Affiliate marketing is done two ways. Having an affiliate marketing in house or working with affiliate marketing networks. No matter how you chose to do it, it is vital to make sure you have laid out the right infrastructure to not get conned by those affiliates who are in it for a quick buck via a dishonest way. Affiliate marketing usually measures conversions by dropping a cookie when the traffic an affiliate sends to your site, and then firing a pixel upon a successful submission of the action item.
Many unscrupulous affiliates have figured out how to drop a cookie and fire a pixel, and report a conversion even thought no real traffic was sent or a real conversion has happened. Their networks or your tracking tool shows that they have X number of converts and then you are obliged to pay for that traffic. To address this loophole it is prudent to design a quick system that issues a unique conversion identifier that your company issues and embeds in the conversion pixel when it fires. So when a blank pixel is fired, no unique conversion identifier is actually issued, and you don’t have to pay for that false conversion. All the affiliate or affiliate company has to do at the time of payout is give your company a list of unique conversion identifiers that you had issued to them for each legitimate conversion.
When we implemented this simple solution we were able to catch about 15% fraudulent conversions that our client would have had to pay for had not it been for our special setup. Give us a call and we will give you a quick run down on what needs to be done.