Recommended Refund Policy
There really is no one-size-fits-all when it comes to refund policies.
There are so many factors involved. The main one being, that Visa/Master/Amex/Paypal all give a buyer up to 60 days to ask for a refund, at least with most merchants.
Unless you’ve already negotiated the refund terms with your merchant account provider, and have both specifically agreed that there would be no refunds (like say, if you were selling an expensive item, like a car, or a boat, or a service), or that it’s only going to be a 30-day refund period, then you really have no control over the refund period. You just have to comply with at least the mandatory 60-day refund period required by the credit card companies.
So that brings us to the question:
How much should you set your refund period to be within DAP?
Now remember, it is this Refund Period setting (under Setup > Config > Advanced) that also makes affiliates eligible for payment.
So it really comes down to the question:
What is the waiting period for an affiliate to get paid for a referral?
Our recommendation: 60 days.
That’s because if you end up paying too soon (say like within 15 or 30 days), and then the buyer comes back and asks for a refund, now you’re out-of-pocket for the affiliate commissions that you have already paid on a purchase that you just refunded.
Now remember that when you do the actual refund within DAP, DAP will roll-back any commissions credited towards this purchase. If you have not yet paid your affiliates, then in the next report, it will ignore the refunded purchase, and will not calculate commissions on that purchase.
But if you have already paid your affiliates (like within 15 or 30 days after purchase), then DAP will include the negative commission in the next pay-period’s report. And any future commissions earned by this affiliate will be accordingly adjusted.
However, if the affiliate doesn’t refer any more members, then you have two choices at this point:
1) Ask the affiliate to pay back the over-paid commissions
2) Just swallow the loss, write it up to the cost of doing business, and move on.