First, let’s begin by addressing what affiliate fraud is.
Affiliate fraud is any purposeful attempt to make illicit money off an advertiser’s affiliate marketing. Fraud is one of the costliest threats to affiliate businesses and left unchecked, can nibble away at your ROI.
How do affiliates commit fraud?
Affiliates are creative when committing fraud, but we’ve made a list of the 3 most common ways listed below:
- Fake conversion means a click, completed lead, app install, or even a sale involved faking a conversion to collect money. It is often done using bots but can also be done with human clicks.
- Click stuffing involves installing fraud where an affiliate stimulates click(usually with bots) on ads unbeknown to a user, so the user then installs and app organically. The affiliate company then gets a commission even though their marketing efforts had nothing to do with an app install.
- Duplicate content- affiliates can duplicate content from other legitimate publishers and re-publish original content in a bid to redirect traffic to their sites and receive credit for any conversions made.
Fraud is not a mistake. It is intentional and comes from affiliates who are trying to “play the system.” The first line of defense against fraud is to vet the partners who sign up. We don’t expect you to spend hours checking potential affiliate’s backgrounds, but a quick Google search and online handles can tell a lot about someone. Most fraudsters don’t use their real names, so if you can’t find them in a quick search, that should be red flag number one. Another way to weed out the fraudsters is to ask for their social media handles when they sign up; then, you’ll be able to check their profiles and see if their previous ads add up to what they’re saying they’ve advertised.
Stop Affiliate Fraud
Most affiliate marketing is commission based on a sale, and fraud usually happens on returns/chargebacks. Fraud can be mitigated by making the return window shorter than the affiliate payment window. What do we mean by this? Let’s say sales were made in June by you won’t pay for those sales until 30 days after. This allows for two things to happen during those 30 days: 1) you can stop payments for any returns you suspect were fraudulent, and 2) stop payments for any chargebacks you suspect of fraud. Giving yourself 30 days to pay commissions gives you time to investigate any suspicious behavior to stop the fraud. It may upset some of your affiliates, but it is a quick way to ween out the partners trying to “play” the system by trying to acquire unearned commissions.