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  1. #1
    ABW Ambassador isellstuff's Avatar
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    High Dollar Reversals - Depressing, Frustrating
    So, if I have a high dollar sale (e.g. above $10K in sales from one customer) and this sale isn't through a fortune 500 retailer, its just about guaranteed that it will be reversed. As the economy has improved, so has the number of big ticket purchases that are funneled through my website. Not that it means anything, because I most likely won't see a penny.

    So, affiliate managers, what the heck is going on? Why do I never get compensated for these purchases? I should point out that the worst merchant programs for high dollar reversals are the same merchants that I do extremely well with at the low end. They have high commission rates, competitive pricing and typically in house affiliate managers.

    Do smaller merchants cancel the big ticket orders due to the unwanted risk? Do they maintain their competitive pricing and commissions by shaving the top end? Do credit card companies routinely cancel the sale due to the charge size?

    Credit card denials, that brings up a good point. I had a HUGE sale a month or so ago. My biggest ever. It was so large that I doubted anything less than a MasterCard Black card could take the charge. And of course, the charge was declined. I really suspect that it was a valid order and it probably was finalized over the phone at some point, but I was cut out of the commission due to the credit card issue.

    I hate making money in little nibbles....

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  3. #2
    OPM and Moderator Chuck Hamrick's Avatar
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    Question begs a call to the merchant. Have had several sales come through this year for over $5k, one last month for $7,290.00 which paid the affiliate 12%.

    If merchants are not going to pay commissions on any products, level of sale, etc. then they need to define that in their program terms. I guess you are in a Catch22 in that you lose the volume commissions if you confront the merchant. A friendly call may expose information that will change the way you promote that merchant.

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  5. #3
    Affiliate Network Rep JCrooks - AffiliateWindow's Avatar
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    We never cancel a transaction because of the size or affiliate involvement. If they know you are the affiliate, they should also know that you don't do anything to violate their rules, which would be the only reason I could imagine. I agree with Chuck - talk to the merchant directly and see what gives. They don't deserve your traffic if that's how they treat you!
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  6. #4
    ABW Ambassador isellstuff's Avatar
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    I don't know guys, I've been doing this for 10 years now and the level of corruption, theft and greed I've seen has made me fairly apathetic to the whole issue. I've been thinking about doing this post for years and never bothered. I'm seeing this issue across a large range of merchants. The only commonality is that they are NOT fortune 500's.

    I would like to know, what's so hard about getting credit for a $10K credit card purchase? Are most $10K+ purchases fraudulent?

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  8. #5
    OPM and Moderator Chuck Hamrick's Avatar
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    As an OPM I am paid on a rev share and watching orders like a hawk. If the affiliate does not get paid I don't get paid. Was just talking to a business partner about a change in the accounting department of a joint merchant. Previous person there would check back and credit to the affiliate channel orders that did not charge but came back later. Some were based on the volume not clearing the credit card but once they sent in a payment they ran it again.

  9. #6
    ABW Ambassador isellstuff's Avatar
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    Here's one paranoid scenario I've considered. Say you get a commission in the $x,xxx range and it is valid. Could a corrupt affiliate manager funnel that commission into one of their own affiliate accounts (or an account of an accomplice) by changing the attribution?

    Another, more obvious scenario is that the business owner cancels high end commissions for whatever reason. (cash flow? greed?)

  10. #7
    OPM and Moderator Chuck Hamrick's Avatar
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    Not sure an AM can change the attribution in the network. They can void the sale and contribute it to their affiliate ID.

    Another, more obvious scenario is that the business owner cancels high end commissions for whatever reason. (cash flow? greed?)
    Am sure it happens and hence the Fortune 500 comment. Best way to figure out is question the sale on a call. Harder to lie on a phone call than via email.

  11. #8
    OPM/Moderator Hectic GHC's Avatar
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    Sucks to hear that. I void when I'm told to void because orders were cancelled for various reasons. I do get worried when I see high dollar orders come in because they might be fraud. Sometimes they are but most of the time they are not.

    Reversal rates should be pretty low at all times. Talk to the manager. Get a valid reason.
    Greg Hoffman
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  13. #9
    Affiliate Manager Kush@VMInnovations's Avatar
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    Second the comments about calling, it would be worth it for you, and hopefully the merchant.

    I would assume smaller merchants don't have sophisticated anti-fraud solutions to prevent fraudulent orders or verify legit ones (ex Accertify). In those cases someone is in charge of manually approving or declining large orders based on limited info, pretty subjective practice so he/she may just decline the order if customer doesn't respond to follow up emails requesting more info to verify ID. Reason for that is if the person declines a legit order, nothing happens, if they approve a fraudulent one, they will hear about it from the management.

    "Could a corrupt affiliate manager funnel that commission into one of their own affiliate accounts (or an account of an accomplice) by changing the attribution?" If you suspect it, would be worth asking network representatives to investigate.

  14. #10
    The slot machine that IS paid! Billy Kay's Avatar
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    Been there done that ISellStuff. We're in a frustrating business. While it's touted as being transparent, the stuff we really need to see, is the stuff that's (rightfully) off limits to us

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  16. #11
    ABW Ambassador isellstuff's Avatar
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    I think one of the problems is that these large sales are still fairly rare. I guess I would need to look at my commission reversals over the last 3-5 years on a per merchant basis. Even then, you know, a 75% reversal rate on 5 transactions over $10K in a 5 year timespan isn't really much of a statistical pattern. I only truly start to see the issue when I look at all of my merchant relationships, in aggregate.

    Apathy seems to be an affiliate managers friend. Its like this recent trend where an affiliate program will reduce their commissions across the board, but then give you a bump back to the original commission level if you send an e-mail in to ask about the rate change. What Richard Cranium came up with that scheme I wonder and who in the hell is teaching it to other program managers? That reminds me... I guess I will go update the downward spiral thread with that tip...
    Last edited by isellstuff; March 12th, 2014 at 08:17 PM.

  17. #12
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    Our AOV is $63 - most orders are between $32 and $125 - with about 3% of our transactions in the $200-250 range. In the history of our business (since 2006) we rarely see a single legitimate retail website customer order more than $500. SO when the $500 order comes in, it gets scrutiny. AVS better match. IP must be within the metro area of the bill-to. The products ordered must be logical (we sell cosmetics -- when the fraud order contains products that are totally unrelated, that's a red flag), etc... and when in doubt, we call the issuing bank and they contact the customer. And it's usually fraud when the indications lead us to believe it's not real.

    And these fraudulent transactions are reversed. And they are ALWAYS affiliate transactions from the small affil that only had a few small transactions. Then this one. MFer.

    SO it cuts both ways.

    If the average pattern of transaction size is $x, and then an order for $10x comes in, the merchant must do due diligence.

    If it isn't real, it must be reversed/voided. Surely there is no argument for that?

  18. #13
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    I've had several very large orders get reversed claiming they were a wholesale customer. The merchant this happens with sends me documentation upon request. Their program terms state wholesale customers are not eligible for commissions. It's not ideal, but they are a good merchant to me otherwise.

  19. #14
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    It is very frustrating to see high dollar reversals, isellstuff. In the past ten years, I have been thru this situation many many times. Now, whenever I see a sale in 4 digits or more, I don't even get excited anymore. I almost guarantee you that they will get revised(other than maybe 0.01% from a couple of very well know big 500 merchants). The most common reversal reasons I get are "credit cart fraud" or "return". There is no way we can get the prove. I do check with merchants/AMs about the reversals if I don't feel right, but they will never provide the detail data other than explanation like "customer made the purchase on such day and return on such day".

    We are in a business which is mostly based on trust and we have to count on the merchants to be honest. I hope someday this will change when all sales detail data are open to affiliates. Until then, I don't see the point to promote any high dollar products knowing that I will never get commission out of the sales. That's just the reality.

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  21. #15
    ABW Ambassador isellstuff's Avatar
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    I've had several very large orders get reversed claiming they were a wholesale customer.
    yeah, I see this a lot too.

    Now, whenever I see a sale in 4 digits or more, I don't even get excited anymore.
    I actually get mad when I see a 4 digit sale, because it will mess up my daily profit charts. I will see a big spike on my graphs, followed by a real bummer of a day with a deep valley. My mood swings with my P&L spreadsheet graph. I saw a big sale yesterday, got mad, and hence this thread. Well, that and $400 in reversals from another merchant.

  22. #16
    ...and a Pirate's heart. Convergence's Avatar
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    Noticed for us that it DOES depend on the merchant AND products. Think in two years we had one high dollar reversal (half the order) for some appliances.

    Most of our high dollar orders come from fashion merchants. Have two on our "watch" list. One on our "love/hate" list and one on our "sheesh don't you people know what size you wear?" list. The last two bring in a great deal of revenue, but their reversal rates are VERY, VERY HIGH. The first two are also well-known merchants (online) but we're very suspicious, hence the "watch" list...
    Salty kisses, Sandy toes, and a Pirate's heart...

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  24. #17
    ABW Ambassador isellstuff's Avatar
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    Quote Originally Posted by carpeperdiem View Post
    Our AOV is $63 - most orders are between $32 and $125 - with about 3% of our transactions in the $200-250 range. In the history of our business (since 2006) we rarely see a single legitimate retail website customer order more than $500.
    The merchants I'm talking about sell high dollar items. Most of my orders are multi-item orders, but you can tell by what they are ordering that they all "fit" together. In other words, I know exactly what the buyer is trying to do, they are buying the appropriate accessories, etc.
    Last edited by isellstuff; March 13th, 2014 at 11:52 AM.

  25. #18
    Outsourced Program Manager John Jupp's Avatar
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    Quote Originally Posted by Chuck Hamrick View Post
    Not sure an AM can change the attribution in the network. They can void the sale and contribute it to their affiliate ID.
    If they did that they wouldn't get paid. Most retailers receive itemised billing from networks showing what each affiliate is receiving. If someone started crediting an account (through a manual payment) it'd get flagged very, very quickly.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  26. #19
    ABW Ambassador isellstuff's Avatar
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    Quote Originally Posted by John Jupp View Post
    If they did that they wouldn't get paid. Most retailers receive itemised billing from networks showing what each affiliate is receiving. If someone started crediting an account (through a manual payment) it'd get flagged very, very quickly.
    From what I understand, this type of "scam" is run through a 100 or more accounts. I would hope an audit would detect it, but am unsure. Merchants definitely need to watch the number of manual changes. I hope merchants do routinely audit their affiliate program via a 3rd party? If not, they should, IMHO. I think a 3rd party audit should monitor the quality of websites who are getting commissions. I would look at sites that have very little traffic and seem to reliably get sales. I would then take a serious look at "why". Surely there is a good audit service for affiliate programs? If not, there should be. Business opportunity for the right, tech savvy people?

    I would think programs on multiple networks would be most vulnerable?
    Last edited by isellstuff; March 14th, 2014 at 01:04 PM.

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  28. #20
    Outsourced Program Manager John Jupp's Avatar
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    I can't speak for others but I get audited on a regular basis because the amounts of commission each month are large. The clients have their own accounting team accessing weekly and all manual payments have to be signed off before being made and are noted by management and the accounts team. If there was ever a discrepancy it'd get picked up straight away. Attributing a commission or anything like that requires a manual payment to be processed and that's an instant flag.

    One of my clients was named last week as one of a networks biggest revenue exchange clients and with that sort of profile, there's no way until hell freezes over that anything untoward could ever be conducted.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  29. #21
    ABW Ambassador isellstuff's Avatar
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    Just thinking out loud.... If I were an affiliate manager, I could choose not not enforce certain rules for a specific set of accounts. In particular, trademark bidding via PPC or toolbars/bhos. An audit that looks for cookies being overwritten might turn up some interesting trends.

    Looking at it like this. Expensive stuff has a longer buying cycle where I bring in the customer but they are hijacked at the last minute for whatever reason. The only reason I am aware of the problem is because of multi-network issues where my cookie was overwritten by an affiliate account on another network.

    How does multi-network attribution work? Does a batch program correct the results after the sale has been made?

  30. #22
    Outsourced Program Manager John Jupp's Avatar
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    Again, with larger firms it just doesn't happen. Everything is segmented with inter-departmental oversight. As for the options you suggest, any individual permissions to individual affiliate accounts have to be signed off following inter-departmental discussion.

    Heck for one program it took me two years to get a relaxation on specific marketing segments, for some others I'm still battling to get relaxations. Everything has to be planned a year ahead to be passed by a company's Board. For smaller firms without a lot of oversight then sure, there could be opportunity to mess with the programs, but not with large firms.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  31. #23
    Outsourced Program Manager John Jupp's Avatar
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    Quote Originally Posted by isellstuff View Post
    How does multi-network attribution work? Does a batch program correct the results after the sale has been made?
    Yes you have it right there. The only time I ever and I mean ever get issues is from cash back sites where a customer wants cash back after a cookie period (I usually approve if a proven sale outside the period to encourage viral goodwill) but the worst is when a customer claims cash back and their sale was attributed to another affiliate. Those, the cash backs get declined because the customer is not being straight.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  32. #24
    ABW Ambassador isellstuff's Avatar
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    One other audit thought.... If you outsource the development of the script that does multi-network attribution, you need to have that script audited. It would be a low end computer programmers ticket out of poverty to be able to transfer commissions into a hard coded set of affiliate accounts based on a random number generator.

    Heck, I would also have someone scrutinize your checkout pages as well. This type of "switcheroo" could happen when the pixel was fired, when the batch transactions were uploaded, etc.

    These are financial transactions and need to have the same scrutiny as a banking operation.

  33. #25
    Outsourced Program Manager John Jupp's Avatar
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    Mate you've been at the Jim Beam again.

    All possible scenarios but very unlikely. Again it's down to monitoring. If commissions suddenly appeared for an unknown affiliate then that affiliate does get looked at in order to quantify how they generated sales. Individual programmers aren't able to do as you'd suggest because they too are audited. Again I am quantifying for large firms. As for checkouts, there's enough analytical software generally to sink a battleship, especially if you use something like StuffedTracker or comparable software.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

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