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  1. #1
    Outsourced Program Manager paladin's Avatar
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    Locked Sales & Chargebacks
    We just received a chargeback from a sale dating a few months ago so that sale was already locked. In this specific case we contacted SAS, but as the sale was locked there was nothing they could do.


    While it was not a huge amount of money I did want to hear your opinions on it. As important as it is to be fair to affiliates shouldn't SAS also be fair to merchants? Why should a merchant have to pay comissions on sales like these?

    I was curious to your opinions (both as affiiates and merchants) on how this should be handled.

    -Alon

  2. #2
    The Seal of Aproval rematt's Avatar
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    It may not seem fair to you, but as an affiliate I have to say it actually is. As the merchant you control every aspect of the sale once the customer hits your site. If a fraudulent credit card was used, checking it for validity was your job. If the product was returned, you obviously had to approve a return that was made on a sale made "a few months ago". If the customer disputed the charge with their credit card company, there was a reason for it that the affiliate again had no control over.

    There are probably several otter scenarios that could be applicable and it's quite possible that I didn't hit the on the right one, however you are still in control of the transaction. We did our job by delivering a valid prospect to you for one or more of your products or services. Your job was to convert the prospect and turn them in to a customer. It sounds like the affiliate did their job in this case. Was there something that you perceive that they did to cause a reversal of this sale?

    If merchants are allowed to reverse sales at any point in time, there are merchants that will take advantage of that situation for their own gain. It's a fair and reasonable rule. We have to eat too.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  3. #3
    Affiliate Manager adambha's Avatar
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    As a merchant, I totally agree with rematt.

    There is plenty of time to do a reversal/transaction edit after the sale occurs. In most situations, a merchant should be able to determine the need for this within a couple of days, usually within 24 hours.

    In my mind, once the product ships it's a valid commission. If there's a return, it's still a valid commission since the affiliate did their job and the return reflects a failing on the part of the merchant.

  4. #4
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    Quote Originally Posted by paladin
    We just received a chargeback from a sale dating a few months ago so that sale was already locked.
    -Alon
    When you receive a chargeback, even the merchant bank processing credit cards hold the "merchant/retailer" responsible for the amount.

    I know it is not fun to be eating the losses on chargebacks (original sale amount + chargeback fees + marketing expenses such as your PPC costs or affiliate marketing expenses etc).

    You need to have good FRAUD DETECTION controls making sure that the credit card charges are valid. And also factor in 2 to 5% allowance of all sales for FRAUD charges, no matter how good your fraud detection mechanisms are .. that is just the cost of doing BUSINESS!

  5. #5
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    Quote Originally Posted by adambha
    If there's a return, it's still a valid commission since the affiliate did their job and the return reflects a failing on the part of the merchant.
    As an affiliate, I am fine if the merchant reverses commissions on returned products (within 30 to 45 days time). However, I prefer merchants who takes responsibility for RETURNED orders and does not reverse affiliate commissions.

    Imagine, doing Google Adwords on a CPA basis. Does Google accept reversals based on RETURNS, CHARGEBACKS etc.?.

  6. #6
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    What is the point of the locking system if sales are reversed after being locked? To me it seems like an abuse of the system.

    If the merchant doesn't think the default locking model is sufficient then by all means move to the pending model and allow 60 days for reversals.

    But 60 days seems like the generally agreed upon "reasonable" amount of time for a reversal to occur.

    Who the hell returns stuff after that amount of time? What kind of merchant accepts such a return? What product are we talking about here?

  7. #7
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    Its a tough sell. If its a "good" affiliate i would swallow the fee and move on. If its a so-so affiliate I would probably do it once and then drop them from the program if it happens again.

    Believe me folks - its a two way street. Poor affiliates will sometimes use chargebacks to collect commissions and sometimes even keep the goods at the same time.

    As a retailer i know the risk involved with all costs associated with a sale so i'm not out to hurt the ones who bring me my bread and butter but as a merchant you should build a trusted affiliate network so you know you're not being burned.

    This is coming from someone with an average purchase price of 3-500.00 where commissions can be large

  8. #8
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    Quote Originally Posted by strasburgtech
    Believe me folks - its a two way street. Poor affiliates will sometimes use chargebacks to collect commissions and sometimes even keep the goods at the same time.

    That is a FRUAD .. You not only terminate such ROGUE affiliates, you will announce them under UNETHICAL AFFILIATES here and take other penal action as needed


    The case discussed here is not the one you described above IMO

  9. #9
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    Quote Originally Posted by redtagdeals
    That is a FRUAD .. You not only terminate such ROGUE affiliates, you will announce them under UNETHICAL AFFILIATES here and take other penal action as needed


    The case discussed here is not the one you described above IMO
    It really depends on your niche. Selling in the electronics/computer side fraud comes from every angle and it would be naive to not be aware of what to track.

    Its usually fairly simple to track but many programs fail because they don't think or are unaware of the risks involved. The cheating affiliates will ruin it for everyone.

    That isn't to say it the case for this topic by any means, but if you want to know what merchants may/may not think - thats the truth!

    Bottom line - build good trustfull affiliate merchants and you won't even think about reversing commissions. If you have a willy nilly network - expect the said fraud as a fact of life because people will gravitate to taking advantage of something thats to good to be true.

  10. #10
    The Seal of Aproval rematt's Avatar
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    Quote Originally Posted by strasburgtech
    Its a tough sell. If its a "good" affiliate i would swallow the fee and move on. If its a so-so affiliate I would probably do it once and then drop them from the program if it happens again.

    Believe me folks - its a two way street. Poor affiliates will sometimes use chargebacks to collect commissions and sometimes even keep the goods at the same time.

    As a retailer i know the risk involved with all costs associated with a sale so i'm not out to hurt the ones who bring me my bread and butter but as a merchant you should build a trusted affiliate network so you know you're not being burned.

    This is coming from someone with an average purchase price of 3-500.00 where commissions can be large
    So where exactly do you see your responsibility in the sale? Are you saying that the affiliate is 100% responsible for not only delivering the customer, but also for closing the deal, verifying the customers payment information and reliably seeing to the delivery the product? If that's the case, why do we need you? Frankly if I'm doing your job, you had better be paying me a much larger percentage commission than the electronics industry is known for. Exactly how long do you think that an affiliate should be responsible for that sale?

    I'd be curious as to what your definition of a "good" affiliate is. Perhaps I've misunderstood you, but right now you're not quite fitting my definition of a "good" merchant to do business with. Thanks for the warning.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  11. #11
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    Quote Originally Posted by rematt
    So where exactly do you see your responsibility in the sale? Are you saying that the affiliate is 100% responsible for not only delivering the customer, but also for closing the deal, verifying the customers payment information and reliably seeing to the delivery the product? If that's the case, why do we need you? Frankly if I'm doing your job, you had better be paying me a much larger percentage commission than the electronics industry is known for. Exactly how long do you think that an affiliate should be responsible for that sale?
    I think you completely mis-understood my "2 cents". I merely defined an issue that is matter of fact when dealing with the affiliate markets. I mean you have affiliates that go so far as to install spyware and other crap - its up to the affiliate manager to build a good affiliate market so "chargebacks" never become an issue. Said affiliate should have everything in place to minimize the risk on his/her end.

    By that i mean if you have to jump on a forum to debate whether or not you should re-claim a chargeback obviously the trust is broken. I merely defined another instance where affiliate trust can be broken through personal experience.


    I'd be curious as to what your definition of a "good" affiliate is. Perhaps I've misunderstood you, but right now you're not quite fitting my definition of a "good" merchant to do business with. Thanks for the warning.

    -rematt
    One who simply plays by the rules as established through the marketplace and affiliate manager and respects the mutual relationship as such.

    There are rogue affiliates and rogue merchants - doesn't mean we should never speak of such possibilities when it comes to the reasons chargebacks MAY become a reason to withdrawl the commissions.

    After all, a commission paid on a fruad is one less commission for the good affiliates!

    I've been bit, just speaking from experience in my case as to why i asked for refunds on chargebacks. Customer chargebacks where *I* messed up i'm not that concerned about and accept full responsibility because YOU did your job.

  12. #12
    The Seal of Aproval rematt's Avatar
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    Quote Originally Posted by strasburgtech
    Customer chargebacks where *I* messed up i'm not that concerned about and accept full responsibility because YOU did your job.
    That's the response that I'm looking for from merchants that I work with. I understand the issues that merchants have with "rogue" affiliates, but I don't think that the original poster was referring to them, thus the confusion.

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  13. #13
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    yeah, it can be dog eat dog, i just hope merchants do their best to filter out their network so its based upon trust because it saves your skin on both sides of the coin

  14. #14
    Outsourced Program Manager paladin's Avatar
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    A bit of clarification....I am not talking about returns, rather a customer disputing the charge with their credit card company without ever contacting the merchant. All this several months after the original order. Some here say 60 days to lock seems reasonable, but merchants are open to those same chargebacks for 6 months or more depending on the credit card company.

    I am curious as to where affiliates see the line as acceptable transaction voids? As a merchant, if I cancel the sale in the same day due to fraud or suspected fraud is that OK in your eyes? After 3 days? A week? A month?

    Personally I'm of the opinion that if one side makes money (the affiliate or the merchant) then the other should as well. Either we both earn on a specific transaction or we don't. The expection being if the merchant does something stupid like not processing an order or shipping to the worng address.

  15. #15
    Moderator MichaelColey's Avatar
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    So why was this specific charge disputed? The credit card company gives you the reason and a chance to respond.
    Michael Coley
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  16. #16
    Outsourced Program Manager paladin's Avatar
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    The merchant is fighting it with the credit card company. From what I heard it sounds like a case of buyers remourse some 4 months after the fact.

    I do not think that there is any wrong doing on the part of the affiliate in this case.

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