How to Identify Affiliate Fraud AttacksOur Top 5 Warning Signs That Suggest a Performance Marketing Scam is Underway
Keep Your Eyes Peeled for These Affiliate Fraud Red Flags
Affiliate fraudsters may attempt to hide their tracks, but they can never completely mask their presence. In fact, your own data may unveil some important clues.
From high spikes in traffic from suspicious geographies to a cluster of transactions from the same IP address, there are some recurring affiliate fraud red flags that can tip you off. I strongly suggest that you closely monitor your affiliate partners, and pay particular attention to these potential warning signs.
Affiliate Fraud
In this guide, we’ll take a closer look at affiliate fraud. We’ll examine common tactics used by fraudsters, talk about how it harms merchants, and explore how you can protect yourself from this type of scam.
#1 | An Increase in Chargebacks
A sudden spike in chargebacks linked to buyers referred by a specific affiliate is a major red flag.
It could indicate that an affiliate is drastically misrepresenting your products to drive sales. Then, when buyers receive a product that doesn’t live up to what was promised, they file chargebacks. Or, maybe your affiliate is using stolen cardholder information to make purchases and collect a commission. Then, when the legitimate cardholder sees these unauthorized charges, they file a chargeback.
Make sure to keep track of the number of chargebacks you receive each month. To get the best understanding of who your riskiest partners are, compare chargeback patterns, as well as your monthly chargeback rate broken out by transactions tied to each affiliate.
#2 | Traffic From Unusual Locations
If you suddenly see a surge of traffic from a country you don’t ship to or market in, this should raise concerns.
Suspicious traffic is a classic sign of click fraud. This is a form of affiliate fraud, where bots originating from servers in low-cost regions are used to generate fake traffic.
You can also cross-reference your traffic sources with your sales data. If a particular location sends you thousands of visitors but zero customers, then that traffic is likely the product of some form of traffic fraud.
#3 | Sky-High Conversion Rates
Don’t mistake an affiliate with a conversion rate that is dramatically higher than all your others as a top performer. While it’s true that they might just be that good… it’s at least as likely that they might be a sophisticated scammer.
An anomalously high conversion rate can be a sign that the affiliate is using tactics like URL hijacking or cookie stuffing to illegitimately take credit for sales they didn’t generate. This not only costs you commissions but also introduces noise into your marketing data, which creates ancillary problems.
If you have bad data, then you end up making suboptimal decisions about where to invest your budget. The result: a feedback loop of wasted resources and undetected fraud.
#4 | High Traffic, Low Conversions
On the other end of the spectrum, a notably low conversion rate can be a sign of scam activity, too.
If an affiliate sends a huge volume of traffic, but none of that traffic ever translated to conversions, that should be considered a tell-tale sign of bot activity, too. It’s true that this may not cost you direct commissions if you pay by sales, rather than by click. But, this fake traffic can still harm your business by overwhelming your servers, slowing down your site, and negatively impacting your organic rankings.
#5 | Suspicious IP Addresses
Pay attention to where your clicks are originating from. A high concentration of traffic from data centers, or from known VPN or proxy server providers, is almost never legitimate customer traffic.
This is a strong indicator that an affiliate is using bots designed to mimic user activity. If you come across any of these IP addresses, they should be flagged and blocked immediately.
