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  1. #1
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    Lightbulb Does Auto-Deposit Protect If Merchants Drop Out?
    Here's a hypothetical scenario for ya...

    Suppose you have a merchant on auto-deposit. Suppose you have $1000/mo in commissions for that merchant. Suppose also that all their transactions are the weird "pending" (but processing) non-locked kind, meaning you have to wait 60 days before they're locked.

    The way SAS is structured, you don't see your commissions until after 20th of the month for the previous month's sales, and the way the pending transactions are stuctured, you don't see those commissions until 60 days after the sale. Meaning (I think) that you won't get commissions for non-locked pending sales until much more than 60 days, more like 80 days out (for transactions on the first of the month).

    Now, what if that merchant drops off SAS just before the 60 days is up, while you're expecting somewhere between $1000 and $2000 in commish? Does auto-deposit protect you?

    Is my understanding of how things work incorrect or is this a very real scenario?

  2. #2
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    No, it's my understanding that you are not protected. The sale isn't yet confirmed (so it can be reversed, for example), so no debit has made to their auto-deposit account yet. This is just my guess, and I try to always guess conservatively when it involves my risk and my money.

    To know how it works in detail, to get the actual answer and not my guess, I suggest you contact SAS directly or ask them to reply here to this specific question.

  3. #3
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    Ugh, I think you're right Donuts. These products could in theory be "returned", thus voiding the commissions - yup, every last one of them, even if the merchant is still in business and simply moves to another network.

    What a loophole for merchants to exploit, though. There's so much blind trust going between affiliates and merchants it makes my head spin. From a risk analysis point of view I think we're idiots.

    And yeah, I intend to ask SAS. I'll let everyone know what they say.

  4. #4
    Life is Supposed to be Fun! Rexanne's Avatar
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    Quote Originally Posted by Mr_C
    There's so much blind trust going between affiliates and merchants it makes my head spin. From a risk analysis point of view I think we're idiots.
    LOL Mr C - it's the thrill we're after.
    Peace,

    Rexanne

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  5. #5
    Affiliate Manager PetsWarehouse.com's Avatar
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    If the balance is depleted, and the credit cards are declined, you're out of luck!
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  6. #6
    The Seal of Aproval rematt's Avatar
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    Auto deposit is a payment mechanism designed to instill some trust that we will get paid for legitimate sales, it is not the deciding factor of whether a merchant owes commissions or not. Whether the merchant remains in SaS or not or has auto-deposit or not, all legitimate sales up to the point that they close their program are a legal liability. Sales that the merchant voids after that point would need to be legitimate reversals or they would be considered fraudulent on the part of the merchant. The problem is proving it without taking them to court.

    My guess would be that a merchant that refuses to pay legitimate commissions earned is probably closing their program completely or going out of business. If they are going out of business we are just additional creditors at the bottom of the food chain. If they were simply moving to another network they would have a hard time taking any of their current producers with them after giving them the shaft. And recruiting new affiliates would be difficult once word of their past behavior got out. Hell, if you couldn't trust them at SaS, where could they possibly go that you would trust them more?

    -rematt
    "I know that you believe you understand what you think I said, but I'm not sure you realize that what you heard is not what I meant." - Richard Nixon

  7. #7
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    Very good point Rematt. SAS really is a kind of test of integrity, I suppose.

  8. #8
    Newbie Rolet's Avatar
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    ok from the AM or Merchant side - we have an account setup that when it runs low (each account is set up differently, but mine are all on the $25 mark) then the credit card on file with SAS gets charged either $100 or $200 to refill my balance to pay affiliates, so in this instance, the merchant has all ready deposited the money with SAS to cover your commissions, if their cc is declined then the account is placed on hold and the links don't work. SAS protects your commission until it is time to pay.

    Does this make sense?

  9. #9
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    Yes, but what about pending, non-locked sales? I.e. not just those marked "processing", but those with a lock date of 60 days after the sale? Are these amounts still deducted from your credit card and held in trust by SAS?

    If that's the case then that's wonderful. If not then it puts affiliates in a tough spot.

  10. #10
    Newbie Rolet's Avatar
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    yes they are - when a sale has been made the merchant account balance is automatically debited the commission amount, it is then held by SAS until the time comes to pay the affiliate

  11. #11
    Newbie Rolet's Avatar
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    SAS's system is fantastic, they not only help protect merchants but they also look out for affiliates...

  12. #12
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    Righteous!!!!!

  13. #13
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    There's so much blind trust going between affiliates and merchants it makes my head spin. From a risk analysis point of view I think we're idiots.
    And it's equally idiotic for a merchant that actually intends to be successful to go around messing with affiliates. This community is not THAT large and many members of SAS are also members of CJ or LinkShare or one of the other networks. If a merchant behaves in the way you hypothesized, then the first thing to do IMO is to post the situation here (identify the merchant and the details), to see if others are affected. Then, everyone needs to keep an eye out to see if the same merchant pops up at another network. If so, use the power of communications to make everyone over there aware of their previous behavior. As I've said before, information is power, and any merchant who tries to pull a fast one more than once has essentially committed suicide in the affiliate world. If that happens, then goodbye to bad rubbish is my attitude.

    .

  14. #14
    ShareASale President/CEO and ABW Veteran Brian - ShareASale's Avatar
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    Auto-Deposit still runs for merchants who have chosen pending sales as a model.

    The scenario described could leave ShareASale holding a commission for you where a merchant is offline and gone. We make every effort to get that money from a merchant in that case - and in any case where that is not possible, we still make every effort to pay affiliates for those sales.

    In pending sales situations, a merchant must retain a minimum of the balance of transactions on hand... so theoretically this cannot happen. Obviously, theories sometimes don't work out, and to that end, we are making some changes to how this works in 2008. To date, however, I should note that no situation that I am aware of has ever come up with an affiliate not being paid due to this problem. ShareASale has occasionally been stuck with the ball, so to speak, but affiliates are paid.
    Thanks,

    Brian Littleton
    President/CEO - ShareASale.com, Inc.

  15. #15
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    Dude, you are awesome, SAS is awesome. I am humbled by your awesomeness.

    Thank you for doing this, I'm sure we all appreciate it.

  16. #16
    Life is Supposed to be Fun! Rexanne's Avatar
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    Just another example of SAS class
    Peace,

    Rexanne

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  17. #17
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by Brian - ShareASale
    ShareASale has occasionally been stuck with the ball, so to speak, but affiliates are paid.
    This is one of the many things that sets ShareASale apart from most other networks!
    Michael Coley
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  18. #18
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    I love it!!!

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