A form of affiliate fraud in which a publisher (or accomplices) makes purchases through affiliate links using stolen payment information or with the intent to initiate a chargeback after the affiliate commission is recorded, effectively stealing both the brand's product (or service) and the affiliate commission. Chargeback fraud targets the timing gap between when affiliate commissions are recorded and when chargebacks are processed. How chargeback fraud works: fraudulent publisher or accomplice places orders through publisher's affiliate links using stolen credit cards or with chargeback intent; affiliate commission is recorded immediately in the affiliate network; fraudulent order ships (or service is accessed); consumer whose card was stolen disputes the charge, or the fraudster disputes their own legitimate purchase; chargeback is issued against the brand; affiliate commission may already be in pending status before the chargeback is processed. Financial impact: brand loses the product or service provided to the fraudster; brand pays the chargeback fee ($15-$100 per chargeback from their payment processor); affiliate commission may have already been paid or may be in the pending queue; double damage: inventory/service loss + chargeback fee + affiliate commission. Detection signals: abnormally high chargeback rate for publisher-referred orders (compared to program baseline); orders with high-risk IP addresses, address mismatches (billing ≠ shipping), or unusual payment patterns; publishers with very high AOV but low conversion rates (selecting expensive items for maximum commission per fraud event). Prevention: commission holdback periods (30-60 days) allow chargebacks to be processed before commissions are paid; new customer restriction reduces the target surface; commission reversal policies that reverse commissions on chargebacked orders; fraud monitoring tools that flag high-chargeback publishers.
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