For many online merchants, affiliates are an indispensable source of leads and revenue. But if you have an affiliate program, you will inevitably face some form of affiliate fraud. We all want a sales force that can “make it rain.” But if you’re not vigilant against affiliate fraud, you can end up with deluge of chargebacks. We’ll look at how to spot it and what to do about it. Affiliate fraud is the willful abuse of an affiliate program to receive its payouts through fraud. Instead of taking on a single fraudulent transaction with a stolen card, merchants receive multiple bad transactions, and/or payout an affiliate for their fraud. A fraudulent affiliate will create multiple dummy customer accounts as their referrals to your site and make purchases with stolen credit card data. Or they can use cookies and malware to steal credit for leads from other affiliates. Here are five steps you can take to reduce affiliate fraud:

1. Spell out your terms and conditions for your affiliates.

List out your do’s and don’ts for promoting your brand. You don’t want affiliates spamming your target audience with popups and malware. Lay out some ground rules to protect your reputation and ensure a quality sales force.

2. Review your affiliates.

It’s tempting to auto approve your new affiliates. You want to make it easy for them to sign up, but a little diligence goes a long way. See how they plan to drive leads. Consider trial periods for new affiliates: higher minimum payouts, initially set monthly pay periods instead of twice-monthly. Fraudsters are looking for quick score and you can discourage them with reasonable restrictions that legitimate affiliates can live with.

3. Communicate with your affiliates.

Make a routine of reaching out to affiliates after their first sale, and when they pass designated milestones like making the top ten referrers. See how they are driving leads. Be suspicious when a stranger comes out of nowhere and gives you tons of leads, especially when they’re unresponsive to your contacts.

4. Know the data.

We can’t stress this enough! Data is your best weapon in preventing fraud. Fraudulent affiliates will often send traffic, generate leads, and put up numbers that vastly deviate from their cohorts. Extremely high or low conversion ratios, bizarre referring URLs and IPs, and referrals that sign up but never log in are a few red flags that comparative data can reveal.

5. Automate affiliate fraud detection.

Affiliate fraudsters target larger, more active affiliate programs where they can hide from manual detection. ChargebackHelp can build automated solutions into our custom programming to alert you against affiliate fraud.

Similar Posts

Comments are closed.