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Decius
08-17-2004, 05:26 PM
Hi there,

I am about to embark on creating an in-house affiliate program and wanted to know what pitfalls I should be looking for.

Specifically, what are some known ways for affiliates to try to fake sales and what can be done about it.

Also, what is the most effective way of tracking leads?

I'll ask more questions as I think of them. :-)

cheznoir
08-17-2004, 05:33 PM
One of the reasons not to do it in house and instead through a company like shareasale.com, they have the experience and know-how to avoid many of the pitfalls you would have to hit the first time out.

Chet

Decius
08-17-2004, 05:38 PM
:-)

That doesn't answer my questions at all, but thanks anyways!

Steve_S
08-17-2004, 06:27 PM
OK...let me try this.

1. It's unlikely that others who run CPA affiliate programs will post all the details on exactly how they catch affiliates who cheat. Respectfully, this Forum is open and can be read by numerous folks so why give them additional "tools" to cheat you.

2. Having said this, IMHO one of the most important tips is this: The time line when you actually pay your affilates verses the number of days that a consumer can void a given charge and request a charge back.

For example, you pay your affiliates every 15 days BUT the consumer/purchaser/affiliate has the right to dispute the charge 30 days or more after it's made.

3. Your TOS should not permit an affiliate to earn a commision from their own purchase of your product. I believe Amazon has something like this.

4. Manny of the procedures which we talked about in the following thread also apply to this issue. See:

http://www.geekvillage.com/forums/showthread.php?s=&threadid=25027

Just substatute "affiliate" for buyer. :)

5. Inherint in Chet's comment is a respectfull effort to try and talk you out of this handling of your own affiliate program. This also has implications for exactly which high quality producers will use your program with a sale that sticks.

6. Natch, I wish you the best of luck in whatever decision you make and respectfully hope some of the tips posted will help you.

:)

Decius
08-17-2004, 07:12 PM
Hi there,

"3. Your TOS should not permit an affiliate to earn a commision from their own purchase of your product. I believe Amazon has something like this."

why is this the case?

As for not divulging secrets... well, my concerns are moreso what tactics are used by ****mers, so that I can deal with them myself. If the solutions are not provided that is fine. :-)

So, are there any good examples of how affiliates take advantage of affiliate programs in an illegal way?

Czar
08-17-2004, 07:39 PM
Originally posted by Decius
So, are there any good examples of how affiliates take advantage of affiliate programs in an illegal way? For obvious reasons, it would be irresponsible to discuss these techniques in a freely-accessible public forum.

There are, however, plenty of cheat's "hangouts" online that savvy affiliate managers regularly troll to defend themselves against the latest techniques, devices and bogus networks. These, proxy IP checkers, effective interpersonal exchanges with other affiliate managers, time and experience will be the best tools in your arsenal.

Also ensure that your selected affiliate software solution has multiple anti-fraud mechanisms in place to avoid common exploits.

Decius
08-17-2004, 07:44 PM
Not discussing them in a public forum is as much a diss-service to ****mers as it is a diss-service to legitimate store owners. The knowledge should be known and addressed for prevention reasons.

Regardless, if that is the view of the moderators...

If anyone would like to PM me information in this regard, I would appreciate it. Or perhaps links to where I can get information as such.

Jack
08-17-2004, 07:51 PM
As far as affiliates earning commissions on buying products themselves, here's the pros and cons:

Cons of allowing affiliates to earn commisions on their own purchases:

- You may find some people who sign up for your affiliate program specifically to get the product at a lower price. The best way I have seen to combat this is to make the payout check minimum a bit over the cost of one affiliate payout (or require 2 affiliate sales before the first check is sent out).

- If the visitor was referred by another affiliate and then joins the affiliate program just to buy the product, the first affiliate won't get the payout they rightfully deserve. This is what I consider to be the biggest problem in allowing affiliates to receive commissions for their own purchases. It is one of the big reasons I don't tend to promote any affiliate programs in the webmaster area. When I did send traffic to some affiliate programs in the webmaster area, I ended up seeing a large amount of people sign up as affiliates and then make a sale to themselves. It was very frustrating.

Pros of allowing affiliates to earn commissions on their own purchases:

- You could earn a revenue stream from those who sign up for your affiliate program first as an affiliate but then decide they want the product. They may be on the fence at the original price, but would be willing to buy at the affiliate price. Many online marketers make a large amount by promoting to their affiliate base (Cory Rudl's company comes to mind).

- Some affiliates want the product so they have an idea of what they are promoting. Offering them the product by allowing them a commission when they buy can encourage them to promote the product more. I tend to think a company should give away the product for free to affiliates who generate a certain number of sales though.

- Many affiliates like to 'check up' on their merchants by placing an order with them to make sure everything is being tracked.

I tend to think that it is best to allow affiliates to earn commissions on their own sales as long as the area you are promoting does not have an awareness of what affiliate programs are. For example, if you are selling a product aimed towards webmasters, I would recommend you not allow affiliates to earn commissions on their own sales. This goes back to my point above about how allowing affiliates to earn commissions from their own sales causes the original referring affiliate to lose their commission. If you do not allow them earn commissions from their own sales, then it likely would be a good idea to offer the product to them at a discount once they are in the affiliate area.

Czar
08-17-2004, 07:56 PM
Bit of a nasty paradox isn't it. White hat hacker = black hat hacker and all that.

As mentioned, software providers, affiliate networks and affiliate managers regularly meet in the real world and surf IRC channels and less reputable "making money" forums to discuss and defend against exploits. Knowing for a fact, through my own experience and that of many of the network administrators who are active on Geek/Talk, that professional frauds do troll this particular board, I'm certain that you can appreciate that revealing too many secrets - when workable alternative channels are available - could do more damage than good.

If you are serious about your affiliate program, grill your software provider and speak privately with other affiliate managers at a bare minimum. Beyond that, you should consider regularly attending real-world networking gatherings with fellow affiliate managers and information officers.

That said, a quick search on Google will bring up plenty of unsavoury websites and devices that are developed for the sole purpose of ****ming affiliate operators and ad networks.

Vrindavan
08-18-2004, 12:04 AM
>>affiliates to try to fake sales and what can be done about it.

i hate a "random" site visitor using my affiliate link to fraud a merchant,
and this merchant subscequently ban my account

I should have a notice on my website
next to the banner or text link saying

if you want to fraud this merchant on buying goods or
submit invalid lead. Please click this URL to go direct to the merchant instead, DO NOT click my affiliate refer link to go there !!!

wsz
08-18-2004, 10:47 PM
Originally posted by Steve_S
2. Having said this, IMHO one of the most important tips is this: The time line when you actually pay your affilates verses the number of days that a consumer can void a given charge and request a charge back.

For example, you pay your affiliates every 15 days BUT the consumer/purchaser/affiliate has the right to dispute the charge 30 days or more after it's made.


If I recall correctly, MasterCard and Visa issuers have a time limit of sixty days from the date of the statement on which the charge appears. Which could lead to up to ninety days total from the purchase to the dispute/charge-back request.

So be sure that your credit card merchant account provider has good anti-fraud features. If you sell physical merchandise, I suggest only shipping to the confirmed billing address of the card. If you ever get burned (and you will), be sure to save the fraudster's ordering info to compare to future orders, and look for patterns.


5. Inherint in Chet's comment is a respectfull effort to try and talk you out of this handling of your own affiliate program. This also has implications for exactly which high quality producers will use your program with a sale that sticks.


Yes, because trust and risk go both ways. A productive publisher might be suspicious of an in-house program which they haven't seen before. But would have far more confidence if they saw an established network keeping the stats and sending the payments out.


6. Natch, I wish you the best of luck in whatever decision you make and respectfully hope some of the tips posted will help you.


Yes, keep us updated.

As general advise, I would say that the risk is based upon how much effort must go into a commissionable action. CPC clicks are easy, and thus are fraud-magnents. Fill-out-form leads can be faked, so make sure to emphasise that you will only pay for qualified leads (e.g. double-opt-in email subs, or legitimately-formatted/verified name/snail-mail info, etc.) Purchases are safer, but communicate with your card processor for advise on what to look for.

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