As affiliate marketers, we look at a number of factors to determine which programs we want to work with. Among these are obviously the type of products, the reputation of the merchant, the EPC, and how the program is managed. One other metric that is often debated is the Reversal Rate, shown only in some networks. The reversal rate can be an indicator of very good or very bad things, but you have to know what you are looking at to figure that out.
What is the Reversal Rate?
The reversal rate is quite simply the percentage of affiliate sales/leads that were reversed for any reason during a time period. I like that ShareASale shows both the 7 day and the 30 day reversal rate. You can see these even before you join the program.
Why Do Commissions Get Reversed?
Commissions can be reversed for any number of reasons. The most common is usually that the order was cancelled either before it was placed or after the customer received the merchandise. This would include orders where the credit card could not be processed. Orders can also be cancelled if they were duplicates for technical reasons or for fraud. Less commonly, a commission may be reversed because the customer exchanged the merchandise for a different size or color.
What Does the Reversal Rate Tell You?
In some cases a 0% reversal rate may tell you that the merchant never reverses sales even if the orders are cancelled. There are some merchants that do this for good will. We like those merchants. But I won’t list them here because I don’t want to encourage fraud.
A 0% reversal rate may also tell you that the merchant just does a great job with customer service and has a shopping cart that won’t process orders if the credit card cannot be used. These are merchants that are great to work with as well. There is little chance that you will end up pushing a lot of sales and then having to worry about having them cancelled.
So if a 0% reversal rate is optimal, does it mean that you should not work with merchants where the reversal rates are high? Absolutely not because there might be a great reason for those reversal rates. They key is to find out why those rates are so high. That requires communicating with the affiliate managers. Compare two programs I am in that both had reversal rates that bothered me this week:
- Amish Furniture. Reversal rates of 77.78% and 72.73%. I contacted the Affiliate Manager. It turns out that they had a technical glitch in their shopping cart such that if they hit the back button after checkout, it would fire the pixel again. Affiliates who saw the sales in their accounts would have realized it because they would have seen the same order numbers showing up over and over again. I didn’t have any sales so I didn’t know this. But the affiliate manager answered my question and I am satisfied with that. Affiliates are not losing any commissions that they earned.
- CafePress. Reversal rates of 30.67% and 25.54%. In this case, I did see a number of my own sales reversed, and using subid tracking I was able to tell that they were across all of my different niche sites (thus not isolated to any products in particular). I checked for duplicate sales and none of them were. The reversals were all marked as “cancellations,” so fraud was ruled out. I contacted the affiliate managers and they cannot provide me with any other reason except to say that the merchant in this case just reported them as all cancelled. This throws up a red flag for me because a merchant should not have a quarter to a third of its sales being cancelled unless their products are bad or people are targeting them for fraud.
These are just two incidents that I have encountered with reversals in the last week. That said, it’s not the first week I’ve dealt with reversal stats. I’ve seen Viator commissions reversed with reasons given each time, and I’ve talked to the Paul’s TV affiliate manager at one point about duplicate orders in their system. A couple of years ago Emitations was reversing sales where customers used coupon codes that were listed at the top of their site. I worked with them to have those codes removed from affiliate landing pages. As a loyalty site, I’ve had to work with Shoebuy on reversals for even exchanges.
What Should You Do If You See High Reversal Rates?
Reversals happen. How the merchants deal with them should give you the information you need to determine whether the program is viable for your purposes. The more information you can get about why the reversal numbers are what they are, the better decision you can make about 1) whether to promote the program at all, 2) whether to promote only certain programs, and 3) if there is a way to promote the program that will minimize reversals.
Do you consider reversal stats when you evaluate programs? To what extent do they factor into your decision-making process?
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