.

Anything said here (unless they know for certain) is just speculation.

I would assume that anybody can initiate a refund request. If I, as a
seller, just want to arbitrarily go into any sale I've made through PayPal
and issue a refund (the link is right there under each sale's info) I can
do it.

But like I said, ask PayPal because I'd only be guessing along with
everybody else here unless they have specifically verified inside info.

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Sid Hale

14 years ago

Hi Milan,

Originally Posted by milan

Steven, again, my question is who can DO the refunds. That is my question, nothing more nothing less.

The merchant (assuming he did the API call) can authorize a full refund (using the API call), "from all receivers associated with a payment by specifying the payment's payment key or tracking ID"

The quoted statement above is from Paypal's Adaptive Payments developer documentation ( a much more reliable source than the speculation you may find on this, or any other, forum).

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Joel O

14 years ago

This looks like a good thing to come... but I guess we can only know for sure once it actually comes out and we try it out.

But if it goes as it looks, yes, it should help a lot of affiliates... to get them motivated quicker once seeing fast payments.

Joel Osborne

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SageSound

14 years ago

Originally Posted by Joel O

This looks like a good thing to come... but I guess we can only know for sure once it actually comes out and we try it out.

But if it goes as it looks, yes, it should help a lot of affiliates... to get them motivated quicker once seeing fast payments.

Joel Osborne

What exactly are you waiting for?

Do a search on the forum here for "instant commission" and sign up as an affiliate at one of the sites you find, then promote it.

The $7 Secrets script has been around for 3+ years now, and RAP has been around for 2+ years.

There are literally THOUSANDS of products being sold day after day using one of these scripts to pay affiiates directly.

PayPal's API enhancements aren't going to change this at all. What they WILL do is remove a big problem that some sites like PDC have with vendors who fail to make timely payments to their affiliates -- or make any payments at all. That's why Mike is so excited about it: slow-pay vendors make PDC look really bad. When he can have affiliates paid directly, the use of PDC will probably explode.

-David

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Gary McCaffrey

14 years ago

The new API can split a payment between many receivers, but it can appear as only 1 payment to the customer. If a refund is made, it is just made once and the API deducts from all receivers invisibly in the background.

The only issue, as I said is that your customer MUST have a PayPal account. Which will affect sales.

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Sid Hale 14 years ago
Gary,

Originally Posted by Gary McCaffrey

The only issue, as I said is that your customer MUST have a PayPal account. Which will affect sales.

The Adaptive Payments documentation for v1.3 says that allowed funding sources for the payment are:
- ECHECK - Electronic check
- BALANCE - PayPal account balance
- CREDITCARD - Credit card
and...
Paypal account can be created at the time of purchase.
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Gene Pimentel

14 years ago

Fantastic news Mike. Thank you so much for your insights on this.

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Ashley Gable

14 years ago

Originally Posted by NathanFalkner

Two important issues...

- Administratively dealing with 1099's for productive affiliates.

- Computing, collecting, and remitting relevant sales/VA taxes
to the appropriate governmental agency.

...that apparently remain unaffected by these changes?

So are you saying that the product owner will no longer have to treat an affiliate as an "employee"?

I would think that seeing as the customer is paying each of us seperatly, whether he/she knows it or not, that we wouldnt. Right? It would just be a purchase.

If that is the case then I love it. I absolutely hate dealing with tax forms and the like, any way to lessen that and I am happy!

But one other thing, if if is paypal that is doing this, then why would we need paydotcom?

I am honestly asking.

What makes using paydotcom better than using just paypal?

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Steven Wagenheim

14 years ago

Originally Posted by AshleyAA

What makes using paydotcom better than using just paypal?

Because just using PayPal isn't going to bring you in any affiliates.

Remember, PayPal isn't an affiliate program itself. With PDC, your product
gets listed in the marketplace and thus has the potential to bring in
affiliates.

Naturally, you can run your own affiliate program if you like, but you'll
still have to go and recruit your own affiliates and without your product
being listed in some marketplace (PDC, Clickbank, whoever) this makes the
job a little harder.

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Ashley Gable

14 years ago

Originally Posted by Steven Wagenheim

Because just using PayPal isn't going to bring you in any affiliates.

Remember, PayPal isn't an affiliate program itself. With PDC, your product
gets listed in the marketplace and thus has the potential to bring in
affiliates.

Naturally, you can run your own affiliate program if you like, but you'll
still have to go and recruit your own affiliates and without your product
being listed in some marketplace (PDC, Clickbank, whoever) this makes the
job a little harder.

Okay thanks, I get it now! I didnt realize paydotcom was a marketplace like clickbank.

Ashley

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Ashley Gable

14 years ago

Originally Posted by NathanFalkner

From the perspective of computing, collecting, and
remitting appropriate sales/VA taxes -- nothing. It's
up to you, the last time I really researched this, to
figure out what (if any) your tax liability is. ClickBank,
by contrast, acts as the retailer and calculates and
remits relevant sales/VA taxes.

From the perspective of handling 1099's for productive
affiliates for whom 1099's must be processed, neither
PDC nor PayPal will handle this for you. By contrast,
ClickBank (for example) manages the payment and tax
compliance issues stemming from having affiliates.

. . .
Question: How do those of you who exclusively rely
on PayPal for all your processing deal with relevant
sales/VA tax compliance?
. . .

But it isnt me who is paying the affiliates with this new program, it would be the customer. Right?

If Joe bloggs buys something of mine through an affiliate, with this feature, $20 would go to the affiliate, the other $20 would go to me. The $20 for the affiliate wouldnt have to go through me at all, just paypal.

So it wouldnt be me paying the affiliate.

Ashley

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seasoned

14 years ago

Originally Posted by AshleyAA

So are you saying that the product owner will no longer have to treat an affiliate as an "employee"?

I would think that seeing as the customer is paying each of us seperatly, whether he/she knows it or not, that we wouldnt. Right? It would just be a purchase.

If that is the case then I love it. I absolutely hate dealing with tax forms and the like, any way to lessen that and I am happy!

But one other thing, if if is paypal that is doing this, then why would we need paydotcom?

I am honestly asking.

What makes using paydotcom better than using just paypal?

Like I said, I was just shooting questions off the top of my head. That is a GREAT point!!!!!!

You sell an item for $100, and CA wants 6% sales tax(example), WA wants 10% sales tax(example only), and VA wants 8% sales tax(example). The money goes to YOU in CA, an affiliate in WA, and the author in VA. WHO pays WHAT sales tax? It is ILLEGAL for Paypal to do it, because THEY don't know enough about the whole thing. But the states COULD make a case that, since THEY got the money, they are ALL places of business. In a way, they ALL got paid for the product. AND, if money isn't reported, WHERE do they go? YOU better keep records in case others don't.

BTW the tax forms are to allow the vendor to report the tax "obligation" FOR YOU! EVEN if you fail to fill out that ONE TIME form, you STILL need to report the tax, etc... If you don't, they could audit! You have income tax and NOW, possibly, SALES TAX!

BTW Sales tax, HISTORICALLY, has NOT been an issue, but for the past 10+ years, states have been redefining what is taxable. So non tangibles and out of state mail order USED to NOT be taxable! NOW, sometimes, they ARE!

There are also potential liability questions. I am certainly NOT a lawyer, but you know how lawyers are!!!!!

Steve

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samstephens

14 years ago

Originally Posted by seasoned

...

BTW Sales tax, HISTORICALLY, has NOT been an issue, but for the past 10+ years, states have been redefining what is taxable. So non tangibles and out of state mail order USED to NOT be taxable! NOW, sometimes, they ARE!

There are also potential liability questions. I am certainly NOT a lawyer, but you know how lawyers are!!!!!

Steve

...and then add different countries in:

Say I'm your affiliate Steve, and we sell a product to another Aussie - you don't need to charge sales tax, but I do.

A lot of countries have GST, a whole lot more have VAT. I'd be really interested to see how it pans out!

By the way, my comments above about "chained payments" would solve this, but then raise the "employee" or "contractor" tax issue.

cheers
Sam

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seasoned

14 years ago

Originally Posted by samstephens

...and then add different countries in:

Say I'm your affiliate Steve, and we sell a product to another Aussie - you don't need to charge sales tax, but I do.

A lot of countries have GST, a whole lot more have VAT. I'd be really interested to see how it pans out!

By the way, my comments above about "chained payments" would solve this, but then raise the "employee" or "contractor" tax issue.

cheers
Sam

The sales tax thing sounds like such a MINOR issue, but what if you make only $20 on a $100 item? With vat and all, the tax could eat your income up. Governments usually want to be paid on the FULL sale price. 8-(

Yeah, I have heard horrer stories, even from relatives, they THEY end up having to pay a "duty" on even GIFTS from the US. That stinks.

To come to think of it, I REALLY broke the law with some whiskey I brought to another country! Not only did nobody pay for the $100 product, but it had LIQUOR in it. NOBODY would ever drink it, as it is a collectors item, but there would STILL have been a SIN tax on it! Gee, I am a SMUGGLER and a tax cheat for simply bringing my uncle a present!

Steve

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samstephens

14 years ago

Originally Posted by seasoned

To come to think of it, I REALLY broke the law with some whiskey I brought to another country! Not only did nobody pay for the $100 product, but it had LIQUOR in it. NOBODY would ever drink it, as it is a collectors item, but there would STILL have been a SIN tax on it! Gee, I am a SMUGGLER and a tax cheat for simply bringing my uncle a present!

Steve

Heh, that's how it starts, Steve. First a bottle of whiskey, next you'll be the head of an international crime syndicate. It's a slippery slope, my friend!

cheers
Sam

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wordwizard 14 years ago

If I understand this correctly, that's because there's a difference between the PDC/Clickbank/1shoppingcart that deal with selling and product delivery and affiliate management etc., and the payment processor -- they all need some kind of payment processor to uhm process the payments.

Of course, I suppose that PP could always move into the product delivery line as well -- in fact, it already has for all I can tell.

There's the PayPal marketplace or whatever it's called...
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Jim Symonds 14 years ago

This is great news, Mike.

Thanks for sharing!

I had this idea and sent it off to Alertpay just days ago, myself.

I encourage everyone to get involved, if they want to see this in Alertpay. Please visit this thread, and vote:

http://www.warriorforum.com/main-int...your-vote.html

Thank you!
Jim
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FlightGuy

14 years ago

Hey Mike,

Been a while since we've spoken, you seem to be pretty busy up there!

Glad to hear this great news... I think it'll be an overall tremendous win/win for both you and everyone who uses PDC. AvenueGirl brings up a good point, though. There could be an influx of newbies/scammers to PDC and I'd be interested in to know how Paypal would work out where refunds come from if an affiliate cleaned his account every time a few sales were made.

Maybe a new affiliate rating system in PDC is in order.

I don't think this will be a huge issue, just one to think about.

Talk to you soon,

John Dennis

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garyv

14 years ago

I think what people are starting to realize here, is that ClickBank keeps track of a very large refund/chargeback buffer zone. This is something that over the years they've perfected, because it prevents not only an increase in chargebacks, but it also prevents their own trouble w/ their merchant accounts. Affiliates on their own are not going to be disciplined enough to keep a buffer in their account for future refunds & chargebacks.

Personally I see a future filled w/ frozen paypal accounts unless they figure this one out.

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JayXtreme

14 years ago

I have to be honest here....

Whilst I do believe it will be a game changer. I don't like the look of it so far... Maybe Paypal have really knocked one out of the park with this and I just don't see it yet.

I much prefer the RAP style alternation of payments...

As a product creator and an affiliate.. I can see it from both sides.

As a product creator, I do feel a duty to pay all refunds if necessary...

BUT

As an affiliate, if one of the customers that I send to the sales page is asking for a refund, then I am glad to pass that refund out of my commission... No questions.

I'm digging more into this x.com biznass for my own side of things, but I am not excited about it right now.

Could be wrong

Peace

Jay

p.s. I like the way Mike said "don't egg"... lolz...

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Sid Hale

14 years ago

Hi Jay,

Originally Posted by JayXtreme

I have to be honest here....

Whilst I do believe it will be a game changer. I don't like the look of it so far... Maybe Paypal have really knocked one out of the park with this and I just don't see it yet.

I much prefer the RAP style alternation of payments...

Me too.

...at least until I get through it more thoroughly, but will prototype this with an eye toward providing it as an option within RAP - not a replacement.

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JohnMcCabe 14 years ago

Not turning this into an ad for Sid's product, but one of the things I like about the RAP system is the ability to set guidelines for affiliates and to ban affiliates that don't observe them.

If an affiliate refuses to honor a refund request, I do cover it. But it's the last time that affiliate will make anything from me.
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candoit2

14 years ago

Mike, what does this mean for our affiliate marketing friends in countries that do not offer paypal?

Aaron

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Popstar

14 years ago

Paying affiliates immediately on every sale seems like an accident waiting to happen... at least to me. I can understand why affiliates would like it, but it could be a huge financial risk for vendors.

There's a reason that merchant accounts impose reserves on vendors... risk. Just because you use Paypal as a payment processor doesn't mean that risk is gone. Unless you impose a no-refund policy... and even then, you're courting trouble.

If a vendor does any real volume, this could be disastrous. There has to be some type of safeguard in place for the vendor for this to work properly. Maybe I'm just misunderstanding what that safeguard is.

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Keith Choy

14 years ago

Originally Posted by Popstar

If a vendor does any real volume, this could be disastrous. There has to be some type of safeguard in place for the vendor for this to work properly. Maybe I'm just misunderstanding what that safeguard is.

Hi Popstar,

If I understand from Mike's first post correctly, the refund is also handled by the system.

I guess we need to see this in action over time to see if this is a real concern.

- Keith Choy

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Sid Hale

14 years ago

Hi,

Originally Posted by Popstar

Paying affiliates immediately on every sale seems like an accident waiting to happen... at least to me. I can understand why affiliates would like it, but it could be a huge financial risk for vendors.

There's a reason that merchant accounts impose reserves on vendors... risk. Just because you use Paypal as a payment processor doesn't mean that risk is gone. Unless you impose a no-refund policy... and even then, you're courting trouble.

If a vendor does any real volume, this could be disastrous. There has to be some type of safeguard in place for the vendor for this to work properly. Maybe I'm just misunderstanding what that safeguard is.

Delaying payment of commissions isn't the only way to manage that risk.

Myself and some 1600 other RAP merchants are paying instant commissions today. Many of us have been doing so for 2 years or more, and the $7 Secrets script did this (but with less merchant control) for almost a year before the development of RAP. Almost all of these provide product guarantees and allow refunds.

While the merchant receives all payments in older systems (and is therefore responsible for any refunds), when affiliates are paid directly by the customer, they (legally) take responsibility for any refunds required against funds paid to their account. There is actually less risk for the merchant than with older affiliate programs.

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Popstar

14 years ago

Thanks for your explanations, Keith and Sid.

I think I understand the theory. What I'm concerned about is whether all affiliates will pay refunds. All it takes is one bad apple with a lot of volume...

I hope I'm wrong, but I still see a serious risk. Unless there's been court precedent, I'm not sure that the legalities have been established in a definitive way. But there's also the perception of your customers if you don't deliver on refund requests if an affiliate bails.

I agree that the probability of a disaster may be small, but I don't like taking that kind of financial risk. Maybe I'm too conservative.

Debbie

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SageSound

14 years ago

Originally Posted by Popstar

Thanks for your explanations, Keith and Sid.

I think I understand the theory. What I'm concerned about is whether all affiliates will pay refunds. All it takes is one bad apple with a lot of volume...

I hope I'm wrong, but I still see a serious risk. Unless there's been court precedent, I'm not sure that the legalities have been established in a definitive way. But there's also the perception of your customers if you don't deliver on refund requests if an affiliate bails.

I agree that the probability of a disaster may be small, but I don't like taking that kind of financial risk. Maybe I'm too conservative.

Debbie

In general, both in my own experience using RAP on a number of products and promotions, and others I've talked with, unless you've absolutely lied about your product on the sales page or you just have terrible customer service, the refund rates typically hover between 2%-5%, regardless of the payment mechanisms you use. That is, the risk is fairly constant any way you slice up the pie.

Most merchant card processors' discount fees fall within that range as well, including PayPal's.

If you're paying 50% commissions, then on average your affiliates will get half the refunds and you'll get half the refunds. You need to have an affiliate policy in place that says if a customer requests a refund and the affiliate caught the payment, then that affiliate needs to issue the refund or risk being banned from earning further commissions. If they're doing some heavy promotions, do you think they're going to risk losing a dozen or more commissions by not paying a refund or two?

Furthermore, only a tiny handful of your affiliates will make any significant number of sales. Those guys are no more interested in refunds than you are, and in fact my experience is that it's the onsey-twosey affiliates who cause the most problems and generate the most refund requests. But still, we're talking a very small number here.

I once referred two sales of a $500 product paid through RAP. The vendor got the first commission, I got the second. Then the second guy requested a refund from the vendor. Before I even knew it, the vendor issued the refund, then asked me to split it with him. Technically, I was on the hook for the whole amount. But he was kind enough to split it with me. I didn't make any more sales of that product, try as I might, so things worked out fine in that case.

The point is, yes there are always risks of refunds. But they aren't specific to the payment mechanisms involved. The bigger picture is more about how you deal with them.

-David

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Always-A-Warrior

14 years ago

Thanks for the heads-up Mike. Looking forward to better ways. You coming to my birthday party?.

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Josh Anderson

14 years ago

I've never been a fan of split payments....

Also even the 100% rotating payments with 1:1 ratio between merchant and affiliate lead to problems.

The issue is...

If you want total control over customer satisfaction and the reputation of your company when it comes to money back guarantees and other refund related issues...

You want to be the one in control.

Do you think your customer cares when they call you up and want a refund and you tell them:

"But you did not buy my product off me you purchased from my affiliate and you'll need to figure out who they are and ask them for a refund."

If they feel screwed they are going to tell people YOU screwed them even if it was an affiliate.

I know... in IM a lot of people use pen names and aliases and just want to automate the whole thing so that they never have to do anything...

But for most branded and customer service oriented business models it just does not work.

We integrated PayPal's Pay Flow Pro and Website Payments pro for a large partner/client in our platform...

We look at them as just another gateway to use for processing traditional transactions.

I am sure there are some exciting applications for the adaptive payment model. And depending on WHO has control over the refund for the total transaction and how it is structured it could be very powerful...

However, I'd encourage anyone who is considering it to be very careful to ensure that you don't end up with higher shoppingcart abandonment and client confusion by embracing things such as split payment processes.

What I have found is that because PayPal is a staple in people's lives they are used to the traditional checkout processes and even things such as badly implemented PayPalPro checkout processes can lead to higher shoppingcart abandonment just because the client thinks that they have completed the transaction when they still had two more confirmation steps that they were not used to because they did not have to do that in Paypal standard.

So many things to consider to ensure you avoid shoppingcart abandonment, billing customer service confusion etc.

When the affiliate is paid directly the affiliate also has reason to be concerned if the vendor fails to deliver the product or its significantly not as described they could have tons of chargebacks on their hands and they would have NO DEFENSE at all and would have to accept the liability of any and all chargebacks every single time.

Just be smart about it.

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SageSound

14 years ago

Originally Posted by Josh Anderson

You want to be the one in control.

Do you think your customer cares when they call you up and want a refund and you tell them:

"But you did not buy my product off me you purchased from my affiliate and you'll need to figure out who they are and ask them for a refund."

First off, that's a really idiotic way to handle it. You are under no obligation to issue a refund immediately, and saying it will take 24/48/72 hours to process, or even more, is not unreasonable. It doesn't matter if an affiliate was involved or not. They bought YOUR product and YOU owe them the refund. There are numerous ways to handle it, but giving your affiliate a couple of days to issue the refund is perfectly acceptable. More than that and I'd disable their account.

Regardless of who caught the commission, there are other things that could necessitate a delay.

The fallacy of this "I'm in TOTAL CONTROL" theory is that you have virtually NO control over what your merchant charge account processor might do. If they freeze your account, you have no excuses. "Uh, well, sorry, I can't issue a refund because my merchant processor froze my account." Doesn't matter if it's PayPal or one of the bankcards.

Just remember, the likelihood of having one affiliate screw you is going to be fairly low -- because the affiliate is shooting himself in the foot as well. If they're making money from your product, they're not going to screw around and put future earnings at risk.

Your merchant processor, on the other hand, is playing by an entirely different set of rules. They don't care what your refund rate is if your sales suddenly and unexpectedly exceed their projections.

Sorry, but I'd rather take my chances with one not-so-bright affiliate over a merchant card processor any day! The affiliate might cost me one refund but his promotional efforts might garner me far more sales that I don't have to pay him because of his breech of contract. The merchant account processor, on the other hand, has me over a barrel for 100% of my revenues. I don't know about anybody else, but the prospect of THAT happening scares the Bejezus out of me!

I don't care who's in control as long as there isn't one single point of failure that can put me out of business. Well, that sounds great, except for most of us, there really are several: payment processors, web hosts, domain registrars, blacklists, server failures, hackers, etc. It'd complicated and expensive to have 100% redundancy of everything.

-David

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Josh Anderson

14 years ago

Originally Posted by SageSound

First off, that's a really idiotic way to handle it.

That's my point.

Originally Posted by SageSound

I don't care who's in control

"Idiotic"

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SageSound

14 years ago

Originally Posted by Josh Anderson

Originally Posted by SageSound

First off, that's a really idiotic way to handle it.

That's my point.

I think you're missing the point.

RAP has the ability to pay something like six different payees.

It's not appropriate to tell the customer to deal with it!

It's YOUR site, so it's YOUR job to contact whomever caught the payment and tell them to issue a refund. If they don't do it in a timely manner, then you do it yourself and disable them from receiving further payments.

If they used a regular credit card with your merchant payment processor, you dont' say, "Well, it was really the credit card processor who took the payment from you, so you'll need to call them". No, you deal with it yourself.

Same difference.

-David

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Josh Anderson 14 years ago

Originally Posted by SageSound

I think you're missing the point.

RAP has the ability to pay something like six different payees.

It's not appropriate to tell the customer to deal with it!

That was my point :rolleyes:
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RichardWing

14 years ago

Debbie,

When a buyer requests a refund they do so with the person they paid. Typically they will do so right inside PayPal on the details page of that transaction. If the receiver of that transaction was the affiliate then they will get the notice from PayPal.

If the affiliate doesn't respond within the allotted amount of time then PayPal debits it from the affiliates account. In some cases depending on the type of complaint the funds are placed in escrow until it has been resolved or escalated.

The affiliate is considered the merchant for a percentage of the sales the affiliate refers over to the sales page. We typically refer to our affiliates as RESELLERS because we basically allow them share in the sales of our product a percentage of the time. On a 50% reseller commission the reseller will receive payment for every other sale.

There are many benefits to this model and as mentioned above many of us have employed this model for two years in all of our products we resell.

The main benefit I enjoy is that I know that whatever is paid into my paypal account is mine to spend less my normal business expenses and monthly subscriptions.

Heck we even have our partners (we call equity partners) added into this rotation when its the admins turn to get paid.

My resellers and my equity partner (on a given product) get paid directly.

Everyone is HAPPY. And everyone is responsible to for their own business.

NO PAPERWORK OR ACCOUNTING FOR ME. No being MR Policeman for the IRS.

If you wanted to promote my sale I don't have to know or care if you are a US citizen for IRS tax reporting purposes. I don't need to collect your social security number. (many don't like to give it out) You may keep that information private and still benefit from a sale I set up, I host, I build and provide the affiliate tools for etc...

I don't have to deal with reports. I don't have to aggregate all of my different sites I own or cross compare all of my affiliates for the many products that they may promote to make sure I didnt pay any Single US affiliate more than $600 aggregate.

I can attest that in the two years I have solely used RAP as a merchant for my own sales and affiliated for other RAP merchants, I have not had a single issue where an affiliate had not refunded a sale back to the buyer.

They are more than happy to do so. They get placed right back in the rotation and are next to get paid for the next sale.

The RAP community has proven without fail that this business model works and works very well.

Affiliates love to get paid right away for their efforts and because we offer them that solution they seek out RAP merchants.

Our business model eliminates the concern if they will be paid by the merchant and paid on time. When affiliating for a merchant that uses an instant commission model such as RAP or merchants that will employ the new paypal API. They can know that by the end of the day they will have funds in their account. (provided they have traffic to send there)

The concept of holding on to commissions and paying them out after a refund period is an out dated concept. At least 3 years outdated. And as proven by the new API PayPal is providing they see the market for offering this ability to facilitate what we RAP'rs have been for over 2 years.

This business model is not a FAD and you can bet that those sales systems that don't get on the bandwagon will be left behind in the affiliate game.

There is no more inherent risk to the merchant when using an Instant Commission model. Either way paypal is going to retrieve the funds from everyone that was paid for a transaction. The buyer is protected and the merchant is protected in that he will not be on the hook for refunding a buyer after the merchant already paid out commissions.

Bottomline is that PayPal has taken a step in the right direction and those developers like Mike and Sam that are now looking into this closer and planning to embrace a Instant Commission model are proving they can and are willing to keep up with the trends.

It's a shame it's taken everyone two years to see it's merit

I would like to personally welcome all of you into the Instant Commission Arena.

I hope you find a solution that best suits you like I have.

Richard Wing
623-505-6306

I welcome anyone at no charge to call me personally and I will spend as long as you need and explain in full detail how the instant commission model works for me. I have nothing to sell you and am happy to help out if you have questions.

...... I refreshed the screen to find more posts so I am going to address a few things more....

If you want total control over customer satisfaction and the reputation of your company when it comes to money back guarantees and other refund related issues...

You want to be the one in control.

Do you think your customer cares when they call you up and want a refund and you tell them:

"But you did not buy my product off me you purchased from my affiliate and you'll need to figure out who they are and ask them for a refund."

In the first place any refund requests I have had in the two years I have employed the Instant Commission model 3 things happen....

1. They file a dispute at paypal. ( whoever was paid is responsible for the refund.) Paypal will not go to the merchant and say your affiliates buyer wants a refund. It will never happen.

2. The buyer contacts me through my support desk. (i post my phone number in every email and on every sales page and I don't get calls. (the rare one or two in a two or three month period) Point is they will ask for a refund in the ticket for whatever reason. As any good business owner you are going to let them know that you received their request and will be happy to process it. I also ask them questions to better understand why they wanted the refund and tell them they are welcome to contact me on the phone and I can help them out and if I still can't help them I will be happy to process the refund. I ask them to let me know if they need some assistance or would rather follow through with the refund.

While I am waiting for a response I go into the admin and look up the transaction. I check who they paid and if it was one of my affiliates I will make note of it.

If the buyer responds back still requiring a refund I contact the affiliate myself and pass on the news of the refund request and I ask them to please process it as per my money back guarantee they agree to honor by being my affiliate.

In RAP we have a way to know when a product has been refunded so we can know if the affiliate has handled it in a timely manner.

In the meantime I contact the buyer and let them know that they paid one of one of our partners directly for their purchase (jv partners). I also tell them that this person was notified and that their refund will be processed by them. I also tell them that if it doesn't happen in a timely manner they should initiate a paypal dispute for the transaction.

At no time to I make the buyer do any leg work in regards to doing business with me or my affiliates. I guide them every step of the way and they are assured they will get their refund.

3. They will contact the person they paid. They will contact the affiliate through his/her support email or phone or they will contact ME (the merchant) and request the refund and the affiliate or I will handle those directly.

The person paid is the person on the hook for the refund. (PAYPAL MAKES SURE THE BUYER GETS THEIR MONEY EVERY TIME)

I am a branded and customer service oriented business and I know as in any business its all in the presentation and how you interact with your clients.

When it comes down to it they want to know that they are recognized and how you plan to help them.

They don't want to have a ticket or email waiting for days to get an initial response. They want to know what you plan to do.

I have had no one complain and in fact I have saved quite a few sales (for my affiliates) by the above approach. I have made new friends and loyal clients who continue to buy regularly.

When the affiliate is paid directly the affiliate also has reason to be concerned if the vendor fails to deliver the product or its significantly not as described they could have tons of chargebacks on their hands and they would have NO DEFENSE at all and would have to accept the liability of any and all chargebacks every single time.

Just be smart about it.

I agree be smart about it.

When affiliates decide to form a relationship with a merchant they should research that merchant and even contact the merchant directly. They should find out how quickly they respond to your initial reply. They should have a contact phone number where a real person can be reached.

If they do not have a responsive support system in place even if the merchant is taking in all the money and paying the affiliate later you are at their mercy that they will treat your referrals with the best support you yourself would provide.

Just because a person knows how to set up a website and a product for sale doesn't instantly give them credibility.

I can recount many times over the years merchants that either were late, slow or no pay on my commissions.

Well known marketers to this day. That are still marketing. Most people here would call them GURUS.

I would much rather do my research in the beginning and establish long term affiliate relationships with instant commission merchants just like I would an old school affiliate system merchant. I like the fact that I can get paid directly on the day of promotion. And so do my affiliates who get paid instantly.

My account is a real account of what really happens. Not a guess of what could or might happen. I do this everyday and have been using this model for over two years.

I know it works and its not as much trouble as people would like to have you believe.

Richard Wing
623-505-6306
Anyway the doors open for anyone. Even if you care to argue the point.

I love the instant commission model and it's done me quite well over the years and as I said before I am happy to see it being explored by others.

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seasoned

14 years ago

Originally Posted by SageSound

It's not appropriate to tell the customer to deal with it!

RIGHT!

Originally Posted by SageSound

It's YOUR site, so it's YOUR job to contact whomever caught the payment and tell them to issue a refund. If they don't do it in a timely manner, then you do it yourself and disable them from receiving further payments.

STUPID! HOW do you know they didn't issue a refund?

Originally Posted by SageSound

If they used a regular credit card with your merchant payment processor, you dont' say, "Well, it was really the credit card processor who took the payment from you, so you'll need to call them". No, you deal with it yourself.

Same difference.

They CAN "call them". It is called a CHARGE BACK!

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RichardWing 14 years ago

You know they didn't issue a refund because the transaction in the PERFECTLY DESIGNED instant commission sales system (RAP) says so.

Anything to do with the sale of a product or refunds is communicated back to the system and the merchant can see whats going on.

Richard Wing

Originally Posted by seasoned

RIGHT!

STUPID! HOW do you know they didn't issue a refund?

They CAN "call them". It is called a CHARGE BACK!
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Sid Hale 14 years ago

Hi,

Originally Posted by seasoned

STUPID! HOW do you know they didn't issue a refund?

errrrrr... because Paypal has not communicated back to his IPN script that a refund was issued by his affiliate?

Not STUPID at all, and it's totally automatic.

The Paypal IPN process notifies the merchant of all sales, refunds, subscription sign-ups, etc. - regardless of whether the transaction was against the merchant's Paypal account or the affiliate's.

If his backend IPN script does not acknowledge receipt of the refund transaction from Paypal... They just send it again, and again, and again (less frequently as time elapses, but the merchant is notified of any refunds processed by his affiliates).

This is a process that is handled totally in the background between his server and Paypal's, but it's totally evident from his Admin panel (transaction ID is no longer a hyperlink on that transaction, and it is shown in red).

Isn't it amazing what computers can do these days, without silly little one-off instructions? Maybe they aren't so "STUPID" after all!
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SageSound

14 years ago

Originally Posted by seasoned

Originally Posted by SageSound

It's YOUR site, so it's YOUR job to contact whomever caught the payment and tell them to issue a refund. If they don't do it in a timely manner, then you do it yourself and disable them from receiving further payments.

STUPID! HOW do you know they didn't issue a refund?

uh, you look it up in your RAP Admin panel...

I'm talking about using PayPal and an immediate payment mechanism like RAP. I'm not sure what you're talking about here.

The only two scripts that I know of that do immediate payments to affiliates are RAP and the $7 Secrets script, and they both use PayPal exclusively.

Personally, I would not even ATTEMPT to do immediate affiliate payments through a traditional merchant processing gateway.

-David

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seasoned

14 years ago

Originally Posted by SageSound

uh, you look it up in your RAP Admin panel...

I'm talking about using PayPal and an immediate payment mechanism like RAP. I'm not sure what you're talking about here.

The only two scripts that I know of that do immediate payments to affiliates are RAP and the $7 Secrets script, and they both use PayPal exclusively.

Personally, I would not even ATTEMPT to do immediate affiliate payments through a traditional merchant processing gateway.

-David

You all seem to be indicating that the IPN sends a message to the author who then sends a notice to you. There are TOO many problems with that, and it is just DUMB! If it notified YOU, and then him, he couldn't be sure. If it notified HIM, you couldn't be sure, and that would be just DUMB! And we ALL know it CAN'T notify both of you.

STILL, refunds are BOUND to happen and, if you don't have access to the funds, YOU have to pay for the refund. Clickbank is a company that won't take such risks, and so I doubt they would risk it. Of course, paypal COULD aleviate that by doing it on THEIR end but that would make things much the same as they are. We ALL know how people LOVE(sarc) them, for doing such things.

Steve

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milan

14 years ago

Originally Posted by seasoned

You all seem to be indicating that the IPN sends a message to the author who then sends a notice to you. There are TOO many problems with that, and it is just DUMB! If it notified YOU, and then him, he couldn't be sure. If it notified HIM, you couldn't be sure, and that would be just DUMB! And we ALL know it CAN'T notify both of you.

Lol Steve, IPN doesn't notify a person but a (product's) website. So yes, no problems at all to notify both people or whoever you want.

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seasoned 14 years ago

Originally Posted by milan

Lol Steve, IPN doesn't notify a person but a (product's) website. So yes, no problems at all to notify both people or whoever you want.

YEAH, I KNOW it notifies a website, but I am not aware of the ability to have it notify TWO, from the same transaction!
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- Sid Hale 14 years ago
  
  Hey Steve,
  
  Originally Posted by seasoned
  
  YEAH, I KNOW it notifies a website, but I am not aware of the ability to have it notify TWO, from the same transaction!
  
  Your prior response was pretty strong, for someone who is now "not aware of".
  
  It doesn't have to notify two websites (although it certainly could if that's what Paypal wanted to do).
  
  In fact, affiliates often won't even have a website to notify.
  
  Paypal has always notified, via email, both the buyer and the seller. On an affiliate sale, the seller email goes to the affiliate - but the IPN transaction ALWAYS goes back to the merchant's website, so everyone has been notified and the merchant can record that sale on his database, or whatever.
  
  You really should save the more adamant statements for those situations where you know (first hand) what you're talking about.
  
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- milan 14 years ago
  
  Originally Posted by seasoned
  
  YEAH, I KNOW it notifies a website, but I am not aware of the ability to have it notify TWO, from the same transaction!
  
  Look at Sid's answer. I'd say there is no need at all to notify more than one site. Perhaps (?!) there might be a scenario where this would be useful, but in such case the one site which got notified by Paypal can simply notify other sites. Those (other) sites can also check with Paypal if the notification is genuine or not.
  
  But with most situations, like Sid says, affiliates might not even have their own sites.
  
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Sid Hale

14 years ago

Hi Steve,

Originally Posted by seasoned

You all seem to be indicating that the IPN sends a message to the author who then sends a notice to you. There are TOO many problems with that, and it is just DUMB! If it notified YOU, and then him, he couldn't be sure. If it notified HIM, you couldn't be sure, and that would be just DUMB! And we ALL know it CAN'T notify both of you.

Gee - that's odd.
I got one for $297 before 5:00 am this morning (I was asleep).

So apparently, you are the only one who knows that

it CAN'T notify both of you.

As Milan (just above) stated, the IPN (Instant Payment Notification) goes to the merchant, regardless of whether the sale went to his/her Paypal account or the affiliate's! RAP receives that and records the sale in the merchant's database. Optionally, RAP will send the merchant an IPN notification email (just one more way to stay on top of things).

And remember...
this isn't new. I have transactions from affiliates that date back to 20 September 2007 recorded in my RAP database, so it's been working that way for quite a while.

and... I don't think that basing our statements on recorded fact is DUMB!

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SageSound

14 years ago

Originally Posted by seasoned

You all seem to be indicating that the IPN sends a message to the author who then sends a notice to you. There are TOO many problems with that, and it is just DUMB! If it notified YOU, and then him, he couldn't be sure. If it notified HIM, you couldn't be sure, and that would be just DUMB! And we ALL know it CAN'T notify both of you.
. . .
Steve

You're welcome to call it DUMB Steve, but it's the way a number of scripts work today: RAP, DLGuard, aMember, and a handful of other less-known scripts.

What's your beef here?

The purpose of PayPal's IPN mechanism is to allow vendors to manage transactions more effectively. Without it, you have no way of knowing if a payment was made successfully, or whether it was a direct payment or a pending payment (via an eCheck, say).

The IPN's contain verified shipping data if that's needed.

IPNs are also triggered when refunds are issued. That way your script can automatically terminate memberships based on recurring payments

IPN's are the real-time handshaking that happens to make the scripts more user-friendly.

Also, it's the vendor's site that gets the IPN -- not the affiliate. The affiliate has no need for this information, and could be prohibited from getting it due to privacy restrictions.

The IPN mechanisms that are currently in place seem to do a fine job of things. So I can't really tell if you're complaining or saying something is broken or what.

-David

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seasoned

14 years ago

Originally Posted by SageSound

You're welcome to call it DUMB Steve, but it's the way a number of scripts work today: RAP, DLGuard, aMember, and a handful of other less-known scripts.

Actually, Sam, the AUTHOR of dlguard, said his DIDN'T work like this(Immediately paying several affiliates, or even ONE) yet. Paypal JUST came up with it, so how could ANY work like that. OK, MAYBE today, but not several months ago.

Steve

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SageSound

14 years ago

Originally Posted by seasoned

Actually, Sam, the AUTHOR of dlguard, said his DIDN'T work like this(Immediately paying several affiliates, or even ONE) yet. Paypal JUST came up with it, so how could ANY work like that. OK, MAYBE today, but not several months ago.

Steve

Steve, you're not tracking the conversation.

The thing I was responding to (that I quoted in that post) was a statement you made about how IPNs work. And yes, DLGuard works with IPNs the exact same way as RAP and other scripts. It does not send out multiple copies, it doesn't NEED to sent out mutliple copies, and there's no need to send IPNs to customers as you seem to be implying even if there are multiple payees.

The IPN is for the VENDOR to use (well, for his script) to verify that payment was made successfully or not. It's not for use by the PAYEEs, and might violate privacy terms if they ARE copied to any of the PAYEEs -- whether there's just one or several.

DLGuard does not currently support affiliates at all (and never has). But it DOES utilize IPNs to control its logic.

-David

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SageSound 14 years ago

Originally Posted by Josh Anderson

Originally Posted by SageSound
I don't care who's in control

"Idiotic"

Let's see what you're NOT in control of:

* the power coming into your home or office
* the power coming into wherever your server is hosted
* the server hardware itself
* the internet
* software services on your server
* logical disk problems that can arise on your server
* the DNS Nameserver, if it's a separate server
* hackers who may have snuck into your server
* your bank
* your merchant payment processor
* your ex-spouse (it happens!)
* 3rd-party business sites (eg., PDC, Clickbank)
* and last but not least ... affiliates who refuse to issue refunds

There are probably more, but I think I've made my point -- you can NEVER be in 100% control of ALL of these, and many of them you will NEVER HAVE ANY control at all. "idiotic" indeed!

But just for grins, given all of the complaints posted here on the WF and elsewhere, how often does the last item come up vs. some of the others?

I'd have to say that getting affiliates to issue refunds is one of the least risky things I've had to deal with in all of my time working with RAP. And I think if other RAP users are willing to chime in, they'll probably say something very similar.

-David
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seasoned

14 years ago

Originally Posted by SageSound

First off, that's a really idiotic way to handle it. You are under no obligation to issue a refund immediately, and saying it will take 24/48/72 hours to process, or even more, is not unreasonable. It doesn't matter if an affiliate was involved or not. They bought YOUR product and YOU owe them the refund. There are numerous ways to handle it, but giving your affiliate a couple of days to issue the refund is perfectly acceptable. More than that and I'd disable their account.

Regardless of who caught the commission, there are other things that could necessitate a delay.

The fallacy of this "I'm in TOTAL CONTROL" theory is that you have virtually NO control over what your merchant charge account processor might do. If they freeze your account, you have no excuses. "Uh, well, sorry, I can't issue a refund because my merchant processor froze my account." Doesn't matter if it's PayPal or one of the bankcards.

Just remember, the likelihood of having one affiliate screw you is going to be fairly low -- because the affiliate is shooting himself in the foot as well. If they're making money from your product, they're not going to screw around and put future earnings at risk.

Your merchant processor, on the other hand, is playing by an entirely different set of rules. They don't care what your refund rate is if your sales suddenly and unexpectedly exceed their projections.

Sorry, but I'd rather take my chances with one not-so-bright affiliate over a merchant card processor any day! The affiliate might cost me one refund but his promotional efforts might garner me far more sales that I don't have to pay him because of his breech of contract. The merchant account processor, on the other hand, has me over a barrel for 100% of my revenues. I don't know about anybody else, but the prospect of THAT happening scares the Bejezus out of me!

I don't care who's in control as long as there isn't one single point of failure that can put me out of business. Well, that sounds great, except for most of us, there really are several: payment processors, web hosts, domain registrars, blacklists, server failures, hackers, etc. It'd complicated and expensive to have 100% redundancy of everything.

-David

Actually, merchant account processors typically give you the money within 3 days(typically FAR less). It is ILLEGAL for them to hold it back. PERIOD! AND, the money is YOURS from the moment of approval to the moment of dispute, BY THE CUSTOMER! AND if there is a chargeback, THEY have to pay!!!!!!! So they can NOT prevent you from having the money to refund. It is ILLEGAL!!!!!!!

And what happens if they break that law? The customer gets angry, issues a chargeback, and the PROCESSOR has to pay! AND, if THEY kept you from paying a refund, they have NO right to charge you for the charge back. BESIDES, the payment of the chargeback would come from what THEY stole from the customer and you. And they certainly DO care about chargebacks. If they go too high, THEY have problems.

PAYPAL is a different sort of animal. THEY deal with the merchant account, and YOU deal with them. STILL, they HAVE to deal with chargebacks. If the customer pays $100, Paypal gets $100. EVEN if they NEVER pay you, and close the account, if the customer does a chargeback, the processor has to pay, and they will CHARGE paypals account to get the money BACK!

BTW you should issue a refund as soon as you can. AND, if you cross a billing cycle, a refund request can become a chargeback demand real QUICK!

Steve

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Diver's

14 years ago

cant paypal do it on stand alone basis. [Just Paypal] no need to get involved with other services.. (correct me if im wrong) ?

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SageSound

14 years ago

Originally Posted by Diver's

cant paypal do it on stand alone basis. [Just Paypal] no need to get involved with other services.. (correct me if im wrong) ?

What's being discussed here are new features PayPal is offering via their API (Application Programming Interface) so third-party providers can have more flexibility in using PayPal.

PayPal is simply a payment processor. The only thing they deal with as far as affiliates go is their own affiliate program, and I'm not even sure it's still got any legs.

If you want to deal with affiliate payments, you'll need to use a third-party script of some kind -- unless you're paying 100% commissions across the board.

HTH
-David

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Diver's

14 years ago

Originally Posted by SageSound

What's being discussed here are new features PayPal is offering via their API (Application Programming Interface) so third-party providers can have more flexibility in using PayPal.

PayPal is simply a payment processor. The only thing they deal with as far as affiliates go is their own affiliate program, and I'm not even sure it's still got any legs.

If you want to deal with affiliate payments, you'll need to use a third-party script of some kind -- unless you're paying 100% commissions across the board.

HTH
-David

----------------------------------------------------------------

Thanks David, i was thinking of using clickbank for my new project (in 5 days). Less hassle maybe. PDC is great, but never upload any product there.

Maybe to much work for paypal to start their own clickbank like affiliate marketplace/service/program.

anyway... thanks.

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SageSound

14 years ago

Originally Posted by Diver's

----------------------------------------------------------------

Thanks David, i was thinking of using clickbank for my new project (in 5 days). Less hassle maybe. PDC is great, but never upload any product there.

Maybe to much work for paypal to start their own clickbank like affiliate marketplace/service/program.

anyway... thanks.

I guess you've got a lot of experience using Clickbank. PDC is pretty straightforward to use, and you can have products for sale on both.

Anyway, I think you're still confused. PayPal and Clickbank are completely different. Clickbank and PDC both use PayPal as well as regular merchant card processors to manage their transactions. They don't do it themselves.

PayPal is like "VISA" -- they provide payment processing. They are not in the business of competing with their customers.

What you're suggesting is like saying your local bank should start selling groceries or auto parts. No, they sell banking services *TO* grocery stores and auto parts stores.

FWIW, PayPal is owned by eBay, which is the world's largest online auction site. eBay doesn't do their own payment processing either, just like Clickbank and PDC. They let their customers choose who to use, but they give preference to the use of PayPal.

PayPal doesn't run the auctions, nor do they even advertise or promote eBay on their site. Not because it's "too much work", it's just not the business they're in. They do PAYMENT PROCESSING. That's it.

Clickbank, PDC, eBay, RAP, aMember, etc. -- they do NOT do payment processing. They USE PayPal.

HTH
-David

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Andy Fletcher

14 years ago

There been a lot of talk about the potential fraud, which makes people apprehensive to use RAP or the new adaptive payments models. I had exactly the same view but I recently decided I wanted to try RAP out anyway. Mostly because one of my biggest affiliates greatly dislikes Clickbank.

After several hundred sales of a $67 price point item, of which a significant number were done by affiliates (60% first tier, 15% second tier so there were loads of people who I'd never even spoken to) I had just one refund request that required more from me than a single email to the affiliate. And that one was just a case of a busy man with a backed up inbox.

The lesson I've learned from this is that the potential for fraud is a lot scarier than actually dealing with the issues. Don't let perceived threats hold you back in your business.

Andy

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AndyBlackSEO

14 years ago

I have my first 'paid' product on PDC and it is selling quite well. I like the platform so this is great news to hear. Looking forward to the changes! I'll also be putting my next product on PDC within the next couple of weeks. I wonder how this will affect Clickbank?

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Scott Million

14 years ago

Thanks for the heads up Mike. I'm wondering if this is a step toward establishing an affiliate marketplace like ClickBank or PayDotCom.

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Anonymous Affiliate

14 years ago

I dont know guys... Paying affiliates on the spot can become a can of worms when it comes to deal with refunds and chargebacks. Clickbank has mastered this issue holding a reserve for 3 months out of each account. Besides, the whole sales tax accounting is a nightmare when the product owner, the affiliate and the customer are located in different states. Clickbank deals with all that on their end which is great.

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seasoned

14 years ago

Originally Posted by Anonymous Affiliate

I dont know guys... Paying affiliates on the spot can become a can of worms when it comes to deal with refunds and chargebacks. Clickbank has mastered this issue holding a reserve for 3 months out of each account. Besides, the whole sales tax accounting is a nightmare when the product owner, the affiliate and the customer are located in different states. Clickbank deals with all that on their end which is great.

Citibank is a gateway for sellers of products. Paypal is not. Clickbank is required to take care of taxes. Paypal is required not to.

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Ruka

14 years ago

I think that there is still a big issue with refunds.

What if you have a product in a non-IM niche, with a 90 day money guarantee?

There is no way that you could expect affiliates to keep their cash in their paypal account for 90 days just in case there is a refund. And in fact, it makes a mockery of the whole idea of instant payments.

Actually - if Paypal could "hold" the affiliate payment for 90 days, and then pay the affiliates, AND send them any affiliate tax forms - now that would be perfect for me.

It would be similar to clickbank - but without the affiliate recruiting ability (which I don't want anyway because I don't want just anyone to be able to sign up) ... and much cheaper, and less effort for the vendor.

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gpower2

14 years ago

In theory, this sounds great! I only hope the reality is as promising.

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SageSound

14 years ago

Originally Posted by Anonymous Affiliate

I dont know guys... Paying affiliates on the spot can become a can of worms when it comes to deal with refunds and chargebacks.

Originally Posted by chickenlittle

I think that there is still a big issue with refunds.
. . .
It would be similar to clickbank - but without the affiliate recruiting ability (which I don't want anyway because I don't want just anyone to be able to sign up) ... and much cheaper, and less effort for the vendor.

Originally Posted by gpower2

In theory, this sounds great! I only hope the reality is as promising.

Errrr... why don't you guys grab a copy of RAP and try selling something for yourselves and see exactly what the REAL numbers are, instead of running around spewing off crazy opinions about what happens if the sky is falling? BTW, RAP has a 60-day 100% money-back guarantee. Do you think they're worried?

FWIW, Clickbank's refund rate is about 3x-4x higher than what RAP users have seen. Probably because there are so many folks who buy something and then ask for a refund just to get it for free.

Sure, that can happen with RAP, but I think there's a reason it doesn't, which is probably more psychological than anything. Returning something for a refund at Clickbank is like returning something to the grocery store. Returning something you bought via RAP is like walking up to somebody's front door, knocking on it, and telling the owner that you think his product is crap and you want your money back.

I don't get many refund requests, but I'd say fully half of them start out with the buyer filing a dispute directly with PayPal, rather than contacting me directly. People are generally very uncomfortable asking for refunds, especially if they're being dishonest about it in the first place.

This is probably part of the reason why products sold via direct payment mechanisms have lower refund rates than sites like Clickbank and PDC.

Also, every time I mention about PDC to affiliates, I hear complaints that people weren't paid on-time or even at all. It seems to be the biggest impediment to affiliates wanting to use PDC to sell stuff. If that's true (and Mike sure would be the one to know this), then PayPal's latest announcement will light a fire under PDC's business b/c it will eliminate one of their biggest, if not THE biggest, issues with affiliates.

The nice thing about Clickbank is you get paid regularly, automatically, even if there's a delay in your payments. PDC relies on the vendor to send out payments.

RAP pays affiliates IMMEDIATELY.

If you need to pay your rent or make a car payment or something TOMORROW, which one is going to be the most helpful? A service that pays you in 6-8 weeks? Or one that pays you IMMEDIATELY?

Refunds are a red herring! All the long-time RAP users are saying it's a non-issue, while all of the arm-chair quarterbacks keep whining that "it sounds like a can of worms". Who 'ya gonna believe? What's it costing you to sit on the sidelines and worry?

In today's economy, what do you think will motivate your affiliates more? INSTANT PAYMENTS? Or Delayed Gratification?

BTW, most affiliate sales you make TODAY (mid-November) will pay you MAYBE in time for Christmas.

Affiliate sales you make through RAP TODAY will pay you ... TODAY.

Think about it.

-David

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Popstar

14 years ago

I appreciate the warriors who took the time to respond to my comments in a reasoned and professional way. But I do think there were some warriors who responded to others in this thread in an inappropriate manner. And that's the only reason that I've decided to comment one more time.

First, merchant processors can and often do hold a portion of your money in reserve (sometimes for up to 6 months) if you do a lot of sudden volume. There are some big Internet players who get credit lines to cover payments to affiliates during that time. Reserves can also impact their ability to pay estimated tax in the US in a timely manner.

Second, while I don't want to get into a personal dispute with anyone on the forum, I have to say that I found this comment to be completely off-base, if not downright offensive...

Originally Posted by SageSound

Errrr... why don't you guys grab a copy of RAP and try selling something for yourselves and see exactly what the REAL numbers are, instead of running around spewing off crazy opinions about what happens if the sky is falling?

Refunds are a red herring! All the long-time RAP users are saying it's a non-issue, while all of the arm-chair quarterbacks keep whining that "it sounds like a can of worms". Who 'ya gonna believe? What's it costing you to sit on the sidelines and worry?

Sentiments like that have been expressed many times in the investment banking world from people who are supposed to be financial geniuses.

But it's those very same financial geniuses who have brought the US and sometimes the global economy to the brink more than once.

There have been any number of big financial meltdowns that have been precipitated by a group of people who "changed the game" financially. And the game-changer was always a new way of dealing with (and usually ignoring) risk... followed by the herd mentality that caused everyone else to adopt it or miss out on a new way of making big profits.

What caused so many people to lose their homes last year?

If I remember correctly, sub-prime mortgage lenders decided to ignore the risk and lend to people with poor credit in what appeared to be a robust housing market. Then interest rates rose, housing prices started to fall, and the market collapsed like a row of dominoes.

Oh and there was a component of fraud with some lenders, too.

Bernie Madoff, former Chairman of the Nasdaq stock exchange, was getting consistent phenomenal investment returns (on paper) when just about everyone else was having trouble in the financial markets. Turned out to be a massive fraud by a very trusted individual which caused many of his investors to lose their life savings. It even affected the survival of some charities.

Only a few people raised red flags about the risk of dealing with Madoff. They were repeatedly ignored or criticized. After all, how serious could the risk be if so many people had been making so much money for so long from such a well-regarded man?

The investment "geniuses" at Long-Term Capital Management in the late 1990s almost brought down the economy... it was all about a new way of viewing risk by some prominent financial bigwigs, including a couple of Nobel Prize-winning economists.

There are lots of other examples, but I think I've made my point.

I'm glad that the people who are using this method of instantly paying their affiliates have profited and incurred no serious losses so far. I hope it will stay that way.

But the others who have talked about the risk of fraud or nonfulfillment, especially with physical products, are not "armchair quarterbacks." Even a formerly legitimate affiliate can send you a lot of volume, hit hard times, and bail on you.

The risk (and size) of loss depends on your volume, the price of your product, delivery issues, and the very real risk of fraud (perhaps in a way that we can't even imagine yet).

Each of us has to make his or her own decision about using the instant commission structure. But the reason I decided to make this final comment was because I didn't want anyone, especially the newbies, to feel stupid or bullied into using an instant commission system if they don't feel comfortable with the risk.

However unlikely to occur, the risk is real. And the bigger your business, the more you have to lose.

Debbie

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SageSound

14 years ago

Originally Posted by Popstar

Second, while I don't want to get into a personal dispute with anyone on the forum, I have to say that I found this comment to be completely off-base, if not downright offensive...

Originally Posted by SageSound

Errrr... why don't you guys grab a copy of RAP and try selling something for yourselves and see exactly what the REAL numbers are, instead of running around spewing off crazy opinions about what happens if the sky is falling?

Refunds are a red herring! All the long-time RAP users are saying it's a non-issue, while all of the arm-chair quarterbacks keep whining that "it sounds like a can of worms". Who 'ya gonna believe? What's it costing you to sit on the sidelines and worry?

. . .
The risk (and size) of loss depends on your volume, the price of your product, delivery issues, and the very real risk of fraud (perhaps in a way that we can't even imagine yet).

Each of us has to make his or her own decision about using the instant commission structure. But the reason I decided to make this final comment was because I didn't want anyone, especially the newbies, to feel stupid or bullied into using an instant commission system if they don't feel comfortable with the risk.

However unlikely to occur, the risk is real. And the bigger your business, the more you have to lose.

Debbie

I'm sorry if my comment was off-putting to some folks here.

The point is, the risks of refunds are dependent on many factors, none of which have to do with the payment mechanism and whether affiliates are being paid immediately or not.

Last week I got two sales of a product on RAP within 45 minutes of each other. They both came through the same affiliate link.

One was from a guy in the New Jersey area of the US, and the second was from a guy in Denmark.

I got the first commission, the affiliate got the 2nd commission.

The next day, I got a notice of dispute from PayPal that said the funds had been suspended pending some further matters, including the shipping address I shipped the products to. Well, no shipping address was given, and I didn't ship anything. In fact, neither one of these buyers even bothered to go into the download area and download the product.

Long story short, I contacted Sid (the RAP designer) and he said it followed a pattern he'd seen before that was indicative of a stolen credit card. I called PayPal and discussed it with them, giving them whatever info I had that might help. The "dispute" is still pending, but I expect it will turn up as a stolen card and the funds will be kept by PayPal or whomever.

And what about the "affiliate" in this case? I don't know. PayPal won't say, and he never contacted me. The guy at PayPal assured me that I was NOT LIABLE for that payment AT ALL.

Based on what the PayPal guy told me, the action seems to have been initiated by the credit card merchant itself, as a result of their anti-fraud detection system.

Now, assuming this was a stolen credit card and the thiefs were simply trying to verify if it was still good or not, it was probably just coincidental that these guys used it with one of my products and affiliate links. They could have bought gas, or groceries, or bought something at Clickbank ... any number of things.

The fact that I was using an "immediate payment" script and that an affiliate was involved was totally irrelevant.

What I'm trying to say is ... THE RISKS ARE THE SAME!

I've used DLGuard for several years, and I've had fraudulent credit card purchases made through it as well. It doesn't even support affiliate payments!

NEWBIES BEWARE! Yes, there are RISKS involved in doing business online! Is that a surprize?

There are cheats and frauds and serial refunders and all kinds of crackpots. People will buy something and file a dispute or chargeback within 5 minutes or 5 days. When that happens, chances are they already made up their mind BEFORE BUYING!

And from all the evidence I've seen, they don't seem to prefer "instant payment" scripts over other payment options.

But, the Good News is ... in over 90% of the sales we make, nothing unusual happens.

Whether you use RAP or DLGuard or $7 Secrets script or Clickbank or PDC or just a plain old PayPal Payment button, the risks are exactly the same.

Since someone is in the mood to warn newbies about risks ... there sure do seem to be a LOT of people complaining about losing credits for sales processed through Clickbank lately. Compliaints like this seem to come in waves here in the WF, every few months. People with PROOF! Yet, nothing ever seems to be done about it. Newbies are constantly told to "sell Clickbank products", but are never warned of the fact that Clickbank goes through periods of time when referred sales just magically disappear. Oops! You can't track them. You can't verify them. And worse, Clickbank has never admitted there's ever a problem, in spite of the overwhelming evidence dozens of people right here in this forum collect!

On the other hand, where are the complaints to be found about missing affiliate payments from instant payment scripts like RAP? You'd figure with thousands of products being sold through RAP, surely there must be a FEW complaints? The only folks here with direct experience say it's a non-issue.

That IS what all the hubub is about, right? How BAD all of these supposed "risks" are with "instant payment" scripts.

If they ARE REAL CONCERNS, then WHERE in the heck are all the folks complaining about it? <shrug>

All we're hearing is people saying how bad it "might" be or "could" be, and the folks who've been doing it for a few years who say, "it's a non-issue".

-David

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tschlotter

14 years ago

I wonder if e-junkie is going to implement the instant affiliate pay feature?

I hope so, I've been paying my affiliates via mass pay every two weeks and they would love being paid instantly I'm sure! Especially since my product is an 'instant commission' e-book.

I think I'll check and see if my old paydotcom account is still open!

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AverageGuy

14 years ago

well, to my understanding, this is NOT a good news to vendors of intangible products. It will be a nightmare because of fraud.

david

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Sid Hale 14 years ago

David,

Originally Posted by AverageGuy

well, to my understanding, this is NOT a good news to vendors of intangible products. It will be a nightmare because of fraud.

Sorry - but your understanding is incorrect.

Have you even read the posts here from people who have been offering their affiliates instant commission payments for years?

I've been doing it with 4 products of my own for over 2 years (see my sig) and I promote a number of "instant commission" products that others have developed. These are digital downloads. Others have as well.

The original thrust of this thread is that Paypal has now offered a means to allow others to do the same. Of course, their solution doesn't provide a way for you to track affiliates or their sales, ban them, or build customer lists or any of the other things necessary to run your business. So their new Adaptive Payments technology will have to be integrated into whatever system you might use, and it'll take some time to develop those solutions and thoroughly test them. (of course you could always "roll your own').

Mike Filsaime has stated his intention to implement this feature for PDC. I intend to make this an option for RAP customers, as well.

Others may/may not follow suit, but that's not important because the system developers (RAP), marketplaces (PDC), etc. aren't the real winners here. It's the merchants who use these features, and the affiliates of those merchants who will benefit most.

If anything, the experiences of 1600+ RAP owners (with who knows how many individual sites), all selling their own products, have already validated the concept. Paypal is just implementing payment processing functions that will make it easier for others to capitalize on the potential for their own businesses.
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Jill Carpenter

14 years ago

Originally Posted by swithat

Thanks a million for this supper update

Supper? No one told me it was supper time.

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MWick

14 years ago

That is indeed good news. It has been a while since we saw something new from Paypal other then their design changes.

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sydneyguy8

14 years ago

Can some body tell me how can I install api certificate in a website?

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Popstar

14 years ago

The risk isn't in the script. I'm sure that both Sid and Mike have designed fine products. And there's no doubt that it's wonderful from an affiliate standpoint.

But as a business owner, the risk comes from someone else receiving money from the sale of your product before the refund period expires or in the event of a massive fraud or in the case of a physical product, if your fulfillment company folds before you've sent the product and so on. You don't have control of all the money so the risks aren't the same as if you do.

Maybe the affiliate is liable in some cases. But you've got to find him and collect first. Not always easy to do.

Maybe Paypal will let you off on a few sales. But if a lot of money is involved and they find this isn't working well for them, they may change the rules. A lot of people complain about frozen accounts with no warning, too.

Yes, there's risk in any business venture. That's why the bigger companies engage in risk management.

One or two sales of an inexpensive product can be covered by anyone. But a high dollar volume with financial shenanigans could bring down a company.

That's all I'm saying. None of us can say with certainty how this will play out in the long run.

It doesn't have anything to do with Sid. I've heard nothing but great things about him and on the basis of his reputation alone, I almost purchased RAP a while back.

I'm not yet comfortable with the risk, however improbable. But to those of you who are comfortable with it, I wish you the best.

Debbie

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SageSound 14 years ago

Originally Posted by Popstar

That's all I'm saying. None of us can say with certainty how this will play out in the long run.

The $7 Secrets Script has been around for 3+ years.

The RAP script has been in use for 2+ years.

What kind of "in the long run" is acceptable in this case? If 2-3 years isn't sufficient, then Mike probably shouldn't bother upgrading PDC since everybody will just be sitting around waiting to see what the "real risks" are.

The "real risks" right now, today, are NOT with REFUNDS! They're with vendors who don't pay commissions in a timely manner, or at all! THAT is why Mike is so excited about this! It gets them out of the loop.

In case anybody is wondering why I'm being so vocal about this, it's because I have personally been STIFFED on THOUSANDS OF DOLLARS of affiliate earnings I've generated over the past 4 years by vendors who had nothing but excuses when it came to paying many of their affiliates.

There's a HUGE difference between referring a sale where you get paid IMMEDIATELY and one where you not only don't get paid for a while, but you cannot even check the payment status or even verify if the sales went through, and where you might not EVER get paid for whatever reason.

I'm speaking as an affiliate here -- I have lost FAR MORE in unpaid commissions than all the refunds I've ever had on my product sales in total.

And judging from the volume and frequency of complaints right here in the WF, there are a TON of Clickbank affiliates who are feeling my pain here in terms of getting cheated out of their commissions. This stuff absolutely DWARFS the refunds!

Personally speaking, I prefer getting paid immediately for sales I refer, rather than trusting affiliates in foreign countries against whom I have no legal recourse for failing to pay commission earnings.

But, hey, y'all can keep worrying about the risk of refunds, which have been relatively constant at ~5% for years across all payment mechanisms, and ignore the risk of losing entire commissions for undetectable and indeterminate reasons.

-David
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Popstar

14 years ago

David,

You and I are talking apples and oranges. You're speaking as an affiliate; I'm talking as a business owner. I've already said that I agree that the instant commission structure is wonderful for affiliates.

As to the risk for a business owner, a couple of years doesn't mean the risk has been uncovered. Not to mention, it's more about volume of sales than time.

My area of expertise is finance. I know what I'm talking about.

It's not about the 99% of transactions that work and affiliates who are honest; it's about the 1% of them that could take your company down.

Same reason most people buy insurance. You don't buy it for the everyday events. You buy it for the outliers that can financially ruin you. Especially if you have a lot to lose.

You love instant payments. That's great and I'm happy for you. But you're treating the rest of us as though we have no business experience and you're using very demeaning language to characterize anyone who disagrees with you.

You're entitled to your opinion. But so are the rest of us.

I was more than willing to listen to the people who were trying to allay my concerns. In fact, I pressed the "thank you" button a few times. In the event that someone can convince me that this structure is safe enough, I'll try it.

I thought Richard Wing's approach was particularly helpful.

But so far, I'm not convinced. That's my opinion... and apparently, the opinion of some others who have commented on this thread.

I'm sure you're a decent person. And I can see why you would be angry at the people who cheated you, especially if some of them are highly-regarded marketers. Personally, I don't believe all the income claims I see bandied about by Internet marketers. The numbers don't always add up, in my opinion.

But that's exactly my point. How things should work isn't always how they do work.

I'm not going to continue to debate this with you. I've already said why I chose to highlight your "armchair quarterback" comment, among others. And I stand by what I said.

I wish you the greatest success with your business and I do hope that you receive all of your affiliate commissions from now on.

Good luck to you,
Debbie

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Sid Hale

14 years ago

Hi Debbie,

Originally Posted by Popstar

David,

You and I are talking apples and oranges. You're speaking as an affiliate; I'm talking as a business owner. I've already said that I agree that the instant commission structure is wonderful for affiliates.

Actually, David speaks from both a merchant AND an affiliate's perspective. He is a very satisfied (can you tell) RAP customer, and he sells product using RAP. He is also an affiliate for other people's RAP-driven products. (as am I)

As to the risk for a business owner, a couple of years doesn't mean the risk has been uncovered. Not to mention, it's more about volume of sales than time.

My area of expertise is finance. I know what I'm talking about.

It's not about the 99% of transactions that work and affiliates who are honest; it's about the 1% of them that could take your company down.

If you review the Paypal presentation that Mike linked to in the OP, you'll see that in this model, the customer pays the affiliate directly. That same concept has been designed into the RAP model.

In both models, the affiliate is treated as the merchant for any given sale. Paypal's recourse is against that affiliate - not the creator of the product. In essence, affiliates are more like "resellers", and there is no financial tie to the product creator.

Paypal processed a financial transaction. If there is a refund, it can only be against the account that received the payment (the affiliate). So, a fraudulent affiliate ultimately pays the price. Their actions don't imperil a merchant's account status.

That 1% is less likely to make a blip on your radar screen - much less take your company down. They won't go away. We all know they will be around trying to "one up" the system, forever - but fear of change and the paralysis that results, can be much more damaging.

Heck, those fears can keep you from getting launched in the first place (but at least you wouldn't have to worry about that 1%).

You love instant payments. That's great and I'm happy for you. But you're treating the rest of us as though we have no business experience and you're using very demeaning language to characterize anyone who disagrees with you.

Maybe David is a little "vocal", or "adamant", but "demeaning"? Come on... he's frustrated (my opinion) at others not having had the "light bulb moment" and the uninformed comments that have been made.

I'm sure that's where the "armchair quarterback" comment came from. (Did he say that, or did I? If I didn't... I was certainly thinking it.)

You're entitled to your opinion. But so are the rest of us.

Yes. Everyone is entitled to their opinion, but opinions have value only if they are informed opinions (you certainly don't want medical advice from me), and many of the opinions expressed just can't be backed up with research, experience, or facts.

Unfortunately, other people read them and many are gullible enough to believe them - so others (like David) feel compelled to rebut them. Isn't that's what forums are for - open discussion, debate, transfer of knowledge?

Thanks

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SageSound

14 years ago

Originally Posted by Popstar

David,

You and I are talking apples and oranges. You're speaking as an affiliate; I'm talking as a business owner. I've already said that I agree that the instant commission structure is wonderful for affiliates.

As to the risk for a business owner, a couple of years doesn't mean the risk has been uncovered. Not to mention, it's more about volume of sales than time.
. . .

My last post was mainly as an affiliate, but my previous posts were mainly as a vendor. Regardless, there doesn't seem to be anything anybody can say no matter how much direct experience RAP users have employing this payment mechanism that's going to satisfy some people. When Mike implements it in PDC, it's pretty clear that there will STILL be a lot of folks who will sit at the sidelines and avoid it just because of the "perceived risks".

I'm sorry if it seems arrogant to invite people into the water to alleviate their fears of swimming. The crocs and snakes live in your imagination, and those of us in the water are quite happy. But human psychology being what it is, people are going to make up their own minds for their own reasons, and sometimes the FACTS just aren't convincing.

If RAP were a brand new product and there was no sales history behind it, that would be different. But if 2+ years of transactions by nearly 2000 people, more than 10,000 products, and maybe a million transactions isn't sufficient to uncover the risks you perceive to exist, then there's really nothing more to be said. It'll NEVER be mature enough for you to use.

The alternative as a merchant is that you need to collect and disburse commissions on a regular basis, manage 1099's for your affiliates, deal with tax issues between domestic and "off-shore" affiliates, and put your affiliates at risk of not being paid for quite a while if your payment account gets frozen, which DOES happen from time to time. (There are no sales tax issues I'm aware of that need to be addressed using RAP, but that might change in the future.)

As an affiliate, you have to wait for 60-90 days to get paid, and you risk not getting credited for sales you referred and/or not getting paid at all. Based on my personal experience, I assert that the risk of these scenarios happening is FAR HIGHER than any problems that may arise from refunds around an immediate payment mechanism. But the arm-chair quarterbacks are free to disagree "in theory".

FYI: In case it hasn't been mentioned, if YOUR PayPal account is frozen for some reason -- as a merchant -- an instant commission payment mechanism like RAP does NOT prevent your affiliates from being paid! And since you're actually taking in a far smaller percentage of sales, the REAL RISK of having YOUR account frozen due to a surge in income is WAY LOWER.

By rough calculations, there are more total products being sold through RAP than there are through Clickbank, although the volume of sales on Clickbank are higher because it's a much more mature site that's been around much longer. It also hosts all of its products under one domain, while RAP lets you sell stuff from as many domains as you might want to use.

I'm aware of people (individuals) who have more than 1000 products for sale under RAP on their various domains, and those numbers are growing. Many have over 100, and lots of us have over a dozen.

Product prices vary from free to nearly $1000. They include single-payment and multi-payment (ie., recurring) options. There are simple mini-site sales pages all the way to sophisticated membership sites.

And that's just RAP. There have been tens of thousands of copies of the $7 Secrets Script distributed, and who knows how many products are being sold with it.

Here's the REAL "bottom-line": If you describe your product accurately and truthfully and you deliver value to your customers, you won't have significant problems with refunds. That's the risk that you as a MERCHANT have direct control over.

As far as the risks you do NOT have control over, I keep saying this over and over: it does not matter what the payment mechanism is!

If someone decides to set up some kind of a scam, they're not going to pick victims because of the affiliate payment mechanism that might be employed. And using RAP to set up a scam will be no more beneficial to them than using DLGuard, the $7 Secret Script, Clickbank, or just a plain old PayPal Payment button. Again, the risks are the same regardless. They're outside the merchant's control.

Either way, you fall back to PayPal's dispute resolution mechanisms to deal with uncontrollable risks. Sometimes they work in favor of the merchant/affiliate, and sometimes in favor of the customer. These policies have been around for years, and won't need to change much to address the new API functions. Again, they've been PROVEN TO WORK for over 3 years now.

Speaking as a merchant, refunds using this form of instant affiliate payment mechanism have been a non-issue for me, and apparently also for the other RAP users who've taken the time to reply here. That message just doesn't seem to be getting through.

Speaking as an affiliate, getting paid immediately is much preferred over waiting and waiting for commissions checks, which sometimes never arrive.

There really isn't much more that can be said. Either someone is going to feel comfortable that the 2+ years and 1M+ transactions that PayPal has processed using RAP is sufficient to have uncovered the REAL RISKS involved, or you won't. Apparently there's not much that long-time RAP users can say that will alleviate everybody's concerns, so once PDC implements such a payment mechanism, they won't be any more inclined to use it there than to use something like RAP today. And that's perfectly fine.

But if you're into affiliate sales, and you want to earn commissions PAID INSTANTLY between now and Christmas, you're advised to look for some RAP-based sales sites and promote THEM, because most affiliate programs are not going to pay you your commissions for sales going forward until AFTER Christmas at this point. You might have to issue a few refunds, but don't expect that to happen more than about 2% of the time for legitimate products -- based on 2+ years of sales history of RAP merchants.

'nuf said.

-David

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Chris Cabo

14 years ago

Thanks for the heads up Mike.
Enjoy your day.

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mrsmaxxx

14 years ago

Thanks Mike,

As a LDC member, I'll be watching!

Dale

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Popstar

14 years ago

Sid,

I thought seriously of not responding to this thread any longer so as not to have this become a personal battle. As I've said, I intend no criticism of you or your product or anyone's product for that matter. But I do have concerns about how an instant payment commission system would affect my business.

So, if you would be so kind, I'd like to ask you to answer one final question for me...

I want to preface this by saying I'm quite serious about this; I'm not trying to be confrontational and I'd appreciate a professional answer without anyone telling me that I'm crazy, idiotic, or misinformed for daring to ask.

Setting aside potential issues of fraud for the moment... and assuming that you're correct that an affiliate would be considered to be a reseller under this structure and that I, as a business owner, would have no legal liability for the refund of any payments made to affiliates...

What is the benefit to me of using RAP or any other instant payment commission structure if:

1. I employ accountants so I don't care if I have to issue 1099s or do any other kind of accounting for affiliates because it doesn't really affect the cost structure of my company...

2. If Paypal freezes my account, it doesn't affect my ability to pay affiliates, issue customer refunds, continue to run my business or put food on my table (in other words, I have sufficient funds elsewhere no matter how much Paypal freezes)...

3. My company's reputation is paramount to me and I would rather issue refunds without question to any customers who've been stiffed by unethical affiliates than force them to go through the often frustrating Paypal dispute resolution system, even if it means that I take a loss (and I have done so before when I had technical difficulties with a shopping cart) if an affiliate refuses to issue a timely refund...

Again, I'm talking about my priorities only. I'm not basing my decision on whether someone else got cheated as an affiliate.

To me, the instant payment commission structure appears to shift the risk of loss from the affiliate to the business owner. If that's not so, please tell me what I'm not seeing (keeping in mind that I intend to refund customers who've been cheated by my affiliates).

Also, is Paypal the only method of paying affiliates under this structure? In one of David's comments, he said that Paypal wouldn't identify his affiliate when there was a potential problem. Are there any safeguards built into your product (I know you can't speak for others on this one) to actually identify affiliates who behave this way?

Okay, I guess I've asked more than one question. But those are my concerns for my business beyond fraud and the legal status of the affiliates as resellers (which I'll resolve on my own).

Thanks in advance,
Debbie

Thanks
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Sid Hale

14 years ago

Hi Debbie,

Originally Posted by Popstar

Sid,

I thought seriously of not responding to this thread any longer so as not to have this become a personal battle. As I've said, I intend no criticism of you or your product or anyone's product for that matter. But I do have concerns about how an instant payment commission system would affect my business.

...and I hope you didn't take anything I said personally. Your input on this topic has been some of the more rational, and your questions were welcome.

So, if you would be so kind, I'd like to ask you to answer one final question for me...

<snip>

To me, the instant payment commission structure appears to shift the risk of loss from the affiliate to the business owner. If that's not so, please tell me what I'm not seeing (keeping in mind that I intend to refund customers who've been cheated by my affiliates).

I also refund customers when an affiliate doesn't take care of it. I won't leave a customer out in the cold.

Often, the customer opens a resolution with Paypal, so if the sale was awarded to the affiliate, it's the affiliate's Paypal account. Paypal doesn't even know I exist, with regard to that particular transaction.

That said, I certainly try to get the affiliate to voluntarily honor my guarantee (60 days). If the customer contacts me, I forward the request to the affiliate.

Usually, the affiliate will take care of the refund (they know that the customer can just come against their Paypal account), but if they don't - I cover it myself, and then I ban that affiliate. Any other referrals from a banned affiliate, are automatically awarded to me.

Also, is Paypal the only method of paying affiliates under this structure? In one of David's comments, he said that Paypal wouldn't identify his affiliate when there was a potential problem. Are there any safeguards built into your product (I know you can't speak for others on this one) to actually identify affiliates who behave this way?

It's the only payment method that RAP supports. I won't go into the "why's", but while we have looked at adding other options, insurmountable obstacles have thwarted each effort, to date.

As for Paypal not identifying the affiliate, we do currently allow an affiliate to promote without registration (i.e. with Paypal email address). The next release will have the option of disallowing promotion by unregistered affiliates. As mentioned earlier, RAP also provides the ability to Ban affiliates, and will not put any subsequent sales through their account.

Hope this helps,

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Michelle Brouse

14 years ago

Ok, I've just read bits and pieces here, but I'm a rap user. I think Sid has a great product, and that he treats all of us clients REALLY well. He is available at all hours and has NEVER let me down. I've owned rap since it was new at 67 bucks with lifetime upgrades, and he meant lifetime, cause I never fail to get an update.

Here's how I work things... incidentally - just had a paypal dispute over a rap product. My client did not get their download, and DID send me an email first - but I never saw it. I had no clue anything was wrong, till I caught the dispute in paypal.

He paid with an echeck, and Sid... doesn't RAP STILL automatically route to the DL link even if it's an echeck? I don't care if someone pays with an echeck and gets the download automatically after that - but apparently this person did not.

Well, once I figured out what the issue was, of course I fixed him up with a link and the dispute was dropped. Client and I are just fine, just happened that he didn't get routed automatically, and said that he didn't expect to - because of the echeck. I didn't KNOW that he didn't get routed automatically, or I would have sent him a manual link.

Point being - anyone running a business online should consider their clients top priority. Heck a business period, even OFFLINE.

If there is an issue, and it's YOUR product - YOU fix it. I don't care if one of your affiliates sold YOUR Product - and they come to you and say "HEY - I got a refund request on your Product - what do I do?"

You say - "refund your client through your paypal account, and I'll pass the cash to YOU for being the affiliate."

IF you are on a rap channel that is basically how it would work to my knowledge. Why would the affiliate be responsible for a refund on YOUR product? They didn't create it - you did. Yes, they sold it - so what. Why should they take the loss on YOUR product?

Well, that's just the way I see, it and call me goofy - but I don't have any problem refunding for an aff because they are helping ME! It's MY prod. Not theirs. If they help me sell, then I at least OWE them that favor.

Now, I know there are affiliates that can also get you into trouble for spamming and what not, but so far I have not had that kind of trouble. I would block a person like that pretty quick, but seriously - I don't see any issue with refunding a client of your own product whether it was sold from YOU or from your AFFILIATE.

K, jump all over me about that view. I can take it.

Thanks!
Michelle

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Michelle Brouse 14 years ago

all right, I finally read through the rest of this post.

shees.

Why does everyone have to make everything so complicated for one, and for two - nice of Mike to stop by and let us know what was up with this.

Led to a lot of great discussion, some I'm for, some I'm not - as per post above.

Be nice if Mike would discuss a bit more after bringing it up however - seems his second post after beginning it in the first place was to defend the "high buck status" instead of saying what he's plannin on doing, what he's not, what he thinks etc.

I really have no room to talk cause I haven't been in here in forever, but crap. Start a thread, at least join in. And that ain't personal. Don't care if you have money or not, see what I'm sayin?

And I'm particularly surprised at the folks who are so worried about refunds, chargebacks, etc.

Makes me think I don't sell enough - or something. (ha!) - because if yer selling why the issue in the first place? My gosh, is everyone on this planet so geared to what matters for THEM and THEIR sales that they don't give a crap about THEIR clients, or little folks like me who do enough to pay the bills?

It seems to me, that it's the exact thinking (over thinking - over analyzing - just in it for me) mentality that creates half the freakin problems, not only on the net but off it too.

Come on people.

It ain't just me.

Thanks,
Michelle
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Sid Hale

14 years ago

Thanks Michelle,

Originally Posted by Michelle Brouse

He paid with an echeck, and Sid... doesn't RAP STILL automatically route to the DL link even if it's an echeck? I don't care if someone pays with an echeck and gets the download automatically after that - but apparently this person did not.

No. That customer will see the payment timeout screen (there's verbiage there to indicate that he/she will receive a download email when their payment clears).

In fact, Paypal advises that you don't deliver goods to someone who's paid by eCheck until the payment clears - but I understand your point, and sometimes I will give a customer the product if he's paid by eCheck, depending on the price of the product and the "tone/believability" of the help desk ticket they submit when they don't get sent to the download.

If there is an issue, and it's YOUR product - YOU fix it. I don't care if one of your affiliates sold YOUR Product - and they come to you and say "HEY - I got a refund request on your Product - what do I do?"

You say - "refund your client through your paypal account, and I'll pass the cash to YOU for being the affiliate."

IF you are on a rap channel that is basically how it would work to my knowledge. Why would the affiliate be responsible for a refund on YOUR product? They didn't create it - you did. Yes, they sold it - so what. Why should they take the loss on YOUR product?

You can certainly do that, but there really is no need to re-imburse them for the refund. RAP will automatically set them up to be next in the rotation, so they will get their very next referred sale to compensate for the refund. If they were already scheduled to be next... they will now get their next 2 sales. Of course, that only works if they continue to promote for you, but if they don't, why should you be bailing them out on refunds?

RAP is already very "pro affiliate", so you really shouldn't have to bend over backwards to keep their loyalty.

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SageSound

14 years ago

Johnny has done an excellent job of restating what I've not been able to communicate effectively. But I did want to clariy this point for all concerned, because it's an excellent question:

Originally Posted by Popstar

In one of David's comments, he said that Paypal wouldn't identify his affiliate when there was a potential problem. Are there any safeguards built into your product (I know you can't speak for others on this one) to actually identify affiliates who behave this way?

Most affiliate software, including RAP, does give you the ability to know SOMETHING about your affiliates; if nothing more, you'll have their PayPal email addy.

For privacy reasons, PayPal won't discuss anything regarding anybody you may have paid, or who paid you. That is, they won't tell you anything you don't already know. In cases involving questionable transactions, this can be a bit infuriating if you're supposed to be the one deciding what to do, but nobody will tell you anything.

For example, people will sometimes file a dispute over silly things -- like they're pissed off that you won't reply to their emails, but you have, only they aren't checking their spam folder. So they think filing a dispute will get your attention. They're not looking for a refund; they just want you to stop ignoring them. PayPal doesn't really like those situations any more than you or I do, but there's very little they're willing to do to help resolve the situation either.

In case of instant affiliate payments, it's an even stickier situation because your customers pay your affiliates directly -- you're totally out of the loop. You only know that a transaction occurred, and you have whatever may be in the IPN email about it (if you get them), but other than that, you're really little more than an "innocent bystander" as far as PayPal is concerned.

It'll be interesting to see what happens once some software implements PayPal's new API's because it seems that payments will be split among multiple parties. That tells me that we, as vendors, will no longer be regarded as "innocent bystanders" by PayPal in such transactions, but will have a more active roll as a bona fide party to the transaction.

I doubt PayPal will alter their Privacy policies at all, but at least you may have some more legal rights that you don't have with current instant payment mechanisms.

It's hard to say right now. We'll just have to see how things unfold.

-David

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Johnny Slater

14 years ago

Debbie,

Using systems like RAP is not just about the benefits to "you." The main benefits of any instant payment system revolve around the affiliates, as they are designed in a specific way to encourage people to want to be your affiliate.

Instant payment systems are by nature affiliate focused because the entire concept of them is to make it easier to bring in more affiliates than people not using them.

The number one benefit to you personally by using an instant payment system is having a larger affiliate base who are actually happy to promote your products and who will actually take steps to do promotion because they know they won't get stiffed for commissions that they have built up over a few weeks or a month.

With standard affiliate systems there is always the risk that the program owner will just decide to not pay out the commissions and just pocket the extra money. This happens more than most people are willing to admit, and even some big names in IM have been guilty of this from time to time. With instant payment commissions this risk is removed and your affiliates are more willing to promote for you because they can trust that they will get their fair share because of the way that commissions are handled.

Honestly, what better benefit do you need than having more affiliates, and more affiliates who are actually happy to do some work to promote your products. Do you want 100,000 affiliates who wont do any promotion because they don't want to wait weeks to get paid a commission, or 5000 affiliates who promote every product you release because they know they get paid for every commission instantly?

Personally, I'll take the 5000 any day. Besides, if you can get 100,000 affiliates with a standard affiliate program then getting 200,000 would be a snap if those affiliates were paid instantly. It has been proven time and time again that instant commission structures actually improve your bottom line, involve less risk all around, and encourage more active affiliates. What more could you ask for?

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tommygreatboom 14 years ago

This is very good info.
Hope clickbank gonna apply this system soon.
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- Sid Hale 14 years ago
  
  Hi Tommy,
  
  Originally Posted by tommygreatboom
  
  This is very good info.
  Hope clickbank gonna apply this system soon.
  
  From my analysis of the new Paypal APIs, Clickbank will NOT be able to implement them. I've discussed this with other developers, and they have come to the same conclusion.
  
  The new API is for real-time distribution of revenue, and ClickBank's business model relies heavily on batch payment, with reserves held in anticipation of refunds. There is just nothing in their business model that would lend itself to real-time distribution of funds.
  
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  Sid Hale
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theinfomaven

14 years ago

My only question is this:

*WHEN* do all of these changes take effect?

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JAIDEEP2959

14 years ago

That is a great news.

Paydotcom will get more affiliates and can give strong competition to Clickbank.

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Johnny Slater

14 years ago

Steve, the IPN just sends notification of a transaction to a web site. What happens then is completely up to how that site is coded. It is quite possible to have an IPN script to notify multiple people of a single transaction. For instance, SMP currently sends an email to the buyer and to the site admin once the IPN has been notified of a transaction. It would only require a small amount of work to add in the ability to notify the affiliate who earned commisions, a site partner, or even 100 other people if it was wanted.

The IPN is just notification of a transactions details. What happens to that data after PayPal sends it out varies depending on what script it is sent to, but multiple notifications are done by many scripts and is a very common thing.

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seasoned

14 years ago

Originally Posted by Johnny Slater

Steve, the IPN just sends notification of a transaction to a web site. What happens then is completely up to how that site is coded. It is quite possible to have an IPN script to notify multiple people of a single transaction. For instance, SMP currently sends an email to the buyer and to the site admin once the IPN has been notified of a transaction. It would only require a small amount of work to add in the ability to notify the affiliate who earned commisions, a site partner, or even 100 other people if it was wanted.

The IPN is just notification of a transactions details. What happens to that data after PayPal sends it out varies depending on what script it is sent to, but multiple notifications are done by many scripts and is a very common thing.

I don't think any of you are following me. I was talking about the IPN, FROM PAYPAL! If you know of a way to change paypal's code with "a small amount of work", I'm sure we would ALL want to hear it. Of course, doing so makes it all the more questionable.

YEAH, I know another party could REPEAT it(Send a message that appears to be like IPN, or an email), but would they? Could you enforce it? Still, my main point is that refunds can get harder if something isn't done to handle that provision.

Everyone seems to just be trusting that refunds WON'T happen! HECK, I do Probably over 6 transactions a day. Over 1800 a year! They range from perhaps a dollar to THOUSANDS. I generally DON'T ask for refunds! Yet I have probably done so about 7-8 times, and did about 4-5 chargebacks, over the past 30 years. Some here talk like they have people that do refunds ALL THE TIME! So don't think it won't happen.

As for my saying "not aware" after "It can't be done", it is more of a giving you the benefit of the doubt, then anything else.

BTW in 2005 I DID work on an ecommerce package and added about 2 dozen charge gateways. Three of them were paypal standard, paypal pro express, and paypal pro. And that wasn't the first time I did that sort of thing. So YEAH, I do know how they work, and am familiar with IPN.

Steve

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seasoned

14 years ago

Originally Posted by Johnny Slater

Steve, the IPN just sends notification of a transaction to a web site. What happens then is completely up to how that site is coded. It is quite possible to have an IPN script to notify multiple people of a single transaction. For instance, SMP currently sends an email to the buyer and to the site admin once the IPN has been notified of a transaction. It would only require a small amount of work to add in the ability to notify the affiliate who earned commisions, a site partner, or even 100 other people if it was wanted.

The IPN is just notification of a transactions details. What happens to that data after PayPal sends it out varies depending on what script it is sent to, but multiple notifications are done by many scripts and is a very common thing.

I don't think any of you are following me. I was talking about the IPN, FROM PAYPAL! If you know of a way to change paypal's code with "a small amount of work", I'm sure we would ALL want to hear it. Of course, doing so makes it all the more questionable.

YEAH, I know another party could REPEAT it(Send a message that appears to be like IPN, or an email), but would they? Could you enforce it? Still, my main point is that refunds can get harder if something isn't done to handle that provision.

Everyone seems to just be trusting that refunds WON'T happen! HECK, I do Probably over 6 transactions a day. Over 1800 a year! They range from perhaps a dollar to THOUSANDS. I generally DON'T ask for refunds! Yet I have probably done so about 7-8 times, and did about 4-5 chargebacks, over the past 30 years. Some here talk like they have people that do refunds ALL THE TIME! So don't think it won't happen.

As for my saying "not aware" after "It can't be done", it is more of a giving you the benefit of the doubt, then anything else.

BTW in 2005 I DID work on an ecommerce package and added about 2 dozen charge gateways. Two of them were paypal standard, paypal pro express, and paypal pro(paypal pro express was required to use paypal pro, so I am counting the two as one). And that wasn't the first time I did that sort of thing. So YEAH, I do know how they work, and am familiar with IPN.

Steve

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Sid Hale

14 years ago

Hi Steve,

Originally Posted by seasoned

I don't think any of you are following me. I was talking about the IPN, FROM PAYPAL! If you know of a way to change paypal's code with "a small amount of work", I'm sure we would ALL want to hear it. Of course, doing so makes it all the more questionable.

Sorry, but YOU are the one that isn't understanding. No one is changing Paypal's code. An IPN is sent to the MERCHANT's IPN script (in our case a RAP supplied script, and the same for all merchants running RAP).

It does recognize and process refunds. It marks a sale in the RAP database as refunded. If running one of the Certified RAP Add Ons, it cancels subscriptions and disallows login by that customer from that point forward.

Paypal is just the payment processor. Using the IPN mechanism, it notifies the script (in this case, RAP) of everything pertaining to the original purchase (including cancellations and refunds), and then it is the script's job to take the necessary action - which RAP does nicely, thank you.

YEAH, I know another party could REPEAT it(Send a message that appears to be like IPN, or an email), but would they? Could you enforce it? Still, my main point is that refunds can get harder if something isn't done to handle that provision.

And our point has been that something IS done... and HAS BEEN being done. It's not a new problem, nor is RAP a new solution, and Paypal handles these issues as well as, if not better than, any other payment processor available.

Instant Payment Notification allows a merchant to get all of the financial information direct from the payment processor, on a real-time basis. Since the IPN processing is a background, server-to-server process, the merchant's IPN script can process the transaction data prior to showing the "customer" a download page, and disallow the download if there is a recognizable problem.

Could you do it? I don't think so. Not without spending a lot of development time or dollars to have it custom written for you - but then neither could most of my customers.

That's why it is supplied as part of the RAP script.

Everyone seems to just be trusting that refunds WON'T happen! HECK, I do Probably over 6 transactions a day. Over 1800 a year! They range from perhaps a dollar to THOUSANDS. I generally DON'T ask for refunds! Yet I have probably done so about 7-8 times, and did about 4-5 chargebacks, over the past 30 years. Some here talk like they have people that do refunds ALL THE TIME! So don't think it won't happen.

Steve, no one trusts that they won't happen, and no one implied that anywhere in this thread! You've just assumed it.

RAP users KNOW they happen. All of us receive them - but RAP and other IPN based scripts handle them within the functionality of that particular script.

Do we make them go away? Can we make them not happen?

NO! Nor can any merchant account. Nor PayDotCom, nor Clickbank.

But we can process them, after the fact, as well as any other solution out there.

Clickbank chooses to do it by holding your money (and your affiliate's) in reserve to protect themselves from fraud. A reasonable solution when there was no better alternative, but it doesn't reduce the fraudulent transactions. It just gives them a way to cover those transactions. Today, there are better solutions.

To the best of my knowledge, PDC has nothing in place to protect against this sort of fraud (nor to insure that affiliates get paid by the merchants), and it affects the value of the service that they provide. That is (in my opinion) why the potential for Paypal's new Adaptive Payments API is so attractive to Mike Filsaime. He can use that to enhance the service he provides, and therefore the value of the PDC marketplace.

RAP, on the other hand, (working within the constraints of the existing [pre Adaptive Payments] Paypal processing) provides a system today that gives as much (or more) protection as any other solution available, and STILL provides for "instant commissions" to the affiliates.

As for my saying "not aware" after "It can't be done", it is more of a giving you the benefit of the doubt, then anything else.

BTW in 2005 I DID work on an ecommerce package and added about 2 dozen charge gateways. Two of them were paypal standard, paypal pro express, and paypal pro(paypal pro express was required to use paypal pro, so I am counting the two as one). And that wasn't the first time I did that sort of thing. So YEAH, I do know how they work, and am familiar with IPN.

Whoa... YOU are giving ME the benefit of the doubt?

Before we get into that... saying "It can't be done" is not a problem. It was your use of the word DUMB in all caps, multiple times in your post, to which I take offense. I think you owe that person an apology.

Steve, I'm more than just "familiar" with IPN processing. I developed my first IPN script in 2002 and it is still running today. In 2003 that script was enhanced to process transactions for a second web site on a different server. Both sites are still taking monthly paying members today (and processing any refund requests, as necessary).

I'm an old fart, Steve. There aren't many jobs in IT that I haven't done, and for the past 25 years I've been self-employed (so there aren't many other hats I haven't worn, either). I don't want to get into a pi##ing contest, and there's no room here for my resume, anyway. Suffice it to say that, I don't need any special dispensation from you.

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Sid Hale
Coming Soon... Rapid Action Profits (Pro)

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romesaranto

14 years ago

Thanks for the heads up. Cleaning out the fraud should be very good for the industry. I really like the idea of the point of purchase commissions.

thanks again.

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Chris Pambos

14 years ago

Excellent post Mike Filsaime, this is definitely a game changer for internet marketing.

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Johnny Slater

14 years ago

Steve, he was talking about up front instant commissions and there are several scripts that have been around for a long time that do use this model. RAP has been around for 2 years providing real time commissions at the time of sale. It is not something new and considering it has been around so long I'm very surprised you have no clue about how it works.

RAP isn't the only script that works this way either. The $7 secrets script uses the same model, RAP was built as an advanced script built on the model that the $7 script introduced 3 years ago. Even SMP which has been out as long as RAP has allows this feature, provided you have the commission set at 100%. With 100% commissions the sale goes directly to the affiliate and anything less than 100% is held by the site owner and paid out later like a standard affiliate program.

I myself have spent the last 6 months developing my own full membership solution that pays commissions at the time of sale using very similar methods to the way that RAP works. Paying multiple people at the same time may be something new that PayPal just opened up but allowing real time commissions is not a new thing.

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DAS_Matt

14 years ago

So, when is this stuff supposed to be ready to go?

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