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  1. #1
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    I'm seeing more and more reversals these days. I guess it's a sign of the times ... merchants are looking for more ways to cut their costs.

    Most reversals are valid but that doesn't always make them right. Affiliates often decide who to promote based on current earning rates. Reversals that are batched up and debited to the affiliate's account weeks or months after the orignal order are a major concern. While probably not intentional, they deceive the affiliate into believing current earnings are higher than they actually are, giving false incentive for the affiliate to promote that merchant more agressively than real earnings would dictate.

    The longer a merchant waits to reverse a sale, the more deceptive it becomes. Here's my suggestion to merchants:

    (1) Build the product returns rate into your original commission rate, then don't reverse returns. Be fair about it to your affiliates and to yourselves by calculating a returns rate net of returned and replaced orders. After all your key affiliates will probably promote merchants based on earnings ... plain and simple.

    (2) Verify credit cards immediately, before the order is registered.

    (3) Check orders for fraud immediately and reverse those orders as soon as they're discovered, and before they ship. If the merchant is foolish enough to ship a fraudulant order, the affiliate deserves to keep the commission in my opinion. A fraudulant order should be reversed within a week or ten days of being placed, or not at all.

    (4) Merchants should do everything in their power to communicate to publishers what reversal rates they should expect, and why. It would also be a good idea be proactive and notify publishers in advance of impending unusual reversals.

    (5) An email to affiliates about big reversals, or even a phone call, will go a long way to maintaining trust.

  2. #2
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    YESSSSS… good post!

    IRS

    Don’t ask why the ball doesn’t come.

  3. #3
    Resident Genius and Staunch Capitalist Leader's Avatar
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    quote:
    Build the product returns rate into your original commission rate, then don't reverse returns


    Most of your suggestions sound good, but the above one would give a ready-made excuse to too many merchants to lower commissions. I can see merchants who've never reversed a lot before suddenly be trying to justify large commission cuts as "coverage for returns"! There's enough commission-deflation already without giving them reasons...

    Plus, items 2 through 4 would serve as quite a deterrant as it is.

    As for item 5, that may help build trust if it happened occasionally. But if it got to be that the affiliate could expect The Call every time a big transaction showed up, the effect could be quite different...

    -I've been a king, and I've been a pauper, and everything there is in between ~fairly old country song

  4. #4
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    quote:
    As for item 5, that may help build trust if it happened occasionally. But if it got to be that the affiliate could expect The Call every time a big transaction showed up, the effect could be quite different...


    I think it would make sense for those reversed transactions that really involve very large $. I had a big commission reversed by a merchant and they sent an email explaining why. Certainly made me feel better. If nothing else (after all, they may be lying!), it shows they're paying attention and thinking about the impacts.

    Yesterday, I got a $2500 sale with a $175 commission. Keeping my fingers crossed. The day before I'd swapped emails with the affiliate manager suggesting I might leave the program -coincidence? Whatever, I hope he sees my name and keeps his finger off the reverse button on that one.

  5. #5
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    Hi everyone!

    Even solid merchants that don't reverse before are now reversing.

    With the reversal rate info gone, they don't have to worry about reversal rates.

    [This message was edited by waytogo on April 11, 2003 at 06:20 AM.]

  6. #6
    ABW Adviser Panel Dynamoo's Avatar
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    Hi waytogo (and welcome)

    I've really miffed with Artinaclick for reversing my only two sales with them so far (about $30 commission) from over a MONTH ago with the excuse "out of stock/can't ship".

    But my real bugbear is GoCollect, I get about 25% reversals with them.

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  7. #7
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    I may be a little slow on the uptake but WHAT?? You're telling me they have removed revesal rates? That's ridiculous.

  8. #8
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    quote:

    I've really miffed with Artinaclick for reversing my only two sales with them so far (about $30 commission) from over a MONTH ago with the excuse "out of stock/can't ship".

    But my real bugbear is GoCollect, I get about 25% reversals with them.


    Hi Dynamoo and Snoop

    Atleast back then, we can compare how we're doing and how the network is doing, and then decide whether to continue promoting the merchant or not.

    But now, with the reversal rate info unavailable, we cannot determine if your 100% and 25% reversal rates are the norm or not for the merchants.

    And worst, I now see good merchants (zero to very few reversals) converting into bad merchants. I think they realized that they can now reversed transactions and get away with it.

    CJ took away the only tool we have that evens the playing field.

  9. #9
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    quote:
    Check orders for fraud immediately and reverse those orders as soon as they're discovered, and before they ship. If the merchant is foolish enough to ship a fraudulant order, the affiliate deserves to keep the commission in my opinion. A fraudulant order should be reversed within a week or ten days of being placed, or not at all.



    The problem is, normally when a card is stolen, or being used fraudulently, they go on a streak of using it. If you are first on the streak - it looks like a valid card to you, it hasn't been reported. You will sometimes not get notified that it was invalid for 30 days.

    While common sense says, with fraud so high, only ship to the billing address, some still don't and they get burned.

    From a merchants perspective, fraud will will eat you up like no piece of scumware ever could. Because all visa/mc/amex's lovely - don't worry 100% fraud protection, the user never pays! Means, the merchant pays, and sometimes a triple wammy of the charge being charged back, the loss of the product, and then an insulting $15-25 charge back fee on top of that for the credit processors own system not catching the fraud.

    So I do not think it is fair to think the merchant should take a fourth hit on the fraudulent sale. When that "terrible" *cough* chargeback info was available, I would often find merchants with a high chargeback did things like ship to addresses other than the billing address etc - while those with low were much more strict.

    But the tradeoff is - a stricter billing system also tends to block some legit customers from placing an order.

    So my point is - a. fraud is real, but obviously some people have more of a problem than others. b. if it is products that are high on the list of thieves, check the site, check their order process. c. I think it is fair for a merchant to reverse an actual fraudulent order. d. of course i still think some merchants are scamming.

    Chet

  10. #10
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    No one can explain some reversals. Even the merchants (because they do not reply) and CJ. I had a GoZing sale reversed with reason "unqualified lead". I sent them an email asking how can that be a valid reason for sale. I do not get paid for leads. I am paid for sales. Sale can be reversed with several different reasons (invalid CC, returns etc.). But how the heck a sale can be reversed with reason "unqualified lead"? CJ support said this is incorrect. But I am not sure whether they can change merchant's decision. GoZing never replied.

  11. #11
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    There's plenty of things a merchant can do to minimize fraud, like calling to verify large orders or orders where the shipping and credit card addresses don't agree, or orders coming in from Fraud City (I won't mention them here but they know where Fraud Cities are), or orders coming in from Nigeria asking for overnight DHL delivery.

    If a merchant doesn't check for fraud and considers it a cost of doing business, they shouldn't be reversing the affiliate's commission two months later when they find out they've been frauded.

    Merchants might think because CJ, BeFree, Linkshare allow all kinds of reversals and probably won't challenge them, they're ok. Well, I'm sure a lot of affiliates don't think they're ok if handled poorly, and it's the affiliate's choice whether or not to keep promoting the merchant.

  12. #12
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    I've just posted Eastwood's reversal policy in our forum. It's unfortunate that some merchants aren't able to communicate their reasons for reversing with the choices we're given through CJ, but CJ could never really load all the different reasons that sales are reversed.

    At any rate, now that the "real" email address of the merchant is displayed, hopefully it'll be easier to communicate with merchants about reversals.

    -patrice

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  13. #13
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    I'm sure I'm not the only one here who has seen advertisters with reversal rates above 50% before, I think I recall one who's was around 90%.

    What if someone takes on a major project using one of these advertisers without knowing this information firsthand? What if they get it going, most of their transactions are thrown away and there are no similar merchants to promote as a replacement? What a waste of time and money that would be.

    As far as I'm concerned there is no information that can't help the publisher. Taking anything away is tantamount to robbery.

  14. #14
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    Maybe CJ 7.0 will add a spot for merchants to post a note (comments) about why a sale was reversed with the reversal.

    It is a bit of a headache to have to navigate the CJ interface to find an affiliates e-mail address and write a note (and hope they get it). Keeping a short note with the reversal would make it very simple to see the reason for the reversal.

    CJ's categories are just to non-descript to really tell the affiliate why the sale was no good.

    Of course, since we are good at preventing fraud before it happens and we validate credit cards up front, we have very few reversals. It's not much extra work for me to write an e-mail...

    Scott Marino
    WebUndies.com

  15. #15
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    >I may be a little slow on the uptake but WHAT?? >You're telling me they have removed revesal rates?

    A LITTLE slow??? :^)

    Jimmy James fan club membership # 3312

  16. #16
    Outsourced Program Manager Paul Schroader's Avatar
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    Maybe Whiznot should be an Affiliate Manager.

    When we built Oreck.com's affiliate program we knew how important avoiding reversals is to affiliates.

    By factoring in historical reversals, we've been able to build a program that hasn't reversed a single affiliate transaction.

    Combine that with a 3-month EPC of $44.16 and I think we're on to something good. I don't want to sound arrogant, but this approach seems to have helped us build a real winner.

    I personally feel that other programs could benefit from applying these suggestions in some form or other.

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    Paul Schroader
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  17. #17
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    quote:
    Originally posted by Whiznot3) Check orders for fraud immediately and reverse those orders as soon as they're discovered, and before they ship. If the merchant is foolish enough to ship a fraudulant order, the affiliate deserves to keep the commission in my opinion. A fraudulant order should be reversed within a week or ten days of being placed, or not at all.


    This is closest to a good recommendation. I think the real issue, as Whiznot said, is the inability to optimize campaigns based on accurate revenue estimations. While I don't think that merchants should have to pay commissions for fraudulent orders they send out, it's more than fair to require that their reversals be applied within a reasonable time limit. Otherwise, you give them an opportunity to capitalize on several months of heavy promotion by good affiliates before those affiliates find out how poor the program is really performing.

    Our network has told sponsors that their reversals must be supplied in a timely manner, if at all. Some merchants, depending on the programs, are not afforded reversals. Also, we list each reversal and the reason for it in the account statistics for each affiliate. This way, if a program is performing poorly, the affiliate will know as soon as possible and can make more effective decisions. Also, in the end, merchants with unreasonable return rates should either be removed or have their reversal priveledges revoked. There's no advantage for a network to humor a poor campaign at the expense of high-performing affiliates. In the end, those reversals take money from the network, too.

    Joe Flores
    "Profitman"
    Affiliate Manager
    www.affiliatefuel.com

  18. #18
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    Thumbs up to Patrice and Eastwood for posting their affiliate reversal policy.

  19. #19
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Kudos to the merchant AM'ss who came forward to state their reversal policies and some of the pitfalls they face. All the Catalog companies inform their order desk operators "do not ship to any address not the billing address".

    I'd like to hear how TigerDirect handles this to keep reversals below 1% on millions of dollars sold each month?

    I operate the www.suspenders.com site and since 1997 only 6 reversals have been done on thousands of orders. All sales over 200.00 are verified by e-mail or phone call to the card holder before shipping and the Merchant only got burned 2 times when taking phone orders with 2nd day air shipping requested and a gifting address given.

    Charlie ...

    If they won't adopt and feed a bird ..flip them one! BBQ some Gator and remember to flush WhenU..

  20. #20
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    Combating fraud is hard. We work hard to ban ip's from high fraud countries/regions and do many other things to fight it. It has taken a lot of time and hard work, but we have reduced fraud attempts to almost nothing.

    Our chargeback percentage was 3-4% pre CJ 6.0, which really represented about 1% of the orders. Since crooks love shopping sites because one site provides links to many merchants, the few fraud orders that snuck in generally came through affiliate links. Not the affiliates fault, just that a crook happened to like their site...

    Some merchants are just not pro-active in fighting fraud and take the approach of cancelling the order after it is placed. More work for them and suspicious affiliates are all they get. Since many are not technical, and don't know how else to fight it, thay are doing the best they can.

    Scott Marino
    WebUndies.com

  21. #21
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    Honest merchants have no reason to be wary of the reversal rates. As we can see here, their reversal rates are small anyway and very acceptable.

    In fact, they can expect to be promoted more.


    I am however concerned about merchants who have 60% to 80% reversals pre-6.0. I tried to give them the benefit of the doubt before, and it didn't take them long to do the reversals.

    Without the reversal rate info, I would have given them the doubt for all eternity.

  22. #22
    ABW Ambassador Andy's Avatar
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    Yes, CJ should be commended for opening the doors wide, rolling out the red carpet, and welcoming reversals by thieving merchants. Scummy bottom feeder merchants will flock to CJ now that reversal statistics are history.

    And with the individual product link data also now concealed, these merchants don't have to maintain inventory, keep the same landing pages, or be held to any level of accountability for their products, since there's no way to check.

    I hope the honest merchants at CJ throw a fit about this, because they will be losing business to the thieving merchants while publishers are running their ads instead of the ads of the honest merchants. We now have no way of knowing how a program performs. EPC is not a reliable indicator of how a merchant performs, although CJ wants us to believe it is.

    Right...and I've got a great deal for you on Enron stock, too. Buy now before the price goes up!

    This has turned out to be a very cozy deal for thieves, but what would you expect from a company that embraces affiliates that take others commissions, and showcase them on their front page???

    Andy

    MERCHANTS! Ask yourselves: "What's in my affiliate program that makes it worthwhile to publishers?" Hint: if you have one day cookies, or if the cookie is deleted after the first sale, or if you reverse legitimate transactions, you have nothing to offer.

  23. #23
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    quote:
    Originally posted by Andy:
    Yes, CJ should be commended for opening the doors wide, rolling out the red carpet, and welcoming reversals by thieving merchants.
    There's this one merchant that's a solid producer with 0% reversal rate and almost never reverses. Right after CJ6.0, reversals began to trickle in.

    Of course I'm inclined to give the merchant the benefit of the doubt, that the very few reversals they make somehow happened to fall on my side.

    It's scary however to think that without the availability of the reversal rates, this can become a free-for-all for other merchants who are dishonest.

  24. #24
    Affiliate Marketing Consultant Andy Rodriguez's Avatar
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    quote:
    Originally posted by EcomCity.com:
    I'd like to hear how TigerDirect handles this to keep reversals below 1% on millions of dollars sold each month?



    Mike, i can't reveal all my secrets here on a public forum.

    You are correct though, on over $1.25 MM in monthly affiliate channel sales, ours is less than 1%.

    How do we do it? Well that's one of our secrets to staying competitive in this low margin computer industry....

    Andy Rodriguez,
    Online Advertising / Affiliate Marketing Manager

    TigerDirect.com
    P: (305) 415-2313
    E: andy.rodriguez@tigerdirect.com
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    AIM: miamitigercub

  25. #25
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    "Mike, i can't reveal all my secrets here on a public forum."

    Without access to your YTD stats I can only guess. Of course my site is well known for having classy/savvy shoppers and not a flytrap for stolen credit card players. Thats why I know some of the merchant's batting 60-80+% reversal ratios on my traffic are stinking up my stats.

    Charlie ...

    If they won't adopt and feed a bird ..flip them one! BBQ some Gator and remember to flush WhenU..

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