When John Murphy, affiliate marketing expert and owner of The Cold Plunge Store, noticed an odd traffic pattern in his Shopify Analytics report, he suspected fraud. “This new affiliate started sending a ton of traffic out of nowhere,” he says. “It looked like I was using some weird tactics to get people on my website.” John visited the referring affiliate link and found evidence of redirect fraud, so he removed the affiliate from the program to prevent additional losses and damage to his business’s reputation.
Affiliate marketing is popular with businesses and individual creators: For creators, it’s a straightforward way to earn money online; for businesses, it’s a versatile and low-risk approach to online marketing. Experts predict the affiliate marketing industry will reach nearly $40 million by 2028.
But John isn’t alone in his experience with affiliate fraud: Industry data indicates a significant fraud issue—nearly 20% of all affiliate traffic is fraudulent, costing the industry billions annually.
Here’s how fraudsters work, how to spot them, and seven tips to help you prevent affiliate fraud from affecting your online business.
What is affiliate abuse?
Affiliate abuse (or affiliate fraud) occurs when an affiliate marketer employs deceptive or prohibited tactics to boost their earnings from an affiliate marketing program, a digital marketing partnership between a business and one or more individual creators (or “affiliates”).
Ideally, affiliate incomedepends on performance: Affiliates promote a business’s products or services and earn a commission based on specific customer behaviors resulting from their efforts. Affiliate abuse undermines this system by using fraudulent tactics to generate false leads and sales, harming the business’s reputation and financial health.
Common types of affiliate fraud
Affiliate fraud comes in many forms. It can include criminal activities, scams, and legal promotional tactics that violate the terms of your affiliate agreement. Keep an eye out for these six common types:
Click stuffing
Click stuffing (or click fraud) is an affiliate marketing scam that exploits pay-per-click compensation models. Abusive affiliates use bots to artificially increase the number of clicks to their affiliate link, and you, the business, pay the affiliate a commission for each fake click.
Digital ad fraud
Ad fraud occurs when an affiliate violates your affiliate agreement’s paid ad policy, which specifies whether affiliates can run specific types of paid ads. Many affiliate programs prohibit the use of paid ads—and those that allow ads typically limit the types of ads an affiliate can run. Search engine advertising is often off the table, for example, because an affiliate’s ad might appear before a company’s site on the search engine results page (SERP).
Ad fraud can drive up your advertising costs by forcing you to compete with your own affiliates for ad space. Paid search violations can be particularly damaging if an affiliate bids on brand-specific keywords for the ads (like your company name), which can divert otherwise organic traffic through the affiliate’s links.
Fake leads
Fraudulent affiliates can also use software to generate fake leads or false or stolen information, simulate newsletter signups, site visits, contact form submissions, or come up with any other behaviors that factor into your lead qualification system. Fake leads drive up your affiliate marketing costs, degrade the quality of your lead database, and harm your reputation.
Purchase fraud
Many affiliate offers include sales commissions, which compensate affiliates for purchases resulting from their activities. Some scammers use fraudulent purchases to boost their earnings. Purchase fraud can raise your affiliate marketing and fulfillment costs and cause reputational damage. Common tactics include placing orders with stolen credit card information and purchasing and returning large amounts of inventory.
Redirect fraud
Redirect fraud occurs when an affiliate purchases a domain name (URL), installs a script that forwards all visitors to your company’s website, and credits their own affiliate link as the traffic source, diverting traffic and commissions away from legitimate affiliates to themselves.
Some affiliates engage in “typosquatting,” or buying URLs similar to yours (for example, one with a slight misspelling). When users accidentally visit these domains, they are redirected to your actual site through the affiliate’s link. This allows the affiliate to earn commissions as if they had legitimately referred the users.
Others use redirect scripts on hidden or misleading links, driving low-value traffic from uninterested users.
Cookie stuffing
Some affiliates use a technique called cookie stuffing to falsify sales attribution. When a user visits a fraudulent affiliate’s website, the site attaches a cookie to the user’s browser that attributes any future purchases from your company to that affiliate. If the user makes a purchase later, your affiliate marketing system will indicate that you owe the affiliate a commission, even if the sale did not result from the affiliate’s efforts.
Tips to prevent affiliate abuse
- Clarify your expectations
- Screen affiliate program applicants
- Join affiliate networks
- Review website traffic
- Monitor affiliate activities regularly
- Use device fingerprinting
- Penalize fraudulent activities
Affiliate scams are unfortunately common—but there are a number of ways to reduce your risk. Here are seven tips to help you prevent affiliate marketing fraud:
Clarify your expectations
An affiliate program agreement is a legal document establishing the relationship between an affiliate marketer and a business. It supports affiliate compliance by helping honest affiliates understand your program and deterring potential scammers.
Include information about prohibited promotional methods, such as running paid ads, posting affiliate links to coupon sites, or sending unsolicited emails. You can also outline the consequences for violating affiliate terms to deter fraud and support potential legal actions.
Screen affiliate program applicants
A thorough screening progress can deter fraudsters and help you recruit the best affiliates for your business.
Legitimate affiliates generate traffic by building authority in specific niches, so review each affiliate’s site and social media, and prioritize those with high-quality, focused content. While your research can’t prove whether the affiliate engages in unethical practices, it can reduce fraud risk by engaging affiliates capable of generating legitimate business.
Watch out for red flags, like low-quality content or recently created social media accounts. Spammy or low-quality content can damage your brand reputation, and a limited online presence may indicate a lack of experience, authority, or even a fake identity.
Join affiliate networks
Reduce your risk by joining an affiliate network, which connects marketers with brands. These networks help recruit and manage affiliate partners. Most pre-screen affiliate marketers before admitting them to the network, and many offer fraud detection and support services. Shopify Collabs, ShareASale, and CJ Affiliate are three popular options.
Review website traffic
Use Google Analytics (or your website analytics provider of choice) to uncover fraud. Review referring URLs to identify prohibited sources or paid traffic, and investigate any unusual spikes in activity, especially if they’re from unfamiliar sources or regions where your products aren’t typically popular.
Monitor affiliate activities regularly
Use affiliate management software to track traffic volumes, earnings, and conversions by affiliate account, and investigate any sudden changes or inexplicably high or low numbers. A particularly high conversion rate can indicate fraudulent purchases, for example, and a very low one might point to click-farming.
Look for an affiliate management system that offers built-in fraud detection software. Some systems automatically run reports and flag suspicious activity, which can save you time and make it easier to keep tabs on a large number of affiliate relationships.
Use device fingerprinting
Device fingerprinting generates a unique ID for a user’s computer by combining information from their operating system, web browser, and IP address. This technology can help identify duplicate accounts and detect affiliates using software to simulate customer behavior.
Penalize fraudulent activities
If you uncover fraud, take action right away to prevent additional losses and signal your commitment to enforcing your agreement to other affiliates. You might ban the affiliate from your program or even report them to authorities if the fraud involves stolen credit card information, for example.
You don’t necessarily need a lawyer, but consult one if you have concerns about retaliation, are considering legal action, or have contract questions about an affiliate’s actions.
Prevent affiliate abuse FAQ
What is affiliate abuse?
Affiliate abuse happens when an affiliate marketer uses deceptive or fraudulent practices to boost their earnings from an affiliate program. Common examples include click stuffing, making fraudulent purchases, and generating fake leads.
What is the biggest problem in affiliate marketing?
Affiliate abuse is a major issue in the affiliate marketing industry. Experts believe that abusive practices generate nearly 20% of all affiliate traffic and cost the industry billions of dollars each year.
How does affiliate abuse impact businesses?
Affiliate abuse can damage your online business’s reputation, raise marketing and fulfillment costs, and introduce falsified information into your lead management or customer relationship management system.
