Merchants Need to Monitor Affiliates and Distributers

Merchants jump through hoops to get underwritten for a Merchant account. Then once underwritten, Merchants can’t just start coasting. Now they’re shouldering the responsibility of compliance requirements and thresholds. 

As Merchants scale and begin working with a host of new partners, affiliates, and distributors, even more attention needs to be directed towards monitoring customer touchpoints. A lot of trust is put into partners, and it isn’t always their bottom-line that takes the hit when customer issues arise. Tracking payment trends and understanding their root causes can be the best way for staying healthy and profitable. 

Merchants spend time, money, and resources to start taking payments. It only takes one poor partnership to tank your compliance.

Let’s look at a couple of examples of why Merchants need to monitor their affiliates and distributers:

    1. FurnitureNow
      FurnitureNow is a Card-Not-Present (CNP) storefront that sells furniture. Furniture Merchants are high-risk, meaning stricter compliance around chargebacks and fraud. Let’s say that FurnitureNow decides to contract with a third-part delivery company, which can help cut a better deal than UPS and provide faster deliveries. Only problem is now FurnitureNow’s third-party is reaching out to customers for delivery and return windows, organizing drop off times, and communicating about customer concern issues.
      You can quickly see that there is increased exposure to risk. What if a couch is delivered to the wrong address? What if the third-party’s support staff is rude and hard to communicate with? Or what if FurnitureNow’s customer needs to change their delivery time-window? A large amount of trust endowed with a simple delivery service. And frustrated customers complaining to their credit card Issuer can lead to chargebacks and reputational harm. 


  1. FaceBox
    FaceBox is another CNP storefront that delivers a monthly box full of various cosmetic arrangements. The customer pays a monthly recurring bill for their beauty box subscription.  Recurring business models are another high-risk space that come with strict compliance thresholds. Now, let’s say that one of FaceBox’s lotion brands used a toxic mix that causes breakouts and irritation. It isn’t the lotion company’s seeing repercussions as subscribers call their bank to start a chargeback. In this case FaceBox needs to set up guard rails for the potential increase in disputes and subscription holds.  

You spend all this money and time to stay within compliance. Don’t let a rogue affiliate torch your bottom-line.

February 29, 2024

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