Combating Affiliate Fraud?

[Nullified]

So how do the big boys do it?

 

I decided to offer affiliate payouts on a recurring basis dependent on a % of the sale, rather than the more common lump sum one time payout; however I have been struck with an issue where I can be subject to fraud. If an affiliate were to fake an affiliate sale for say an annual package from their own card, collect the affiliate payout then cancel services and get a prorated refund as per my tos then I would be out the % of that sale I paid out to the affiliate for referring himself and canceling. I have thought of only allowing monthly billing cycles to combat this, but I worry that I would loose sales by not offering annual, semi-annual and quarterly billing cycles to clients.

 

Due to using WHMCS's default affiliate system I am quite limited as to how I can setup my affiliate commissions system. I wish I could setup a way for the commission payout delay to be according to the billing cycle, but I can only append custom settings to packages, not billing cycles. I do however have it set to two weeks since I assume the most common time for a chargeback is in the first two weeks.

 

I am curious as to how the big boys with affiliate program managerial experience combat affiliate fraud.

[WHMCS JamesX]

Delay the affiliate payouts for a period (i.e. 3 months). If in that time, you come to discover that the commission is fraudulent, you can resolve it prior to having paid it out.

[Nullified]

IMO, anything over a month would discourage participation in the program.

[WHMCS JamesX]

The point, simply, is to delay the payout; in and of itself it's a fairly standard practice. You can make the delay however long you happen to feel comfortable with.