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April 5th, 2004, 10:55 AM #1
- Join Date
- January 18th, 2005
This is not a new issue, but I spent a while thinking about it today after asking a merchant why they didn't pay commissions on gift certificates. His answer, as expected, was that they did not want to be scammed by affiliates who buy GC's and then buy merchandise for themselves, thereby getting double commissions. He also said they drop the restriction for high volume affiliates.
I'm posting my response to him here, without identifying his compny, just because I wanted to hear what you all think.
Hi [name removed];
Thanks for your response. I know other merchants do this, too, and I can understand how you would not want to be ripped off. I was just thinking about specifically promoting some stores as great places to buy gift certificates (for Father's Day, for instance), but in this case I'd just be shooting myself in the foot.
By the way, for anyone who is a legitimate, and small, affiliate of yours, wouldn't you think it is far more likely that they will bring in a customer who is going to buy a gift certificate, than it is for them to bring in a customer that already has a gift certificate. I think most people that have a gift certificate will go directly yo your site, don't you? So wouldn't it be better if you paid commissions on gift certificates, and then didn't pay on the redemptions of them, instead of the other way around.
Also, you say that you lift the restrictions for high-volume affiliates, but in the case of many of your super-affiliates, especially the incentive based ones, don't you think you are getting the same kind of double hit? For instance, let's say someone is buying from you through eBates.com. What if he buys a gift certificate for himself, and then uses it a month later. If he is a "smart" ebates user, he will shop through eBates again. In this case, you end up paying eBates as much as 22% and the customer gets a 10% discount. Or maybe he does this in conjunction with a relative or friend. Maybe he doesn't even intend it as a scam, it's just that his friends and relatives share his affection for eBates. It's just the nature of these incentive laden buying circles.
So it seems to me that you are ignoring the greater danger, while simply making it more difficult for the "little guys".
Anyway, I don't expect that I will get you to change your policy, but I hope you'll give what I'm saying some consideration.
April 5th, 2004, 12:34 PM #2
Merchants should pay commissions on gift certificates when they're originally purchased, and not pay when they're reedemed.
So, that solves his doubt about double commissions.
Because he'd love to find the solution with not paying any comission, at all.SomethingStore.com - Surprise and Delight!
April 5th, 2004, 04:01 PM #3
Yeah, but it would be to simple to add "Affiliates do not earn a commission when a gift certificate is used."
And lord knows it would be hard to break down sales with gift certificate involved.Scott
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