(Click image to read Warrior Forum thread)
Yes… I’m Clickmerchant on the Warrior Forum.
Well… I figured it was time to bring up some news that’s taking all ClickBank vendors and affiliates by storm.
Here’s how my day started… I check my ClickBank account… and:
Apparently ClickBank is getting sick of processing so many refunds. Well… what do you expect when you have a 60-day no-questions-asked refund policy on your digital products…
So ClickBank has decided to categorize vendors and affiliates into color-coded risk management tiers.
It’s all based on the number of refunds and chargebacks you have, but ClickBank claims it is incorporated into some sophisticated algorithm they’ve come up with (learn more – CB help page).
I’m a programmer… and any way you look at this… it doesn’t require any “sophisticated” algorithm to do this simple number-crunchin’.
I’m in the internet marketing niche… this means that the affiliate products I promote inherently come with an extremely high refund rate. This is because people just buy them up by handful, take in as much as they can, and get a refund… I mean, it’s the newbies that buy these products because they’re wanting to learn, and they’re likely to get a refund because they’re the ones who are still strapped for cash.
Anyways… I’ve been promoting products in the internet marketing niche, and now my ClickBank account is in the “Unacceptable” risk management tier (previously known as “High Risk”) because of the high refund rates.
As an affiliate using sound and ethical promotional practices, I absolutely feel that it is by no means my responsibility to attempt to lower the refund rate for these products that are now jeopardizing my account status.
I don’t mind paying a fee for high refunds because that would be a good motivator… but… is it really fair to threaten my account (among thousands of highly-regarded affiliates) of termination?!
Either way, the good news today that kept me from holding up a sign that says “Will work for food” is that today is the best day I’ve had (thanks to Bring the Fresh) since the previous Google EMD update regarding my ClickBank earnings:
Please leave your comments! What do you guys think about this ClickBank risk management tiers system?
hy my friend i appreciate your article, today i checked my account clickbank and saw this message Your account is currently tiered as very good.* If your account remains in this tier after January 2, 2013, it will not be subject to any additional vendor fees. It will be subject to chargeback fees your account is affiliated with. what do you think about this and what does it mean???
Hey Badr,
It means you’re in good shape. You’ll be earning points instead of having them deducted after January 2nd. Everyone starts at 100, and when your account is good or very good, you’ll be earning points. If your points get down to zero, your ClickBank account could be terminated. I wish my ClickBank account wasn’t at “highest risk” or “unacceptable” :/. I’m working to promote products outside of the IM niche now because it is Work From No Home that’s killing me with a rediculous refund rate of 46%… And I’m not using any shady promotional techniques. I can’t believe ClickBank is punishing affiliates for refunds… I mean, the extra fees would be OK, but having the threat of your account being terminated? I think ClickBank is facing major pressure from credit card companies for all of these refunds, but it’s their own fault. ClickBank doesn’t stop serial refunders, and most customers in the IM niche know they can just get a refund yet keep the product.
Either way, you are in the clear my friend! What niche are you focusing on, if you don’t mind me asking?
I am really not sure what to do now. I was just planning on starting up a huge effort to promote hundreds of clickbank products with a massive authority site over time…
But now I really do not know if I should even bother because of the new risk of having an account closed…
I could build up a big site to promote a few hundred vendor products and then for some unknown reason lets say I start to get a high risk rate and then my account gets closed after all that effort with no recourse ?
If my account gets closed that means I can never again promote any product on clickbank again ?
Hey Tom, I’ve been going back and forth with their support team.
You don’t need to worry as much as you think. Firstly, I’ve proposed the idea of them integrating another parameter in their algorithm. It would compare vendor refund rates with the affiliate’s individual refund rate. If the affiliate’s refund rate is lower or the same, they shouldn’t be punished.
They said they would take it into consideration. We’ll see :/
Also, you should still promote ClickBank products, but try to use your intuition and better judgement to pick products. Firstly, stay away from the IM niche, unless you promote Bring the Fresh (vendor refund rate = 5.5%, my refund rate is 4%).
If your account gets closed down on ClickBank, you can easily open up another one.
Remember that after Jan. 2nd, you start out with 100 points like everyone else. If your account is still “Unacceptable”, you will lose 2 points per day until it hits zero. When it hits zero, your account will be reviewed, and it could potentially be terminated. This is why I think it would be important to take that extra affiliate vs. vendor refund rate parameter into account (and I’m confident we’ll see something like it).
When it gets closer and closer, you can always open up another account and point your affiliate links (for products with high refund rate) to that account to save your main account.
In short, don’t worry! If you are using legitimate promotional techniques, you’ll be fine, but just start with adapting your approach early (as in now).
After Jan 2nd, we’ll be able to see vendors’ refund rates and star rating, so it will make it easier to promote quality products and protect our affiliate account. Also, everyone starts with 100 points so if your account is in the “good” or “very good” ClickBank risk tiers, you’ll be earning +1 or +2 points per day. So the longer your account is in those positive categories, the more protected you become. For the “Moderate” risk tier, you don’t lose or gain any points.
Hope that helps you Tom, and thanks for your comment! Let me know how else I can help
Pingback: ClickBank Risk Tiers Update - Potential Account Termination No Longer Imminent? | Jeroen Waning
Hi,
I wonder if you have any idea of what this “sophisticated algorithm” is supposed to be, as far as I can make out they put more weight on larger refunds/chargebacks, so a $100 refund/chargeback is worse than a $10 refund/chargeback.
I find the secrecy a bit strange, and I know for a fact they recently updated the chargeback algorithm to go back further.
I think the reason they are waiting till jan 2nd is its a work in progress, they are seeing how many people can fix there accounts and they’ll want to create a balance between losing the worse affiliates/vendors and keeping as much profits as they can.
Phil
Hey Phil,
I couldn’t tell you the exact algorithm they use. You are right about $100 chargeback being worse than a $10 chargeback, but it also seems that it is all proportional to your total sales. The little guys are much more at risk of being subjected to higher fees as it only takes just a handful of refunds/chargebacks to set them back pretty far.
The algo is definitely a work in progress, and it all stems from the credit card companies putting a lot of pressure on them.
There are customers that get refunds before the banks had even had the chance to transfer the money. They have to transfer the money back, and this all incurs additional labor costs, etc.
Jeroen
My account has just dropped from green to yellow yet I have had no refunds. I think people are going to start looking for other affiliate networks to promote. If you check out the forums you will see that people are already abandoning clickbank by the thousands.
Yeah I have read the warrior forum. I think ClickBank is doing some experimentation and pressuring us to improve our refund rates because they are experiencing pressure from credit card companies, banks, and other payment processors. I’m just gonna stick with it for as long as I can and hope my account will turn around.