Glossary / Definition
Chargeback.
A reversal of a transaction, resulting in the loss of a sale and commission for the affiliate.
A chargeback occurs when a customer disputes a charge with their credit card company, resulting in the reversal of the transaction. Affiliates lose commissions on chargeback transactions, and merchants may face additional fees and administrative overhead.
High chargeback rates can indicate fraudulent activity, customer dissatisfaction, or misleading marketing practices. Both affiliates and merchants aim to minimize chargebacks through honest marketing, quality products, excellent customer service, and clear refund policies.
Chargeback prevention strategies include fraud detection, customer verification, clear product descriptions, responsive customer support, and proactive communication about billing and subscription terms. Some affiliate programs have chargeback protection policies for affiliates.
Related terms
- Affiliate An individual or company that promotes products for a merchant in exchange for a commission.
- Affiliate Marketing A performance-based marketing strategy where affiliates earn commissions by promoting a merchant's products or services.
- Affiliate Network A platform that connects merchants with affiliates to facilitate affiliate marketing partnerships.
- Affiliate Program A system where a merchant rewards affiliates for driving traffic or sales through their marketing efforts.
- Commission The fee paid to an affiliate for generating a specific action, like a sale or lead.
- Click-Through Rate (CTR) The percentage of people who click on an affiliate link compared to those who view it.
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