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How to Kill an Affiliate Program

They may not be trying to intentionally kill their affiliate program but announcing the intent to steal affiliate commissions may just accomplish that. Earlier this week, Art.com and AllPosters.com announced a change to their affiliate agreement. Under the new agreement, if you earn under $20 in a year you will forfeit your commissions. Commissions will not rollover to the next year, they will be lost.Their year runs from June 1 to May 31.

Excerpt from the copy of the email sent to their Affiliates posted in a thread at Abestweb (see thread at ABW for the complete email):

Effective today, we are introducing a change to our program that affects how commissions are earned and paid. Please review the information below.

These changes are being introduced as part of an effort to simplify our internal operations. The net result of these changes will be to reduce our operations requirements with respect to inactive affiliates. The benefits to our active affiliates will include improved reporting and a greater ability to respond to your needs.

We believe these changes will have minimal impact to our active affiliates. For further details, please see the new version of the program Operations Agreement, which was posted today.

In addition to the commission-related changes described above and in the FAQs below, we are also harmonizing our Art.com and AllPosters.com programs. To support this effort, a change was made to the Art.com Operations Agreement with regard to the 10-day cookie. While the 10-day cookie is still supported, the program will now include a last-cookie principle. This means that we will credit a sale to a different affiliate or to an Art.com sales channel if the visitor clicks through a Special Link from such other affiliate’s website or advertisement after such visitor clicks through a Special Link on your website.

 Q: What is being changed?

A: We are implementing a minimum annual sales requirement. For any given program year, no commission will be earned or paid unless and until you have achieved at least 20 commission credits. And, for affiliates that do not generate at least 20 commission credits in a program year, any commission credits existing in their account will be deleted from their account.

 Under these new terms, if you earn $19 in a year you will not get paid and you will lose your earnings. 

Although they say that the changes will only “minimally affect” active affiliates, active affiliates should be aware and cautious in their acceptance of this new agreement. Every Affiliate should read the complete Operating Agreement before deciding to accept new terms. If you continue in the program you are accepting the terms.

If you are not a big producer and are concerned that you will not reach the $20 a year commission threshold you can receive all commissions earned by terminating your account.

Q: What can I do if I do not wish to continue in the program?

A: If you do not wish to continue in the program, you may terminate your account by emailing (email removed) or (email removed). If you terminate your account by May 30, 2010, we will issue to you a commission payment equal to the commission credits in your account regardless of the amount of commission credits in your account. For example, even if you have only 6 commission credits in your account and would not otherwise receive a payout under the program rules, we will issue you a payment for $6 if you terminate your account by May 30, 2010.

Every Affiliate needs to set their own criteria and minimum standards for merchants and programs they promote. Decide whether the new terms offered by these programs meets your own criteria and make a business decision whether or not to continue to promote AllPosters and Art.com. I am not a member of either program but if I were, I would be closing my account, regardless of my earnings. For me, this is an unacceptable policy.

Although they are being open about the new terms, this new agreement is an example of bad merchant practice. It is one thing to set a minimum payout threshold, it is another to set a minimum earnings threshold. A merchant stealing affiliate commissions, with or without permission, is not good merchant practice.

If  merchant wants to set a standard for Affiliate performance there are other ways to achieve it. While I do not agree with it, a merchant can adopt the “get active or you will be removed” policy. Some merchants will do this to streamline their Affiliate managements or to “motivate” Affiliates.

Merchants, if you are looking for better ways to improve your Affiliate program and motivate Affiliates, consider adopting good merchant practices. Provide Affiliates with the tools they need, offer assistance and offer positive reinforcement. Achievable bonuses and commission perks will attract and motivate Affiliates more than threats and stolen commissions.

Remember, tomorrow’s super Affiliate comes from today’s small, or even non producing, Affiliate.

{ 12 comments… add one }

  • Geno Prussakov March 20, 2010, 9:11 am

    Wow… What a policy… Makes a perfect case study on how not to manage your affiliate program.

    Do you think they’ve come up with this thinking it’ll actually motivate affiliates to become better producers?

  • Daniel M. Clark March 20, 2010, 9:17 am

    I was amazed when I got that email, and I posted it at ABW with the hope that I was somehow reading it wrong and that a merchant wasn’t actually planning on blatantly stealing commissions. The overwhelming consensus is that my reading comprehension is just fine and that art.com and allposters.com really are planning on stealing from their low-earning affiliates! What a sad state of affairs… talk about a malicious merchant. I don’t think you can even chalk it up to an incompetent or clueless manager, this is just downright malicious.

  • Melanie March 20, 2010, 9:36 am

    Thanks Geno, good to know that an outsourced program manager also feels this is poor practice. Maybe they didn’t intend to motivate Affiliates but wanted to reduce their program by making it unappealing?

    Thanks Daniel, I appreciate you bringing it to everyone’s attention. I agree, not incompetence but intentional act. I was shocked to learn that a merchant would be so blatant in their disregard for smaller Affiliates.

    There are more dignified ways to restrict a program to only “super affiliates”.

  • Vinny O'Hare March 20, 2010, 9:43 am

    It doesn’t sound legal to do, they better check with their lawyers before they put this in place.

  • Rob Cox March 22, 2010, 8:19 am

    Mel,

    horrible practice! I would also bail on this program if I was an affiliate. And if this IS an effort to motivate low performers, well … I agree that positive reinforcement should net them better results. And what is the harm really in having some low performers? I don’t see the point in removing them – and definately disagree with commission reversal if a performance threshold is not reached!

  • Silver March 30, 2010, 11:04 pm

    Of course everybody missed the most important part and makes this new policy change near laughable for such a company to so openly admit their marketing sins. Allposters.com and Art.com STEAL from their affiliates hard work. The amount of self-promotion they make with their own affiliate links on their websites and newsletters will most likely make 90% of any honest affiliate referred traffic be credited to those so-called “Sales channel”. This is as lame as it gets as they don’t just steal from low earning affiliates but from the supers as well. This company seriously needs to wake up and support their affiliates more or it will soon be their downfall.

  • Bobcat March 31, 2010, 3:35 pm

    I can understand that they may want to slim down their operation and focus on performers (20:80 etc) but this is so clumsy. Just pay out the commissions this one time, then impose the $20 minimum, if they must, on those who are informed in advance. To say to affiliates that the have been dumped ‘and by the way, we’re keeping your cash too!’, that just reckless and cheap. This company had a $140 Million+ turnover in 2009.

  • Bobcat March 31, 2010, 3:50 pm

    Silver, I agree with you entirely, do you think these sale channels include confirmation emails?? I do, infact i believe that has been the case for a while; cookies overwritten by new ones in the confirmation emails. How do you like that? See for yourself by doing a test. I think that is what is meant by ‘sales channels’. I believe that they only recently decided to legitimise this established practice by including it in the terms.

  • Melanie March 31, 2010, 7:28 pm

    Hi Vinny, I am sure they did clear it with their lawyers. Probably legal because you actually earn “credits” that you redeem for money. In my opinion, notacceptable for a n “Affiliate Program”.

    Thanks Rob, good to see that a merchant also thinks this is poor practice. Positive actions would net them greater rewards. I don’t even think they said they would terminate low producers, just that the commissions would be forfeited.

  • Melanie March 31, 2010, 7:40 pm

    Thanks for stopping by Silver. I agree that overwriting the cookies is 100% wrong as well. Unfortunately, this happens. Some merchants will link to a sister store ( a partner store). If a customer who had arrived at the original merchant site via an affiliate link, clicks on that partner store link and then clicks back to return to the original merchant site, the affiliate cookie gets overridden.

    This leak can be fixed without sacrificing the affiliate cookie. Some merchants are very receptive when they learn that it is a leak, that affiliates lose out. These receptive merchants take the necessary steps to correct the problem when they learn about it.

    Several months ago I contacted a merchant about the links on their website to their sister stores. When I told them it was a negative because affiliates lose commission. Their response? They fixed it and linked the stores affiliate programs. Took less than 48 hours for them to implement the fix.

    Yes, there are other merchants who override with their newsletters but many do not.

    As Affiliates we need to set our standards and find merchants who meet those standards. We should never settle, there are always better programs to choose from.

  • Melanie March 31, 2010, 7:50 pm

    Thanks Bobcat.

    There are many concerns with this new “agreement”. Their acknowledgement that they may override Affiliate cookies with other channels should be unacceptable to Affiliates. Unfortunately, some may feel they have no choice but they do – seek out merchants who value the Affiliate.

    Some super- affiliates may be able to get a special deal to compensate but what guarantee is there that other unethical practices won’t steal more?

    Stealing commissions is wrong, whether it is done with the Affiliate’s knowledge or not.

    Affiliates need to decide if they will accept this practice or not.

    My standards are higher.

  • Jen Knox April 17, 2010, 12:46 am

    Chalk this up as another “Stupid Affiliate Management Trick” like random deactivation for “inactivity”, overly strict program acceptance rules and the obscene minimum payout threshold.

    I’ve been an affiliate marketer for 12 years (practically since the affliate program as we know it has existed) and these “tricks” will, hopefully separate the wheat from the chaff program-wise. Redirect those links to their stiffest competition, people! ;) Vote with your links, cash out and move on.

    Motivation comes from pushing people TOWARD a goal, not from fear of falling short. We affiliates have nearly limitless companies we can promote. Affiliate managers need to get with the program and realize we can be their strongest asset, or from a competition standpoint, their worst enemy.

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