In-house affiliate programs and "shaving"

[georgiek50]

Hi guys,

I joined an in-house affiliate program a couple of weeks ago and it has been converting great.

The problem is that 1/3 of orders are always tagged as fraudulent. They have an assoiciated IP address, time of sale, etc...and look completely OK to me.

Could this merchant possibly be "shaving"? Please advise.

[hunderdown]

Assume that they are. Can you prove it? If so, great. If not, are you still making enough for it to be a worthwhile program?

[markwelch]

What kind of product is being sold? For "downloadable" products (software, eBooks, movies, web hosting, etc.) and for electronics items, there is a very high level of fraudulent orders placed.

Although most of these orders are "flagged" with credit-card screening (including CVV and address checking), many online store systems (including Yahoo Merchant Services, which hosts many thousands of online stores) place these invalid orders into "pending" status and the transaction data is treated as "valid" and forwarded to the merchant's affiliate solution (such as ShareASale or Commission Junction).

Yahoo claims that this is appropriate since the merchant may contact the consumer to get updated credit-card info, but in real life 99% of such orders are fraudulent. Yahoo simply won't give merchants the option to reject these invalid orders entirely, and as a result, most fraudulent orders are "reported" to the affiliate solution.

It is a huge hassle to manually reverse the transactions using at the affiliate-solution site, but in certain product categories it's just part of doing business. Some merchants don't bother to reverse the transactions, if the fraud level is low, but in the high-fraud categories they must do so to stay in business.

[georgiek50]

Yes, it is a downloadable product. Never seen such "fraudulence" however. Will test with other merchants to see what is profitable...In the long run that's all that matters. Thanks for the advice.

[jomaxx]

They're tracking and reporting the sales, aren't they? If it's an in-house program, you'd think there would be better ways to cheat affiliates that have a lot less transparency.

[Michael Anthony]

The only real way to test this is to find a similar program elsewhere and compare the stats. This said, as the poster above suggested, if it's still making you a profit maybe it's better just to focus on the next project.