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  1. #1
    ABW Ambassador Ron Bechdolt's Avatar
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    Who gets paid when a merchant goes belly up at CJ?
    Todd,

    When a merchant leaves CJ, like ParaflexMed did this year, who gets paid out of the deposit money the merchant is required to put up front? I don't want to highjack that other thread you provided information in, so will post it here.

    I was really surprised that every one of my commissions for this year were reversed. It would seem to me if there had been deposit money for Jan., Feb. and Mar., I should have at least gotten a percentage of of that, even if it was just a few dollars. In my case I did not get a dime. Makes me wonder if other affiliates got paid and if so, how is it determined who gets paid and who does not? If the merchant was not paying their up front money all those months, then why did CJ allow them to continue?

    I realize this does not happen very often at CJ, but what if it was a merchant of mine that I get thousands in commissions a year? Next time it might be and I want to know how CJ is protecting me from something like that.
    Ron Bechdolt | Affiliate Program Management Consultant
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  2. #2
    Moderator MichaelColey's Avatar
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    The problem comes when CJ extends credit to merchants rather than requiring an escrow account.

    Surprisingly, I've lost more money from unpaid commissions on CJ in the last couple years than from all the other networks put together. That's pretty sad when affiliates consider their earnings on CJ as virtually guaranteed because of the "required" escrow.
    Michael Coley
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  3. #3
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    Are affiliates notified when CJ extends credit to an merchant?

  4. #4
    ABW Ambassador Ron Bechdolt's Avatar
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    Quote Originally Posted by pstation
    Are affiliates notified when CJ extends credit to an merchant?
    I was never notified. I had a couple support tickets sent in to CJ as well as a phone call and, although I never asked that, they never told me anything. Actually, from what CJ told me I thought ParaflexMed was going to come back online when CJ told me on March 1st:
    "ParaflexMed is currently in a deactivate state on our network. We are in the process of bringing them back online. As soon as they are on the network, you will be able to use the links."
    So, I waited.

    Then on March 8th I got this from CJ:
    "Just to update you on what I know...I recieved an email from someone at ParaflexMed today and they are working towards a solution (I won't go into all the details). Hopefully we can all be making money again through CJ soon."
    So I waited.

    Meanwhile commissions are still being reversed until in mid April they were all reversed back to Jan. 1.

    Hopefully Todd can get on here soon and tell me how this all works. I'm not trying to do any finger pointing here or be real critical, I just want to know how things work and mainly how I will be protected from this happening in the future.
    Ron Bechdolt | Affiliate Program Management Consultant
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  5. #5
    ABW Ambassador Akiva's Avatar
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    Ron,

    The deposit money that an advertiser puts up front is actually used towards commission payments during the beginning of the program. I would surmise that in ParaflexMed's case their escrow account went into a negative balance which got CJ's attention. CJ deactivates a merchant after numerous attempts to get them to deposit more cash to bring their balance to a min. $500 positive balance. I would guess that their balance was negative for several months and upon permanent deactivation CJ reversed all the transactions to bring thier balance to $0 thereby CJ avoids paying commissions to affiliates on money it never had. FYI when CJ deactivates an advertiser, the advertiser loses access to their account and cannot reverse txns until their account is re-activated.
    Akiva Bergstrom | akiva@affsolutions.com | 718-871-8286

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  6. #6
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    All fine and dandy but the merchant is "unjustly enriched" by the sales they got from the affiliates and all that CJ does is collect thier fees ... is that a trusted third party solution? NO.
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  7. #7
    ABW Ambassador Akiva's Avatar
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    Haiko,

    CJ doesn't either get their fees. When transactions are reversed CJ's portion is also reversed since the entire commission is credited back to the account. It's like this: In my advertiser account say I have a balance of $5,000. If I pay 6% commission.. a sale amount of $100.. CJ deducts a total of $7.80 on the advertiser end (6% affiliate commission + 30% of affiliate commission for CJ's fee which is 1.8% on a 6% commssion). When that txn is reversed, $7.80 is credited back to the advertiser account. So CJ makes their money when the deposit is made. When txns occur CJ simply lops off their share from the merchant's balance - but CJ already has the money IF the merchant has a positive balance. I agree that this is not a foolproof solution and ideally an accout should be deactivated automatically if the balance goes below $0.
    Akiva Bergstrom | akiva@affsolutions.com | 718-871-8286

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  8. #8
    ABW Ambassador Ron Bechdolt's Avatar
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    Akiva,

    Thanks for the explaination. It helps to understand the methodology, but I still want to hear from Todd about affiliate protection. There is a flaw in this system that should be addressed. This merchant obviously was allowed to go three months without paying. That is way too long and a method of protecting our earnings is required. The merchant still made the sales and ACTUALLY came out much better than us because they did not have to pay either the affiliate or CJ.
    Ron Bechdolt | Affiliate Program Management Consultant
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  9. #9
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    the 7.80 is credited back to bring the account balanceat CJ to zero yet, they [CJ] still have a superceeding contract with the merchant that equates to $500 a month so unless the merchant gave a three month or 6 month notice, I forget which it is, they are still owing CJ the $500 a month for that time period 3 or 6 months where do you think that's comming from? The friendly network fee tree?
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  10. #10
    ABW Ambassador Ron Bechdolt's Avatar
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    Not having a way to protect us from merchants that abscond with our earnings is just like allowing parasites. Perhaps the COC needs to be revised to include a clause for this too.

    It's all about protecting our earnings. Period. Does not matter who is trying to take them, the network should be the responsible party in make sure we get them. The network needs to require a certain large deposit to cover so many days out at any one time. It might not cover all lost earnings, but it should cover a very big portion.

    What I'd like to see is a system where CJ monitors and enforces this much closer. I never realized what kind of impact this could have on me if my largest merchant went belly up. I would not get a check from CJ for months with what I make on my other merchants and I'd be scratching my head wondering how to pay my creditors.

    Todd, do you think you all can do something with this to protect us?
    Ron Bechdolt | Affiliate Program Management Consultant
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  11. #11
    Member Chocolate_Chicken's Avatar
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    Inquiry to Paraflexmed about this matter was answered with "the affiliate program has not been shut down".

    Whether CJ got their cut or not, the dealer still got a free ride on the sales they did not pay commissions on for at least a month.

  12. #12
    ABW Ambassador Akiva's Avatar
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    Quote Originally Posted by Haiko de Poel, Jr.
    the 7.80 is credited back to bring the account balanceat CJ to zero yet, they [CJ] still have a superceeding contract with the merchant that equates to $500 a month so unless the merchant gave a three month or 6 month notice, I forget which it is, they are still owing CJ the $500 a month for that time period 3 or 6 months where do you think that's comming from? The friendly network fee tree?
    Haiko, the $500 fee is only if the merchant didn't have enough transactions that paid out a total of $500 in commissions to CJ. So even if a merchant has a negative balance, as long as transactions are coming in that equal $500 in CJ fees (despite their balance being negative), CJ won't hit them with a $500 charge.

    I'm completely unbiased when I say this (I work equally with all networks) but when affiliates lose their money, so does CJ. The bottom line is that when a merchant is out to steal, everyone gets hurt. I don't know exactly what happened in ParaflexMed's case or whether or not they had a disagreement with CJ over something, but CJ loses their money when transactions are reversed.
    Akiva Bergstrom | akiva@affsolutions.com | 718-871-8286

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  13. #13
    ABW Ambassador ticketguyz's Avatar
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    But affiliates wouldn't promote merchants if they knew that the merchants weren't current with CJ. Todd, why can't CJ notify affiliates immediately if a merchant falls behind?

  14. #14
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by Akiva
    Haiko, the $500 fee is only if the merchant didn't have enough transactions that paid out a total of $500 in commissions to CJ. So even if a merchant has a negative balance, as long as transactions are coming in that equal $500 in CJ fees (despite their balance being negative), CJ won't hit them with a $500 charge.

    I'm completely unbiased when I say this (I work equally with all networks) but when affiliates lose their money, so does CJ. The bottom line is that when a merchant is out to steal, everyone gets hurt. I don't know exactly what happened in ParaflexMed's case or whether or not they had a disagreement with CJ over something, but CJ loses their money when transactions are reversed.
    I think the point was that if they're deactivated they obviously won't have the transactions to pay the remaining 3-6 months of minimum fees... so is that balance taken from affiliates?

  15. #15
    ABW Ambassador Akiva's Avatar
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    Quote Originally Posted by ticketguyz
    I think the point was that if they're deactivated they obviously won't have the transactions to pay the remaining 3-6 months of minimum fees... so is that balance taken from affiliates?
    I belive that would be against CJ's own TOS. Valid transactions cannot be reversed if the merchant has already paid and CJ paid out the cash - however I don't know for sure since I don't work at CJ. But I doubt they would do that since that has the potential for legal trouble.
    Akiva Bergstrom | akiva@affsolutions.com | 718-871-8286

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  16. #16
    ABW Ambassador Ron Bechdolt's Avatar
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    Well, given the fact that this happened over so many months, I got paid for those sales, under the assumption that CJ had been paid. Why would CJ front all that money for ParaflexMed? Then in April they all got reversed, going three months back?

    This does not seem to jive with what Akiva is saying or I'm missing something somewhere.
    Ron Bechdolt | Affiliate Program Management Consultant
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  17. #17
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Quote Originally Posted by Akiva
    Haiko, the $500 fee is only if the merchant didn't have enough transactions that paid out a total of $500 in commissions to CJ. So even if a merchant has a negative balance, as long as transactions are coming in that equal $500 in CJ fees (despite their balance being negative), CJ won't hit them with a $500 charge.
    Akiva ... your not seeing my point.

    Advertiser is negative, they still owe CJ the $500 a month it's a contract and there is at least a 3 month cancellation notice req, so if the merchant stays negative and then cancells they still owe CJ the $1,500 and if the merchant doesn't pay ... where do you think this is comming from?
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  18. #18
    ABW Ambassador Akiva's Avatar
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    Quote Originally Posted by 7-days
    Well, given the fact that this happened over so many months, I got paid for those sales, under the assumption that CJ had been paid. Why would CJ front all that money for ParaflexMed? Then in April they all got reversed, going three months back?

    This does not seem to jive with what Akiva is saying or I'm missing something somewhere.
    Ron, CJ's system is automated. Commissions are automatically paid if they are credited. If after a few months of an ongoing battle CJ sees that they're not getting the money, they'll reverse the commissions so that they don't lose out on money they never got.
    Akiva Bergstrom | akiva@affsolutions.com | 718-871-8286

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  19. #19
    ABW Ambassador Akiva's Avatar
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    Quote Originally Posted by Haiko de Poel, Jr.
    Akiva ... your not seeing my point.

    Advertiser is negative, they still owe CJ the $500 a month it's a contract and there is at least a 3 month cancellation notice req, so if the merchant stays negative and then cancells they still owe CJ the $1,500 and if the merchant doesn't pay ... where do you think this is comming from?
    Haiko, I got that. However, I'm not so sure that CJ does that. Todd will need to answer that so that we know for sure what goes on when a merchant is deactivated due to non payment.
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  20. #20
    ABW Ambassador ticketguyz's Avatar
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    So... Todd came and left with no response... nice =)

  21. #21
    ABW Ambassador Ron Bechdolt's Avatar
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    Yes, we really need Todd's imput on this. I appreciate what you are trying to offer, Akiva, but this is not right and Todd needs to get in here and give us an explanation. If CJ is going to front the money for a merchant that is three months behind on payments, then CJ has to be responsible and pay us. It then becomes their responsibility to get the money back from the merchant. This is worse than the late payments I've been harping about at LS. I worked for these sales, I even have a dedicated web site for this merchant. Now I get three months sales reversed.

    Oh, I'm not happy about this! I really do like CJ and feel they have made great strides over the years, but this is unacceptable.

    Todd?
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  22. #22
    Affiliate Manager AmandaM's Avatar
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    Quote Originally Posted by Akiva
    Haiko, I got that. However, I'm not so sure that CJ does that. Todd will need to answer that so that we know for sure what goes on when a merchant is deactivated due to non payment.
    Well... from this link: http://www.cj.com/solutions/adv_acce...payment_policy

    "Obligations: Commission Junction is under no obligation to make payment to your publishers of payouts where there are insufficient funds in your account."

    I was under the impression that publishers were warned in some way when an advertiser's account dropped below $500 in escrow; is that not true?

    It seems unfair that an affiliate can make sales in good faith for a merchant and then loses his commissions when they suddenly decide to get rid of their CJ program.
    Last edited by AmandaM; May 6th, 2005 at 08:47 AM. Reason: Spelling
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  23. #23
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    Regardless of what is the cause of this, doesn't sound like a trusted third party
    solution to me.

  24. #24
    Super Sh!t Stirrer SSanf's Avatar
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    I was under the impression that publishers were warned in some way when an advertiser's account dropped below $500 in escrow; is that not true?

    It seems unfair that an affiliate can make sales in good faith for a merchant and then loses his commissions when they suddenly decide to get rid of their CJ program.
    That is exactly the CJ plan. They extend credit. You are told nothing about it and if you get stiffed, your problem. Every Christmas affiliates make thousands of sales in good faith only to have them reversed because of a merchant who had no intent to pay that CJ let advertise on your site and get free sales. They let you use space on your site that could have advertised an honest merchant without even telling you that your efforts were at risk.

    However, if they have enough in their account to pay the CJ fee, I guess, they can run their CJ program without covering the commission costs for quite a few months. I am sure, in that case, CJ takes their fee right away.

    If you don't like it or feel cheated, oh well, so sad.

    That is one of the major reasons CJ sucks big time.

    SAS lets insolvent merchants go down and sends the traffic to your default page but at least, you are not played for a sucker by SAS merchants!

    If you use CJ, just consider being played for a sucker and a fool as part of the cost of doing business with them. It will happen to you every year if you use them a lot. And, it ain't going to change. That is why Todd won't answer this thread.
    Last edited by SSanf; May 6th, 2005 at 10:23 AM.
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  25. #25
    ABW Ambassador Ron Bechdolt's Avatar
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    Been talking to AM's this morning and I want to thank all of them for their support and encouragement regarding this matter. Seems they all agree this is not a good position to put affiliates in...making sales for three months before discovering that the company is behind that long without any notification to affiliates.

    This needs to change. Todd, I really would like something from you here regarding this. You, more than anyone else probably, knows how insistent I can bee when I see something wrong that needs to be fixed. I've not heard one voice say the current system is good this way and every voice saying it needs to be fixed (excluding Akiva's explanations, of course).
    Ron Bechdolt | Affiliate Program Management Consultant
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