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General Guidelines | Article #239 :REFUND FRAUD

Refund fraud is a subject that is everybody’s hot button, from the affiliate all the way up to the vendor who created the product in the first place. Before we can figure out a way to do something about refund fraud, we first need to understand just what refund fraud is.

Refund fraud, first of all, only exists with digitally downloaded products. Why? Well, think about it. If you were to buy a product that you could physically hold in your hand and wanted a refund, you’d have to return the product itself in order to get that refund. So there can be no fraud. Even if your reasoning for returning the product is suspect as to its sanity, you still have to return the product. Therefore, there is no fraud.

However, if you purchase a digitally downloaded product, like an ebook, and ask for a refund, while you are legally supposed to destroy that download after your money is refunded, many people do not do this. That makes their refund fraudulent.

The worst part about refund fraud is that there are those out there who will buy a product with the intention of returning it right from the start. The reason is because they wanted to get it for free all along.

But the bigger problem is with the refund policies of companies like Clickbank. Clickbank’s refund policy is very specific and very clear. A customer can request a refund of any product for any reason. They don’t even have to give a reason. All they have to say is that they want a refund and it’s granted.

Many customers who purchase Clickbank products know this policy and will purchase a product simply to get it for free. And the worst part of this is that Clickbank doesn’t even check to see if a customer has a long history of refund requests. They say they do, but trust me, they don’t.

The end result of all this is that legit affiliates and vendors are getting cheated out of their profits because of frivolous refund requests. And the problem is getting worse and worse every day. Refund requests for products that used to be around 3% are now astronomical rates of over 10% or more.

So, the question is simple. How do we put an end to this? Well, unfortunately, the only way to put an end to it is to tell the affiliate programs, such as Clickbank, that we’re not going to put up with their no questions asked refund program. We need to let Clickbank know that there are other players in this game and that we will take our business elsewhere if they don’t start to tighten things up.

One thing Clickbank can do is require that all refund requests have a valid reason for the refund clearly stated. This will at least weed out the ones who aren’t intelligent enough to even think of a plausible lie.

As a vendor, I am appalled at the way vendors and affiliates are treated by Clickbank. Without us, they wouldn’t be in business. Therefore, it is time we took a stand and told Clickbank that we would no longer put up with their lax policies on refund requests.

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