Handling Refunds

When customers refund purchases, affiliate commissions need to be adjusted. This guide covers how AffiliateBase handles refunds and what you need to know.

How Refunds Work

Automatic Handling

When a Stripe refund occurs:

1. Stripe sends refund webhook
2. AffiliateBase identifies the original conversion
3. Associated commission is voided
4. Commission removed from payout eligibility

The Refund Flow

Customer requests refund
        ↓
You process refund in Stripe
        ↓
Stripe webhook notifies AffiliateBase
        ↓
Commission status → Voided
        ↓
Affiliate earnings updated

Commission States After Refund

Original State	After Refund
Pending	Voided
Due	Voided
Paid	Clawback situation

Pending/Due Commissions

If commission hasn’t been paid yet:

• Simply voided, no payout occurs
• Affiliate sees updated balance
• Clean resolution

Already Paid Commissions

If commission was already paid:

• Creates negative balance
• Deducted from future payouts
• May need manual handling

Refund Scenarios

Full Refund

Customer receives full amount back:

• Full commission voided
• Straightforward handling

Example:

Original sale: $100
Commission (20%): $20
After full refund: Commission voided ($0)

Partial Refund

Customer receives partial amount back:

Option 1: Void entire commission

• Simpler approach
• May be unfair to affiliate

Option 2: Proportional adjustment

• Recalculate based on final amount
• More complex but fairer

Example (proportional):

Original sale: $100
Original commission (20%): $20
Partial refund: $30
Remaining sale: $70
Adjusted commission: $14

Protecting Against Refunds

Holding Periods

Set holding period longer than refund window:

• 30-day refund policy → 30+ day holding period
• Commission doesn’t become due until refund window passes
• Most refunds handled before payout

Monitoring Refund Rates

Track refund patterns:

• By affiliate (high refund rate = red flag)
• By product (quality issues)
• By time period (seasonal patterns)

High refund affiliates may be:

• Attracting wrong customers
• Using misleading promotion
• Potentially fraudulent

Chargebacks

What Are Chargebacks?

Customer disputes charge with their bank:

• More serious than refunds
• Higher fees involved
• Potential fraud indicator

Handling Chargebacks

1. Stripe notifies of dispute
2. Commission voided (if not paid)
3. Or clawback created (if paid)
4. Monitor affiliate for patterns

Chargeback Warning Signs

• Multiple chargebacks from one affiliate
• Chargebacks shortly after conversion
• Pattern of disputed transactions

Clawbacks

What Is a Clawback?

Recovery of commission already paid to affiliate.

When Clawbacks Occur

• Refund after payout processed
• Chargeback on paid conversion
• Fraud discovered after payment

Handling Clawbacks

Option 1: Negative Balance

• Deduct from future earnings
• Automatic handling
• May take time to recover

Option 2: Direct Recovery

• Request return of funds
• More immediate
• Requires affiliate cooperation

Option 3: Write-off

• Accept the loss
• For small amounts or special cases
• Document the decision

Affiliate Communication

Notify on Refunds

Consider informing affiliates when:

• Commission voided due to refund
• Clawback created
• Negative balance applied

Sample Communication

“A commission of $20 for order #1234 has been voided due to customer refund. This adjustment is reflected in your current balance.”

Setting Expectations

In your affiliate terms:

• Explain refund handling policy
• Note that commissions are adjusted for refunds
• Clarify clawback procedures
• State the holding period purpose

Best Practices

For Prevention

1. Adequate holding periods: Match or exceed refund window
2. Monitor patterns: Watch for high-refund affiliates
3. Quality checks: Ensure affiliates promote accurately
4. Clear product descriptions: Reduce buyer’s remorse

For Handling

1. Act quickly: Process refund adjustments promptly
2. Be transparent: Communicate with affiliates
3. Be fair: Consider partial commission for partial refunds
4. Document: Keep records of all adjustments

For Disputes

If an affiliate disputes a voided commission:

1. Provide refund evidence
2. Show the original transaction
3. Reference your terms
4. Be fair but firm

Configuration

Refund Window Setting

Consider your refund policy:

• 14-day refunds → 14+ day holding
• 30-day guarantee → 30+ day holding
• 60-day trial → 60+ day holding

Partial Refund Handling

Decide your approach:

• Void entire commission (simpler)
• Proportional adjustment (fairer)
• Configure in settings

Reporting

Refund Reports

Track refund-related metrics:

• Total voided commissions
• Voided by affiliate
• Voided by product/campaign
• Clawback amounts

Using Refund Data

High refund rates might indicate:

• Misleading affiliate promotion
• Product-market fit issues
• Pricing problems
• Fraud patterns

Troubleshooting

Refund Not Reflected

1. Check Stripe webhook delivery
2. Verify conversion ID matches
3. Allow processing time
4. Manually void if needed

Commission Not Voided

1. Confirm refund was processed in Stripe
2. Check webhook logs
3. Match transaction IDs
4. Contact support if stuck

Affiliate Disputing Void

1. Provide refund evidence
2. Show Stripe transaction
3. Reference terms of service
4. Escalate if needed

Next Steps

• Configure holding periods
• Set up payout thresholds
• Learn about commission rates