Reversals happen. They happen to merchants, and by extension, they hit affiliates too. Of course, affiliates love programs with “no reversals” policies, but if you, as a merchant, aren’t ready to offer one, I strongly encourage you to at least stick to the following 3 best practices:
1) Locking Periods — Set the locking period in a way that both gives you enough time to react to your customers’ returns and cancellations, but doesn’t stretch this time beyond the sensible time period required for you to apply the corrections/changes. After all, affiliates don’t get any certainty on their earnings until that commission locks in their account.
2) Explanations — Always provide affiliates with detailed (even if eloquent) info on the reason for the reversal (e.g.: invalid credit card, return/cancellation, duplicate order, customer fraud, affiliate fraud, non-qualified lead or non-fulfilled order requirements, test transaction, etc). Affiliates have the right to know what’s going on. Reversals without explanations are a sure route to disaster.
Below you may see how affiliate commission reversal/correction options look on ShareASale and Commission Junction respectively (frankly, I love ShareASale’s options better, especially the fact that when choosing “Other” you can manually enter your own reason):
3) Keeping Your Word — Whatever your commission reversal policy says, stick to it! If you get a customer that stays with your service for 3 months and then cancels their membership, but your risk-free trial period is set at 30 days (within which they didn’t go away), and your affiliate commission locking period is 40 days, there is no reason whatsoever to even think of reversing the affiliate commission. I’ve had this situation come up just yesterday.
As always, if you have any suggestions about this topic (as an affiliate, merchant, or affiliate program manager), your comments are warmly welcomed.