When it comes to affiliate marketing, not all traffic is created equal. It's important to distinguish between 'quantity' and 'quality' in terms of the potential sales your affiliates drive to your site. Being overly-fixated on the former, while ignoring the latter, could lead to a longterm loss of revenue.

The Negative Ramifications of Bad Traffic

A bad actor posing as a legitimate affiliate may use deceitful advertising, or even engage in outright fraud. The fraudster might use tactics like cookie stuffing or write scripts to spoof traffic figures, or even resort to using stolen cardholder data to complete fraudulent transactions.

When the cardholders discover the abuse, they either demand a refund from the advertiser or file chargebacks to recover their funds. In either case, the business will lose sales revenue. With chargebacks, though, you're also likely to lose any merchandise already shipped, and will be responsible for paying additional fees to cover the chargeback administration.

Chargebacks build up over time, leading to higher overhead costs. They may even come to threaten your business's sustainability if you come close to breaching chargeback thresholds established by card networks like Visa and Mastercard.

The bottom line: you end up paying higher costs for less impressive results that may cause long-term damage to your business. So, how do you spot those bad affiliates? Some common signs of affiliate fraud include:

• Overperforming campaigns
• Incongruity between traffic and sales
• Chargeback and fraud patterns

What Can You Do?

Fortunately, there are some best practices you can employ to identify and stop affiliate fraud. It's important to know your affiliates; check them out on social media, and ensure they are who they claim to be. Make a point of only working with trustworthy affiliates and networks.

It's important to take steps to mitigate your generalized chargeback risk. Review your policies and procedures carefully to identify any practices that might result in chargebacks.

Eliminating affiliate fraud is a challenge, but it's not an unavoidable cost of operating in this space.

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Melissa Fitzsimmons is Affiliate Fraud Specialist at Chargebacks911.

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Chargebacks911'is the original end-to-end'chargeback'management platform. We offer the first and only global solution that helps merchants fight'chargeback'fraud from both sides: prevention/risk mitigation and representment/revenue recovery.