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  1. #1
    Analytics Dude Kevin's Avatar
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    Product Return Days (Not Cookies)
    I'm currently in talks with a merchant that offers lifetime, no questions asked product returns.

    In talking about affiliate marketing with them, obviously charge backs came up.

    In order to protect the merchant, as well as the affiliate:

    Is it fair to offer lifetime product returns, and then only charge back affiliates if it's returned in 45 days?

    It would seem to be the best way I can think of doing it. Any other thoughts?

    Is 45 days too long, considering the exposure the merchant has?
    Kevin Webster
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  2. #2
    Affiliate Manager cbsturg's Avatar
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    My limited experience suggests that a certain number of affiliates will see a quick way to take advantage of the company: charging up large sums of products and then returning them once their commission is guaranteed.

    Activate a new credit card with 6 months interest free, and you don't even have to pay a finance charge.

    If you run something like this, you might want to either: a) not pay affiliates for purchases they make through their own links, or b) be able to cancel an affiliate's commission at any time for any purchase they make through their own links.

    As for returns from legitimate sales are concerned, without looking at hardcore numbers, I can't give an opinion. Obviously you'd have to factor the merchant's average number of returns, the length a product is held before returned, etc.
    Last edited by cbsturg; July 16th, 2007 at 03:21 PM. Reason: grammar problems...
    Chris Sturgill
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  3. #3
    Outsourced Program Manager e-Gazer's Avatar
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    In my experience, while the merchant accepts a wee bit of liability when they agree to only reverse commissions if returns occur within a specific amount of time, affiliates rarely take advantage in high volume - they're far too busy I'd imagine in most cases, to make their money this way.

    During the years I managed the Rugman.com program, initially we held sales for 30 days before reconciling/accepting or reversing them, because of the original 30 day money back guarantee they offered, and I was required to charge back sales for which the customer had returned the product within the allowable return policy time. However, a few years in, a new marketing director implemented a change to policy whereby customers now had 90 days (an extra 2 mos!) to return product which resonated well w/ buyers and helped motivate more buyers to close the sale - and interestingly - lowered returns some.

    BUT, in the interest of maintaining loyalty and equity w/ our affiliate market, we agreed on implementing this extension to the return policy that I would only reverse commissions on products which were returned within the 30 day hold on affiliate sales, as opposed to holding affiliate sales for 90 days before reconciling/editing/reversing transactions.

    Our affiliates responded favourably to the change and our demonstration of support of their efforts. Aff sales continued to grow, and surprisingly (or not), we didn't run into any major issues of affiliates buying products just to return them in order to get a commission on a returned sale - which is why I have the opinion I do that it's not a major across-the-board issue but one to maybe just keep an eye out for - just in case.

    You can usually chargeback paid commissions if necessary if you find any affiliate to be doing anything fraudulent. In this case just spot check monthly for those affiliates generating a high volume of sales to see if any has a repeated incidence of returns and investigate where you suspect there may be fraud. And make sure you cover this possible issue in your T&C to cover your rear in the event it does happen, as well as what consequence may be taken in the event affiliates are found to be committing fraud in this (or any) way.

    While occasionally we may come across a few bad apples (as you will in any industry), in most cases, I've found giving affiliates the benefit of the doubt usually results in a stronger, more robust program. It helps the merchant establish equity w/ their affiliate group, and in turn, they usually work harder for you rather than against you.

    If you're lucky, you will have the support of this new merchant in regard to only reversing commissions on sales returned w/in the initial 30 days... but it does require some additional manual checking when doing your reconciliation each month in order to keep on top of it if you go that route.

    Good luck and let us know how you decide to resolve the matter once you do.

  4. #4
    Analytics Dude Kevin's Avatar
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    Thanks Liz and Chris. It's always my position to extend trust before distrust, so i will probably fall in behind Liz on this one.

    We only ship domestically, which should reduce some of the issues (and I do apologize to our international brethren for having the say that... we know there are great, honest affs everywhere).

    So it looks like we'll stay with 48 days (6 weeks) for chargebacks, and the lifetime customer return policy.
    Kevin Webster
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  5. #5
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by e-Gazer (with bold emphasis by Michael)
    During the years I managed the Rugman.com program, initially we held sales for 30 days before reconciling/accepting or reversing them, because of the original 30 day money back guarantee they offered, and I was required to charge back sales for which the customer had returned the product within the allowable return policy time. However, a few years in, a new marketing director implemented a change to policy whereby customers now had 90 days (an extra 2 mos!) to return product which resonated well w/ buyers and helped motivate more buyers to close the sale - and interestingly - lowered returns some.
    I've always heard that longer moneyback guarantees actually resulted in fewer returns, but this is the first time I've heard first-hand experience with it. Great feedback!
    Michael Coley
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  6. #6
    Outsourced Program Manager e-Gazer's Avatar
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    Hi again...

    @Michael - Yup - we heard the same thing, which is why we implemented the longer return policy actually - to test that theory - and it appears to be correct.

    The theory actually says the reason merchants experience fewer returns w/ a longer return day policy is because the longer a customer has to return an item, the longer they are likely to hold onto the item(s) and procrastinate on returning them. The longer they procrastinate, the more apt they are to either just forget about making a return altogether, or, to change their mind about the return - the item to be returned may "grow" on the customer encouraging a change of mind, so to speak.

  7. #7
    Analytics Dude Kevin's Avatar
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    Don't say that too loud Liz, or Legislation will be passed to make merchants place a sense of urgency on consumers returning items..
    Kevin Webster
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  8. #8
    Outsourced Program Manager e-Gazer's Avatar
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    Oh geez - wouldn't THAT be a treat! Let's hope not... anyhow it's only a theory at this point, it just happens to make sense.

  9. #9
    Affiliate Manager cbsturg's Avatar
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    It makes good sense to me. That is, off the top of my head, I can't think of a better explanation of the phenomena. Does anyone have a link to a report showing the decrease of returns with a longer return period? I would love to see something written down about it.
    Chris Sturgill
    "All my life I've had one dream, to achieve my many goals." - H. Simpson

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