Should Affiliates Lose Commission For Refund?

The system could probably be a bit better, but in all honesty, what can you do?

Make the creator lose $20 when they only were going to make $10 in the first place?

Not really fair, now is it?

The system might not be perfect but it's the best it will probably ever be, oh well :/

It's the affiliate's job to find great products to promote and provide high quality leads.

If there's a lot of refunds because the product is rubbish the responsibility lies just as much with the affiliate not to promote it as it does for the product creator.

Being an affiliate comes with risks. One of those risks is that you'll have to return the commission if the buyer asks for a refund. Otherwise, dishonest affiliates could enjoy big paydays by having their friends buy up a ton of merchandise... and then requesting refunds later.

(Side Note: Sometimes refunds happen for reasons that have nothing to do with the product quality. For example, the buyer realizes he or she already has the product. Or maybe the buyer purchased software for a Mac but he has a PC. Or any number of other legit reasons.)

Generally, with great reward comes a bigger risk. If you want a smaller risk, then you need to be willing to settle on a model that also provides a smaller reward.

For example: Put AdSense on your site. You're not responsbible for anything except getting a click. There's no worry about refunds. All in all, it's a smaller risk... but that also means a smaller reward.

Cheers,
Becky

Yes, exactly that.

It isn't a $10 hit for each refund, if the product's been sold for $20. It's a $20 hit, of which the affiliate should take $10-worth, if that was his share.

Bear two things in mind (I'm speaking as an affiliate):-

(i) the proportion of sales refunded depends primarily on the sales process (i.e. mostly the affiliate), according to how the product was pre-sold, not on the vendor, as you can see from the fact that different affiliates typically have hugely differing refund-rates for the same product;

(ii) if the affiliate didn't somehow have to repay/lose his $10 share, the system would be open to abuse/fraud (his "friends" can all buy and refund, and he effectively pockets the difference from the vendor).

I wouldn't want to see a system where the vendor was responsible for the pre-selling sins of the affiliate, or a system that's more open to fraud than the ones around now.

If you make a sale, everybody get's a piece of the pie.

Have a refund, everybody has to give their pie back.

I understand your thinking that it's the affiliates job to refer a customer and after you've done that, your job is finished but that's just not the way it works.

It's the same in the offline retail world.

If you buy a TV, the salesman gets a commission and the store and manufacturer get their cut. If you return that TV, the salesman loses his commission and the store and manufacturer also lose their what they've made.

Mike,

Consider: Affiliate "promotes" product to audience that he knows will refund. Maybe he even encourages it. (Yes, this does happen.) Affiliate makes commissions and basically steals the money from the product creator under your scenario.

Or the affiliate buys through their own account, refunds, and gets the product and their commission, PLUS costing the merchant cash out of pocket.

Then there are instant commission products paid using RAP and similar products. If the affiliate doesn't refund sales processed through their accounts, there are serious potential problems. For example, if someone buys through Paypal using a checking or credit card account, and the merchant "refunds" those orders, the money doesn't go back into the original account.

That's likely to end up creating chargebacks against the affiliate and double-dipping by the buyer.

On top of those issues, there's the fact that making the affiliate responsible for their end of refunds helps to reduce the incentive for them to lie about the products they promote.


Paul

Sounds like you're confusing the roles of being an affiliate with that of a lead-generator.

Look at the definition of the word affiliate -

• A company with a minority interest in another company.
• To adopt as a subordinate partner, associate, or branch.
• Past participle of affiliare to adopt as a son.

So...the problem lies with the breakdown you made of the participants. As an affiliate, you become a minor co-creator of the product.

What you've described is actually the process breakdown for a CPA lead generator.

Affiliates do also have a role to play in the problem. There are some people that know how to send a large amount of Crappy leads. This is why some affiliates have a much higher conversion rates than others.

If I nurture a solid relationship with my subscribers and I send them an affiliate link recommending a product, they are more likely to take it seriously and my conversions will be higher than an affiliate that spams their list with a bunch of low quality stuff.

So the responsibility is not only on the product creator, but also on the affiliate, so I do think they both should have some level of risk in the system.

Also, I think it's our responsibility as affiliates to recommend high quality products. If we recommend crappy products, then that's also on us.

Well, we can also sell any products and services if we don't want vendor to take money from our sales.

So an affiliate can misrepresent a product and claim it is something it isn't, then shouldn't have to lose money when the customer finds out it's BS and refunds?

if the refund does not include the affiliate's commission, then the affiliate marketing will lose control very quickly and becomes dead. simply because most sellers won't be able to afford it anymore.


david

It's a 2 way street, and trust is involved.

The affiliate can lower refund rates by honestly representing the product and only promoting this he knows and believes in.

The merchant 's got to have a good product and support.

If no one gets stupid or greedy then it's all ok.

Everybody is taking equal responsibility.

If a product costs $20 and you get a $10 dollar commission:

On a refund, you (the affiliate) returns $10 and the program (sponsor) returns $10. It's equal. The affiliate is not getting screwed, losing an unfair amount of money or taking any additional responsibility.

Slapping up a banner or a link and collecting a percentage of sales... affiliates have it easy

I think you have a point, as if you promote a product and work really hard to find out the product sold is rubbish then you have essential worked for nothing. On the other hand when you buy a rubbish product you want the comfort of knowing you can get a refund.

Yeah, with that example, you get half and the product sponsor gets half. If there is a refund, you give your half back and they give their half back.

It's overly simplified since the product creator/sponsor is paying for billing services etc... who always get paid and that is coming out of the creator/sponsors pocket.

In a nutshell, affiliate marketing is that easy.

Not saying it's going to make you a millionaire and yes, there certainly is more involved if you want to make consistent sales or make a living from affiliate sales but what it all comes down to is affiliate has a website with a link to sponsor -> customers follows link -> makes purchase -> affiliate gets commission.

Affiliate sales is easy. Build a website, throw up your links, get a gazillion backlinks, you will make money. Guaranteed. You don't need to buy an ebook or find a mentor to explain how to make money as an affiliate. Success varies but it doesn't get any easier than that.

The point is the affiliate should have tried out the product before promoting it. Alexa said it earlier, but to guarantee the message gets across I'll have another go.

If you are going to sell something you need to know exactly what it is. Lets replace the word "ebook" with the word "Lamborghini".

Now if you are going to sell a Lamborghini then you damn well better know what it feels like to drive one, what it makes you feel like as you drive past your friends, the emotions it inspires... If you don't then you will have a hard job selling one, and if someone asks about the sticky door you will know what to say. Actually you will know the concerns they have, and have headed them off before they start.

Sales is not a game it's a dirty knife fight, and if you haven't tried the product you don't know if you have a knife in your pocket or a banana!

In short: don't promote anything you haven't tried, and if you do then don't complain about the refunds, as you will not have known which target market to promote it to.

As to who takes the refund hit when a customer refunds, it isn't a hit at all. It is an undoing of the sale. It's best to think of it as a sale that didn't close.

My 2c,
Colin Palfrey

Where's the confusion? If someone purchases a product, you as an affiliate receive a percentage of the money that customer has paid - as does the vendor. If the customer then wants a refund, you as an affiliate have some of that customers money, as does the vendor - so you both need to return it to the customer.

I don't think this is unfair. In most cases, adding a money back guarantee will increase conversions of the product. Concentrate not on how much money you have had to give back because of the refund policy, but instead focus on how much extra money you have made because of the refund policy.

That aside, there are always going to be some products that suck and don't live up to the sales hype. But it's up to you as an affiliate to weed those products out. If this game were easy then everyone would be doing it.

I guess I missed it...when did they make a rule saying the seller gets to keep his half on refunds?

I already mentioned that that statement was wrong.

Guess you did miss it.

http://www.warriorforum.com/main-int...ml#post2959080

In my opinion, there is no such thing as a "totem pole". It's more of a roundtable to me. Everyone involved in the sale process is vital. If you remove one, the structure inevitably fails of suffers considerably. So in turn, this would mean a refund would have to affect everyone in the process. If you agree with this look at the sales structure, then you would have to agree that a refund will require everyone involved in the process to lose what they made. Penalizing one person in the process over the other would undermine the flow of business and create bad tension.

The Affiliate deserves the commmission REGARDLESS! SO, 50% commission....

NO refund on a $15 dollar product...

$15-0*.5=$7.5

WITH a refund....

$15-$15*.5=$0!

FAIR!

See, it ALL works out! A commission is a fee based on a SALE! If there is a refund, it basically nullifies the sale. The seller has the SAME problem.

HEY, ANYONE can sell something for $20. The TRICK is to do it HONESTLY so the honest customers let you keep the money.

Steve