Instant Affiliate Payments
There are some scripts out there that will allow you to “pay affiliates instantly”.
What this essentially means, is that the “seller email” in your Paypal button, is actually replaced with your affiliate’s Paypal email id. Which means the payment from your buyer is going straight into your affiliate’s Paypal account, not yours.
This means that when your buyer looks at her Paypal account, it does not say payment made to you “John Seller” (you), but to “Joe Affiliate” (your affiliate).
This is a poor business practice on so many levels.
1) Customer bought a product from you. Why is her Paypal account showing that she just made a payment of $97 to “Joe Affiliate”? Your customer is thinking, “Wait a minute… Who the heck is Joe Affiliate? I did not buy anything from any Joe Affiliate. Why is my Paypal account showing that I paid him money? HELP!… Fraud… Paypal Dispute… Scammer… I want a REFUND!”. Well, that’s what we would think too if we bought something from one merchant, and saw the payment going to someone else.
2) What happens when your customer wants a refund? Now you’re going to have to ask Joe Affiliate to return the payment, because you never got it – he did. What if Joe Affiliate doesn’t respond on time? What if he doesn’t return the money on time? What if he doesn’t want to return it at all? Will you hold up your customer’s refund, or are you going to keep paying out of your pocket and “hope” that Joe Affiliate returns your payment to you this time, and not to the buyer, because you have already send the buyer their money back?
So yes, this is just bad for business. Not to forget, looks extremely unprofessional on your part too.
The only way to properly handle instant payments, is by using Paypal’s Adaptive Payments technology, which allows you to do something called “Chained Payments”. And using Chained Payments, your customer always pays YOU first. And you can set up a chain, so that as soon as their payment hits your Paypal account, Paypal in turn will instantly send a money from YOUR account to your AFFILIATE’s account. So Customer pays you, you pay the affiliate. And that’s how it should be.
Anything else will only get you in trouble with Paypal, maybe even get your account banned, piss your customers off, dilute your brand, your reputation may get trashed, and just about everything that is not good for your business could happen.
Now DAP does allow you to instantly ‘credit’ your affiliate’s account with the payment due, but you still have to push a couple of buttons before the affiliate can actually get paid.
And that’s how it’s going to be until we develop support for Paypal Adaptive Payments (which has its own complications, by the way).
What is your take on this? Feel free to leave your comments below.