Update to ClickBank Refund Policy and Vendor Fees
October 13th, 2011
As part of our ongoing commitment to providing high quality products to consumers, ClickBank is adjusting certain fees relating to refund and chargeback rates for ClickBank vendors. These changes will affect a very small number of ClickBank vendors, and will not affect affiliates.
Starting October 17, 2011, vendor accounts with a refund rate over 15% and/or chargeback rate over 1% over the past 60 days may be subject to additional fees or penalties. Refunds and chargebacks negatively affect everyone, including customers, affiliates, vendors and ClickBank, so it is important that we all work together to keep refunds as low as possible.
For vendors over the 15% refund rate threshold, ClickBank may opt to retain our transaction processing fee on any subsequent refunds, rather than returning the processing fee to the vendor as we do now. Vendors with refund rates significantly higher than the 15% threshold may also be subject to additional processing fees on refunds and additional penalties including removal from the Marketplace or account termination. Vendors with chargeback rates over 1% may be subject to additional fees on subsequent chargebacks.
As stated earlier, this change will impact a very small number of ClickBank vendors, and will not affect affiliates.
To support vendors in lowering their refund rates, we are adding a clear indicator of the vendor’s current 60-day refund rate to the Account Home page so vendors can easily track their refund rate and take action if necessary.
As we begin to implement this new policy in the coming weeks, ClickBank will contact affected vendors individually before any additional fees are applied to their accounts, and will attempt to work with these vendors to lower their refund rates whenever possible.
We are committed to supporting our clients and end customers, and these changes are part of our commitment to keeping affiliate marketing profitable and sustainable for years to come.
About Beau BlackwellBeau is the Client Knowledge Guru for ClickBank and covers the latest trends, tips and techniques for building profitable Internet marketing businesses.
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I guess I’m not completely surprised that some people have refund rates as high at 15%, however I think this is a good policy as typically if that’s the case changes should be made to either the product or the marketing material. Good call ClickBank!
Great – it irritates the fire out of me when I promote a product with high gravity, great pitch page and a lot of buzz only to see it get 50% refunds. Or nail that big $100+ upsell only to see 80% request refund. Granted this is a small percentage of merchants but more big names than one might imagine. I want to see the clickbank marketplace stay sustainable lest we end up with the FTC coming in and ruining everything over a few bad apples.
It’s a great call that, as an affiliate for a lot of clickbank products it’s becoming as important to check out the vendors reputation as well as the product quality these days.
Most recently so may are over promising and under delivering, making the clickbank market place somewhere that I certainly tend not to visit as often as I did a few years ago.
Very good! I really hate, that almost on every internet marketing product I promote as an affiliate, I get an 50% (or higher!) refund rate.
What is the reason of this high refund rate? The reason is that the salespages are toooooo good, but the products are just “Directory submitters” or tutorials which teach the same things that everybody already knows (because it’s on another thousand websites – for free).
Are you going to be updating your refund policy and how people get refunds as well, because that’s the real problem. It doesn’t matter how good a product is because people take advantage of your system which is why refund rates are so high. The same product, sales page and sales flow on another platform typically has 70 – 90% lower refund rates than it does on CB.
To be fair – I think this is a joke.
People absolutely abuse Clickbank for the refund policy. I’m in a high refund niche.. nothing to do with me, or my products, or my service, or my customer support.. But it’s down to the SIMPLE fact people know they can grab stuff for FREE.
More and more vendors have moved away from Clickbank in the past 6 months, and I can see even more moving after reading this ‘news’.
If you want to ‘protect’ customers and vendors, then give the vendors the power to lower refund rates. Changing a ticket to tech support is NOT enough. People who buy at 12:01 and refund at 12:05 should NOT be allowed to purchase. I rather see less sales than see 1000 sales and get 500 refunded because they know they can ABUSE the ‘Clickbank way’.
Create good products that people want and need and nothing else matters.
What are you planning to do to the OTHER half of the equation? The serial refunders! Are you planning any punishment for them?
Er…I don’t really I agree with this. In my niche I see a lot of people taking advantage of the refund policy. I know my ebook is high quality and over 100 pages long, but people buy the guide and request a refund literally 2 minutes later. This is causing me to have a refund rate hovering around 15%. I understand clickbank is pushing for higher quality products, but they don’t take into account how people abuse the refund policy.
I think you guys are making a serious mistake with this new policy. Sure this will make you more profitable for a month or two, but whoever you guys sell your company to will be in charge of a sinking ship.
This is going to alienate certain niche vendors who basically fuel your entire market place.
You won’t see the effects immediately, but I’m 99% certain that if this policy is enforced, within 6 months your growth will flat line. It’ll be downhill from there once another network wises up and starts pulling in your vendors by offering them a more reasonable deal.
I love your company – you guys have done a lot for me which is why I’m expressing my opinion here. IMO, short term you might make a few extra bucks, but long term your network is going to bleed its’ lifeblood as vendors help build up a competing network
Why doesn’t Clickbank give the publisher the right to decide how long the time is for refunds and returns? 60-days is way beyond any other industry standard, and to dictate a double or triple amount of time for refunds, and then penalize people for having refunds is not really fair. How about giving us, the publishers, control over the length of time to offer returns? It’s part of the sales cycle isn’t it? Why do you feel like you need to mandate that; especially in a market such as the one Clickbank specializes, electronically delivered only products. People watch our videos, listen to our expert recordings, read our eBooks, totally consume our high quality, excellent information, and training, then two months later are still given the right to ask for their money back…why 60 days? I think Clickbank has brought this problem of high returns on themselves, by mandating such a model, and now you want to penalize those of us who are making you rich, us the publishers, by penalizing us for your own poor business model. The only way this is fair, is to allow the publisher to dictate their own return policy.
Good call,
There is so much BS out there, the good IM’rs will thank you. Good call but make sure you enforce it.
B Bop
Thom McFadden
“To support vendors in lowering their refund rates, we are adding a clear indicator of the vendor’s current 60-day refund rate to the Account Home page so vendors can easily track their refund rate and take action if necessary.”
This is a fantastic idea!
When is this actually going to show up on the “Account Home” page?
The reason I ask is because I’m looking there now, and unless I’m missing where it’s located, can’t seem to find it.
Any help locating this CRITICAL bit of information is HIGHLY appreciated, thanks!
Excellent. This will help improve and maintain quality of products offered. Preserving Clickbank brand can only be good for all of us – “A rising tide raises all the boats.” Thanks.
Cheers, Thea
As the economy worsens… we will all see more and more refunds as people struggle to make ends meet. I agree with the 2 comments above. We all need to streamline and work harder to produce great things.
I think it’s a good idea so there’s less of those one page salesletters that sell how to get rich in 3 days.
I know there has been big changes in the internet marketing world this year due to excess online spam and the amount of people now wanting to make money online due to the global economic climate, but 15% is not a good cut off point for vendors, especially when there’s an over generous 60 day no quibble money back guarantee from Clickbank which is open to abuse.
One of my horse racing products which was highly rated and approved by four authority betting review sites had a refund rate of approximately 17%! This new rule will drive people away, so unless CB reduce the refund rate to 30 days or increase the cut off to 20%, I will unfortunately be looking for another payment gateway.
A good product can have even 90% refund rate in a 60 day period. Let me explain. For example, the marketer makes an e-mail blast, or JV promotion, or one of his affiliates can do this, and he has for example 1000 sales within one week, let’s say this is the first week. The 5% of the refunds can come in the last days of the 60-day money back guarantee. This is the 9th week. This 9th week is at the beginning of another 60-day period when the marketer does not have big promotions and he makes only 100 sales. 50 refunds of 100 sales is 50% refund rate. I have seen Clickbank accounts from my partners that have negative paychecks after the big promotion, just because extraordinary sales count also creates extraordinary refund count which often occur in the last days of the money back guarantee. This is why it is not a good idea to penalize vendors.
Once again no notice given to vendors on this change, If you think IM/Forex/Betting products are going to be lower than 15% I can’t see it, although you are going to probably double your profits in these niches, so Clickbank wins anyway, but I’m not sure the customer does.
A lot of refunds may be because of poor quality products, but there are many other reasons beyond the vendors control. I am positive there are many great product with over 15% refunds.
A 20% policy would be fairer, and also for small vendors, they can easily go over 15%, so you’re going to hurt them.
One thing you could do to help Vendors is block Duplicate purchases, although since your now profiting on refunds, you probably wont.
Another thing is to block serial refunders more quickly, have a 3 strike policy.
And also if the refunder had to give a clear reason for refund, rather than select from a drop down box vendors could know exactly were they are going wrong and could also prevent refunds for lame reasons such as “I didn’t receive my product” when it is almost always the customers fault in this instance, due to following the download instructions incorrectly.
Phil
A policy for vendors to make better products, fair enough…
Your company encourages easy refunding…
I think it’s odd your going to penalize the people who make you money just because people abuse your companies flawed policy.
Because 15% isn’t that high
My vendor account’s pretty small, but I looked through my affiliate account out of curiosity. I’m just glad more people don’t use AMEX.
Is there going to be an appeal process? I know some vendors are worried about high refund rates (for example, if they happen to have a product that is more attractive to serial refunders than average). I like the guidelines from a quality management perspective, but there are still going to be honest people caught in the cross-hairs because of lack of control of the masses.
1) What is the overall average refund rate?
2) What is the average refund rates on products that seem to have the serial-refunder plague? (and if these are still somewhat “good” products, will they be categorized any differently to give such vendors a little bit more lee-way?)
I don’t know if there are any meaningful ways to extrapolate such data, but I believe it would be helpful to have some perspective on the otherwise-arbitrary 15%.
Thanks,
James, Ashley, Craig and others,
Thanks for your feedback on the policy updates. Just so you know, ClickBank does actively track and ban serial refunders on a daily basis. As part of our ongoing support of both customers and clients, we’re planning to increase scrutiny even more on abusive refunds, and to introduce new tools to help vendors improve their traffic and customer quality. We created a blog post about it here:
http://www.clickbank.com/blog/2011/10/20/clickbank-refund-policy-and-consumer-refunds/
Thanks,
Beau
Simone,
The 15% refund threshold only applies to high-volume vendors, so you’ll only see the refund rate displayed in your account if you’ve made enough sales in the past 60 days to meet that threshold. Vendors who don’t have a minimum number of sales in that time period won’t be subject to fees/penalties, as we understand that refund rates can be easily skewed on lower sales volumes.
Thanks,
Beau
Just one thing to add, a customer wanting for a refund directly through Clickbank within one day or even a few minutes (!) after purchase is a shameless abuser. If he is not penalized, he will do it again and also inspire others on social networks. This is how an army of Clickbank refunders has grown and still will grow. This has nothing to do with the quality of the products. If they can get quality products without paying for them, they WILL do it. They don’t feel they have to pay for it, just as they don’t pay for their operating system, software, mp3s and movies.
I am absolutely stunned!
15% refund rate seems exceptionally *low* to me – i know from experience that many people are “professional serial refunders” and are abusing the system to the max – particular in the IM niche!
CB is known for their lenient and easy refunds and is encouraging “no questions asked refunds” everywhere – and many not so honest people know that.
Now you are punishing the VENDORS for this policy? I can guarantee you that even with a high quality product there will always be refunds – and now vendors are paying for the not so honest serial refunders?
This has been a long time coming (wish it had been implemented a year ago) as there is no excuse for vendors having 40%, 50% refund rates or higher. I’ve heard some affiliates say they saw refunds of 60% or higher even on some promos – that is pathetic and a direct reflection on what that vendor is selling. So this will for sure help weed out those types of vendors who are basically ripping off consumers.
However, since it is really easy for customers to refund with CB…another thing I’d like to see is the ability to BAN cronic refunders from ever purchasing your product. I’m sure CB could weed out cronic refunders on your end as well. Removing customers who just buy and refund within minutes or hours repeatedly should not be allowed to buy products then refund and hurt vendors refund rate %.
I don’t have a problem with the 60 day refund policy – let’s face it the dishonest purchaser would apply for a refund whatever limit was set.
As an affiliate I’d like to see Vendor Refund Rates. It would help a lot in deciding which products to promote, as in products with no up sell it’s the only indicator of public feedback about the product itself (all other CB metrics are about the quality of the sales pitch). It would be especially helpful in niches where there are a few competing CB products. If I’m going to spend time and effort building a quality niche site and SEOing it my long term interests are in protecting the reputation of my site by promoting only quality products, which means I’d value lower refund rates over higher commissions (to an extent). So making Refund Rates available to affiliates would encourage higher quality CB affiliate sites and higher quality vendor products, thus enhancing CB’s own image. Everyone wins (except the vendors of scam products).
I think the fees should be imposed on the Customer, not the Vendor, it will prevent the customer from abusing the refund policy here.
That’s the only way the refund policy wont be abused since it will come out of the overall refunded amount to the customer.
To impose a fee on the vendor is not fair… I’m a vendor and I do what ever I possibly can to help my customers to reduce refund rates, and those who have refunded were confused, didn’t want any support etc and gave up. that’s the tendency with most ppl why they ask for refunds.
I think the vendors should be able to have a clause in their TOS to state that any refunds made will be deducted from the overall refund to the customer, so a $60.00 product if refunded on, customer will get $2.50 deducted (or what ever the refund fee is) for a $57.50 sent back to them.
So clickbank, as a vendor here, I think you should listen to us, and not do what you think is best, you are not the vendor here…
just like what Georg above says and as MG says and several others here who say the same thing, don’t let the vendors here fall victim to the serial refunders.
ensure the customer has the fee deducted from their refund, and or, force them to make an account with clickbank and credit their account with the refund fee and they can use this to go towards another product.
I think Clickbank should make it visible to affiliates as well what the refund rates are for each vendor. This will assist affiliates in making decisions regarding which vendor’s products that they will promote. There is nothing more deflating to an affiliate than making a large sale, only to have it taken back from them a month later with a refund, that was no fault of their own.
I’ve seen this sort of thing happen so many times in the past. In order to punish the dishonest, the honest get roped in with new rules.
I sell a high quality course on instalments. I offer a large discount if purchased in full after the initial instalment is paid. As many purchasers are happy with the course, they purchase the full version to get the discount. I then sometimes have to issue a refund on their previous instalment payment.
A refund, is in effect endorsing my course as high quality and of value, but it looks like I will be punished alongside the scam merchants who use ClickBank.
Ah well, that’s life and I do applaud ClickBank for their efforts.
I’m excited to find out I have a refund rate of 1.34! Can’t get much better than that. That is particularly good for my niche – start a cleaning business. I’m glad to see clickbank cleaning up shop, there is some real crap allowed through, but hopefully that is changing. If you are getting a refund rate of higher than 15% then something is wrong.
I personally don’t know why people call them serial refunders. I asked for refunded within 1 day in many cases. I noticed this was the case with IM products, one page salesletter promising millions of $ with a push button software – only to purchase and find out it’s affiliate marketing and have to write tons of articles. This means they have a poor salesletter that does not convey what the product is all about.
So I don’t blame serial refunders, I more believe they have a real reason to refund within a day. Some salesletters and more importantly products in IM are really bad, and if you put them one next to the other you can’t tell they’re different salesletter cuz they’re all the same: “Make million push button”
So Clickbank will reduce junk products and will force vendors to improve their copywriting skills so customers know what they’re buying.
This “rule” was only expected from my part seeing all those IM fake scams, useless products promising millions, and so on… I’ve seen a lot of these and have bought many just to see what the product is all about and then I had to refund usually within 1 day.
If refund scammers were the problem, then every (or most) vendors would have the same high refund rates. The reality is that a quality product, combined with a properly informative sales letter, will result in lower refund rates.
“Refund scammers” and “serial refunders” are not synonymous. While a “serial refunder” COULD also be a “refund scammer”, the vast majority of serial refunders are just shoppers who are looking for products that are worth the money they’re willing to pay – and since there is no other way to find out (beyond the sales letter), they have no choice but to buy the product, evaluate it, and THEN decide whether it was worth the price.
There should be higher penalties for those vendors whose product is so bad that the shopper returns it within the first 24 hours! Stop blaming the scammers – while they a fact of life, they are also no respecter of vendors – and therefore not the real problem.
Ref. Jim Graham
I’m going to ask you to take the key out of your back and think logically. I am both a vendor and affiliate and enjoy both of the sides of he market to a point, but there are drawbacks with Clickbank like most other companies in the marketplace.
How would you honestly feel if for example more than one customer had purchased your product through Clickbank and then received your support and guidance for 40 to 50 days and then turned round and got a no quibble refund? Well let me tell you that has happened to me on three occasions now and it is really sickening, not the money but that you’ve been used.
Clickbank is not a great place for a seller and whilst I always agree on content quality and a good price point the 60 day NO QUIBBLE guarantee is excessive and now they’re thinking about punishing the people who helped build their business in having a refund % criteria – RIDICULOUS!
YF
Mark Boyle
I have to agree with you Jim! I believe that if the product is as good as they say they are there would be no returns! You made a very good point when you said “shoppers who are looking for products that are worth the money they’re willing to pay – and since there is no other way to find out (beyond the sales letter), they have no choice but to buy the product, evaluate it, and THEN decide whether it was worth the price”. They don’t know what they are getting and once they receive the product and are not happy with it, they have every right to return it!
One time I was analyzing the refunders (a little googling, you can try it) and I have found that most of them are also vendors of the same business/niche. They are obviously not interested in the product as users, they just want to explore what does the competition offer and how they deal with the refunds. They obviously want to explore as much products as possible and it costs money so they refund it. A few of the refunders have copied my product, or made a similar product. A few sold my product illegally on e-bay. Or posted it on some forum (my ebooks have hidden tracks so I know which customer is sharing). Just to know who are these serial refunders… Could you stop them with quality products? I guess no.
There will always be refunds since there will always be individuals out there trying to work the system. It’s a shame the vendors are now having to pay but I suppose it’s the same old story about 1 bad apple.
I wonder how much it would affect sales if Clickbank had an “All sales final” policy and did not offer refunds with just a click of a button and no questions asked. But the fact of the matter is that they can’t do that, because they know that the vendors are not being honest in the representation of what their product will actually do….even if they aren’t blatantly lying about it (which in some cases I’m sure that they are). If their product was so good and would produce even half the results that they claim it will, they wouldn’t be selling it for $37 or $49 or whatever price their careful split testing tells them will make buyers open their wallets.
Here is my input on this matter, All of the ones I have tried, I have many comments on.
1. They only tell you enough to get you in and then spring oh by the way in order to go father, you must get an URL or our own domain. more money out of pocket. Not one that I have gotten, has given you all the expensive out, Not one has gotten you to a point of making any money to put back into the program to up grade to make it better.
Also, when you are limited to money to start with, and they want upgrades and then down grades, How about someone having a program that teaches us to make money so we have money to do the upgrades. I lose interest in trying after getting to the point I have to put out more money in order to get to any starting point.
I totally agree with Stephanie, I have found that even in some cases they say there is no out of pocket expense, so you either read or listen to a very long advert/video only to find that yes you do have to give them money and not only that but some want you to agree to a large monthly payment which is not a good thing to agree to when you have never made any money because if you do agree to their terms and you still make nothing, what are you expected to pay them with? you will be worse off than if you never bothered in the first place!