This does not add up

[bb1web]

It's not surprising that some sponsors seem to attract more scamming affiliates - maybe they learn by example.

That knife cuts both ways.

While it is always possible to any aff ... I don't care if you're crazy enough to put in your ads (no bonus chasers need visit) - yes I did, quite often in fact ..

but anyway ya it can happen but in my 10 years I've had about 3 (that I was told about anyway) .. but I don't recommend taking bonuses etc, rather I focus on player satisfaction and I think that's the kind of traffic I mainly get. People not afraid to gamble their money .. but they want treated right when they win and they like having recourse (me) when they are not treated right.

If I was all about bonuses ... I bet I'd have had a ton more chargebacks in that decade of time.

I know that isn't an answer but it certainly adds credibility to Renee's POV (MHO).

[Betpartners]

I disagree with Affiliate managers on this one.

Affiliates simply do not have the means to verify and check who signs up through their links/banners, the programs do.

The programs can initiate verification checks via passports, bank statements, call backs etc, the vast majority of affiliates are unable to even begin to have this sort of set up due to costs etc.

Affiliates bring the potential sign up to the programs door, it is at this point that it becomes the affiliate programs responsibility to do the required security checks.

Bet365, Ladbrokes and others do Television commercials in the UK, if a punter comes via a television ad or via some other form of advertising and the gambling site were hit with chargebacks would they then demand a cut in the advertising money they have spent on the TV/Radio/Press campaign?

Would they demand that the TV/Radio/Press outlets pay the chargebacks?

And most TV ads, Radio ads or press ads carry codes with the ads so that the respective companies can track performance and so it is not as if they cannot then demand a discount from the tv/radio/press outlets, they will have the stats at hand.

But they dont and the reason why is that the tv/radio/press outlets would not countenance it.

So why should affiliates?

Well first off its in the terms generally so we cannot argue really.

But the main reason is that individual affiliates are soft targets for this.

Are the affiliate programs doing anything wrong?

No according to their T&C's, but that dont make it right.

The idea that affiliates have to accept some form of security costs as part of being an affiliate is in my opinion wrong.

Affiliates do bring players to the gambling companies and it is correct that if we dont send the players that the gambling sites dont get the revenue but the arguement that it should work both ways as suggested by Renee is accepting that the programs no longer have the responsibility to secure their own customers.

Affiliates do not share in costs savings being distributed by affiliate programs and neither should they be responsible for security costs.

There are many examples that i can produce, like the street promotors in the holiday resorts giving out flyers to entice people in to the nightclubs they are promoting.

If one of the clubbers gets out of hand (probably a Brit) and gets drunk smashes the place up, has a fight with the bouncers etc would the cost of the damage or part of it be on the street promoter who handed out the flyer to the drunk in the first place.

No, but the security on the door may have a question or two to answer.

Hate to say this and dont want to antagonise the AM's but as a matter of standard business practice the programs and in turn casinos/poker rooms and sportsbooks should have adequate security in place from the get go.

A programs failings on security checks should not be put at the door of the people that have zero control over security.

As for an affiliate paying the whole 100% chargeback, seriously?

[GamTrak]

I disagree with Affiliate managers on this one.

Affiliates simply do not have the means to verify and check who signs up through their links/banners, the programs do.

Excellent points BP, but this one is the most important!

I had no idea the affiliate took 100% of the hit for something they have no control over until this thread. IMO it's just more of the stuff & short end of the stick we get. It's all about trust and mine is shrinking more each day when it comes to a lot of things in this industry.

[dhayman]

I am not saying that I am entirely in favor of this new chargeback accounting method, but I think they devised this to make it simple for them mathematically, and so that they don't have to go back and determine what portion of revenue was directly attributable to the chargeback deposit.

This new way means that you will be penalized your Commission % * Chargeback Amount. This can work for or against you, as I see it (relative to the old way, which was just to reverse the commission attributable to the chargeback). If someone deposits an amount that is charged back, and hardly plays, the affiliate gets charged an over-abundant amount. If the charged-back player played a ton, and generated a lot of revenue, the affiliate could benefit, relative to the old accounting practice.

This is how I see it, and we will see how it all plays out. Regardless, the fees continue to go up, and the affiliate continues to see the brunt of it.

[giggles7p]

I 100% disagree with the reasons behind an affiliate company charging an affiliate 100% of a chargeback.....its absurd!

Thats like saying a land based casino accepts a check from someone to gamble at their establishment and later finds they did not have the funds.....does that mean they can charge the parnets for giving birth to this person in the first place?????

[RayUK]

*snip*
This new way means that you will be penalized your Commission % * Chargeback Amount.
*snip*

But they aren't doing this, they are penalizing the affiliate 100% of the chargeback amount. In my example above the sponsor is making a profit on each chargeback, with the profit coming from the affiliate.

[Nandakishore]

A programs failings on security checks should not be put at the door of the people that have zero control over security.

I fully agree. I don't think there is any industry other than the online gambling where an advertiser, that is what an affiliate is, can be made to share costs caused by fraud for which he has no responsibility at all. He does not have any access to the fraudulent party, he doesn't even know whether it was really fraud. This is only possible because the industry is not regulated, so the affiliates have to accept whatever terms are dictated by the affiliate programs.

[universal4]

We have discussed chargebacks here before.

In some cases some affiliate programs, not just poker rooms or sportsbooks, charge the affiliate 100% of the chargeback.

I have always thought this was a disgusting practice, and when a new/small affiliate gets hit with this in their early days as an affiliate it could potentially wipe them out or at least completly wipe out earnings for them at places.

Rick
Universal4

[jarvi]

Reminds me of a quote from an AM of a sportsbook years ago when I asked why I couldn't login any more. They replied I had cost them thousands of dollars because of chargebacks and kicked me out. Actually, I hadn't cost them thousands and if they had invested in better fraud detection they could have minimised the loss. I don't think the sportsbook exists now.

I'm all for sharing the costs of the chargeback. That's what partners do. Copping the entire amount for something we have no control over is just wrong on every level.

[Renee]

Thanks for the comments about my post...

This is a comment I'd like to put out there.. that no fraud prevention method can ever be 100% secure because there are always new ways to get around them, and this is why the details of fraud will never be disclosed past the doors of the risk management department.

Someone once said that a junkie will always find a way to get his drugs.. just like a fraudster will always find a way around anything. You're right, it is our fraud department's job to ensure that these things are taken care of and prevented where possible..

But what about a player who has played for 2 years and never stepped out of line, has had all their documents approved etc (as you guys mentioned).. they suddenly start charging back the deposits they have made over the last 6 months (this is the amount of time the BANKS give them to chargeback, not us)... I don't know how the fraud team works, but to look at it from an outsiders point of view, how could you possibly know that this person will chargeback?

[Betpartners]

Thanks for the comments about my post...

This is a comment I'd like to put out there.. that no fraud prevention method can ever be 100% secure because there are always new ways to get around them, and this is why the details of fraud will never be disclosed past the doors of the risk management department.

Someone once said that a junkie will always find a way to get his drugs.. just like a fraudster will always find a way around anything. You're right, it is our fraud department's job to ensure that these things are taken care of and prevented where possible..

But what about a player who has played for 2 years and never stepped out of line, has had all their documents approved etc (as you guys mentioned).. they suddenly start charging back the deposits they have made over the last 6 months (this is the amount of time the BANKS give them to chargeback, not us)... I don't know how the fraud team works, but to look at it from an outsiders point of view, how could you possibly know that this person will chargeback?

I agree with what you are saying Renee, however any other business be it shops that continually get ripped off to credit card companies that get done for millions daily factor in the cost of fraud within their business model.

Any risk management of any business should as a matter of routine calculate the potential cost of fraud to their business and adjust costs as they determine.

Affiliate programs should do the same.

It should be factored in to the revenue share they hand out or marketing budget or whatever cost frames they have.

Not to do so and then ask the affiliates to pick up the tab is i think unique to the affiliate industry and an unfair practise.

I am sure you would start jumping up and down if your bosses turned around to youi Renee and said they will deduct your wages by 20% because you are bringing in to many affiliates that are bringing in players that do fraud.

You would not stand for it and why should we.

[Renee]

While I think you have somewhat of a point, the reason we deduct these costs on a per case basis is to ensure that ALL affiliates are not paying for the bad comings of a handful.. I personally think that's fair.

Perhaps if the aff programs did deduct these from the commission percentages there would be less need for them to change the terms later like some are doing now...

I think the difference between affiliates picking up the chargebacks and me having my salary dropped is that I don't make commissions on you guys... so if I bring in an affiliate who makes 1 million per year, I get paid the same.

[Betpartners]

While I think you have somewhat of a point, the reason we deduct these costs on a per case basis is to ensure that ALL affiliates are not paying for the bad comings of a handful.. I personally think that's fair.

Perhaps if the aff programs did deduct these from the commission percentages there would be less need for them to change the terms later like some are doing now...

I think the difference between affiliates picking up the chargebacks and me having my salary dropped is that I don't make commissions on you guys... so if I bring in an affiliate who makes 1 million per year, I get paid the same.

Surprisingly to me Renee i have spoken to a few affiliates about this and they tend to disagree with my point of view to some degree as well.

So its not like this is an affiliate V Program issue, rather an industry issue

I will concede that it is a very tricky subject indeed.

I also think you should demand a bonus if you bring in an affiliate that brings in 1 million a year

And an even bigger bonus for dealing with a self opinionated ass like me

[Renee]

Surprisingly to me Renee i have spoken to a few affiliates about this and they tend to disagree with my point of view to some degree as well.

So its not like this is an affiliate V Program issue, rather an industry issue

I will concede that it is a very tricky subject indeed.

I also think you should demand a bonus if you bring in an affiliate that brings in 1 million a year

And an even bigger bonus for dealing with a self opinionated ass like me

Yeah it is a tricky subject.. unfortunately I don't think it will be one ever to be agreed upon...

To be honest, I don't mind not being paid a commission because I love my job.. and I think I end up doing my job better because I treat all affiliates the same - I'm not just chasing the big aff who will boost my paycheck.. maybe another reason people should have voted for me in the igb aff awards

[Muppet]

I had this discussion with one program who shall remain nameless last year and lost. They deduct chargebacks from our commission rather than the casino's net revenue position.

The player deposited several thousand, lost, then charged it back. The casino lost nothing except for any chargeback fees. So in the end they made a profit on the chargeback and guess who paid?

[James_W]

Im sure they mean a % and not the actualt $100 in full. By that I mean this.

They deposit $100 - you earn $25

They reverse it - You lose the $25 you earned.

That is how bet365 handle chargebacks. It is simply reversed out the system exactly as it entered the system.

Regards

James

[dhayman]

While I think you have somewhat of a point, the reason we deduct these costs on a per case basis is to ensure that ALL affiliates are not paying for the bad comings of a handful.. I personally think that's fair.

Perhaps if the aff programs did deduct these from the commission percentages there would be less need for them to change the terms later like some are doing now...

I think the difference between affiliates picking up the chargebacks and me having my salary dropped is that I don't make commissions on you guys... so if I bring in an affiliate who makes 1 million per year, I get paid the same.

I understand that chargebacks do cost the programs money, but a much more amenable mechanism would be for the vendors to reduce commission rates by a %, to accommodate all expected charges. The Credit Card industry is famous for handling things that way. A certain % of all debits are never paid to credit card companies. They are aware of this %, and they use it when deciding what the overall APR % should be on cards. It is a cost of doing business, and they wind up passing back to the customer, but in a much more discreet manner. In our industry, for those who push it back on affiliates, it is all made public. This is discouraging to affiliates, who don't have much control, if any, on the situation. If a specific affiliate is racking up unusual chargeback charges, and this looks fishy, let the vendor terminate their agreement with him/her. This industry still requires maturation, and a lot of these companies don't understand the ramifications of their actions, and unfortunately, do not know how to see the picture. They need to be more discreet with these chargebacks, and treat them as a cost of doing business.

[Renee]

I understand that chargebacks do cost the programs money, but a much more amenable mechanism would be for the vendors to reduce commission rates by a %, to accommodate all expected charges. The Credit Card industry is famous for handling things that way. A certain % of all debits are never paid to credit card companies. They are aware of this %, and they use it when deciding what the overall APR % should be on cards. It is a cost of doing business, and they wind up passing back to the customer, but in a much more discreet manner. In our industry, for those who push it back on affiliates, it is all made public. This is discouraging to affiliates, who don't have much control, if any, on the situation. If a specific affiliate is racking up unusual chargeback charges, and this looks fishy, let the vendor terminate their agreement with him/her. This industry still requires maturation, and a lot of these companies don't understand the ramifications of their actions, and unfortunately, do not know how to see the picture. They need to be more discreet with these chargebacks, and treat them as a cost of doing business.

So you're saying that all affiliates should pay for the cost of the chargebacks that come from a handful of them?

Personally I think that's unfair for those who don't ever get any players who chargeback.