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  1. #1
    Join Date
    December 14th, 2006
    An Analysis of A Merchant's Reversal Report

    The merchant in this analysis maintains accounts in both CJ and SAS. It is not uncommon for this merchant that sometimes, its reversal rate could go up to as high as 94%. Iíll not reveal the name of this merchant, but I am sure many people already figured out whom I am talking about, because the same issue of this merchant has been discussed several times here in

    In the past 6 months, my friend Ada noticed two things: 1). the reversal rate of this Merchant is high; 2). most of her high ticket orders have been reversed.

    To confirm Adaís observations, I downloaded the transaction data from Adaís SAS account. The timeframe is from March 1st, 2007 Ė July 31st, 2007.

    Key Findings

    There are totally 98 transactions Ada made for this merchant in the past 5 months, and of these transactions, 28 have been reversed. So the reversal rate is 29%. One thing I noticed immediately is the average sale amount of the valid transactions is $54.5, while the average sale amount of the voided transaction is $94.9, the difference is $30! Although the reversal rate in terms of orders is 29%, the reversed commission is $531, which accounts for 41% of total commission in terms of dollar amount!

    Type Transactions Avg Sale Commission % to Total
    Sale 70 $54.5 $763 59%
    Void 28 $94.9 $531 41%
    $1,294 100%

    To further validate Adaís statement, I ran a frequency report for the valid transaction group. I found that 54.3% of the orders are below 50 dollars. There are 5 orders are greater than $100, which account for 7.1% of total orders. From the chart below, you can clearly see it is left skewed, meaning the low ticket items account for the majority of the total orders.

    Valid Sales
    Sale_Amount No. of Trans Percent Cumu Freq Cumu %
    <$30 19 27.1% 19 27.1%
    $30-$49.99 19 27.1% 38 54.3%
    $50-$69.99 15 21.4% 53 75.7%
    $70-$99.99 12 17.1% 65 92.9%
    >=$100 5 7.1% 70 100.0%

    Then I pulled the same reports for the voided transaction group. Statistically speaking, the voided transactions should have showed a pattern similar to that of the valid transaction group. But unfortunately, it appears totally the opposite.

    The biggest segment is the $100 and above group, which account for 35.7% of the total number of voided orders. Remember, this segment in the valid transaction group only accounts for 7.1% of its total transactions. This is very abnormal! The voided group is 500% higher than the valid group!

    Ada made 15 orders greater than $100, but 10 of them have been voided (by the way, the largest is greater than $500), resulting in a ridiculously high reversal rate of 66.7%, which is more than twice of Adaís average reversal rate: 29%.

    I have to say Adaís Statement is true.

    Sale_Amount No. of Trans Percent Cumu Freq Cumu %
    <$30 4 14.3% 4 14.3%
    $30-$49.99 5 17.9% 9 32.1%
    $50-$69.99 6 21.4% 15 53.6%
    $70-$99.99 3 10.7% 18 64.3%
    >=$100 10 35.7% 28 100.0%

    Possible Reasons

    When I saw these interesting numbers, the first thing came to mind is that these high ticket orders being voided probably is due to returns, because customers are more likely to return high value items if not satisfied. To my surprise, of all the 28 voided items, 27 of them are repeat sales, only one of them is due to return, and the sale amount is only $40.9. If 27 voided items are repeat sales, then both groups definitely should have showed a similar pattern. But what weíve seen here is that buyers seemed to favor CJ affiliates when purchasing high ticket orders, which of course is impossible unless something else is behind this mess.

    If return is not the reason, then is it possible that those parasites are smart enough to steal only high ticket orders from honest affiliates? Theoretically speaking, it is possible, but given the greedy nature of these parasites, I donít believe they would be lenient enough to let the low ticket orders passing by.

    Oftentimes, I wonder why an affiliate manager would want to spend so much time to manually compare cookies between CJ/SAS and reverse the orders. Because this can be easily done by using a piece of code to determine who owns the last click. Now I understand I am too naÔve. Things are much more complicated than what I had thought.

    I hope I am wrong

    I am a statistician, I donít know much about affiliate marketing. This is my guess:
    The beauty of this tedious and time consuming process is that one can manually pick these big ticket items, and label them as repeat sales.

    I hope I am wrong. And I sincerely hope this merchant is a good boy. But until and unless the affiliate manager of this merchant publishes the evidence for affiliates to review in stead of doing reversal orders in a black box, I couldnít help questioning the integrity of this merchant.

  2. #2
    ABW Ambassador
    Join Date
    January 18th, 2005
    Without naming the merchant, I see no value in your post and if anonymity is so important, I suspect there isn't anyone named Ada.

  3. #3
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
    Join Date
    January 18th, 2005
    St Clair Shores MI.
    You should view all the stats for Bonsai Boys of NY on both CJ and SAS. Looks like a rollicoaster ride with negative EPC weeks and reversal rates as high a 178%. I used to make 10 sales a week with them from for years on CJ links. Then they started at SAS too. They've never posted here but I made the mistake of lauding them to the community back in 2001. The hords signed up and I haven't has anything but a sporatic sale every few months since.

    Sure they're BHO riddled and have a bunch of cookie stuffing scumbags promoting them ... but they claim my thousands of targeted clicks don't lead to any sales... LOL :-)

    SAS 962 - View More Details
    Bonsai Boy of New York clicks=3658 sales=$86.95 1 $0.00 1 0 $0.00 0.03 % $0.00 reversal=$86.95 basically 1 sale = one reversal

    similar results though better with CJ showing 3 sales on 1200 clicks.
    Last edited by ecomcity; August 7th, 2007 at 08:11 PM.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

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