Definition
Chargeback
A chargeback is a payment dispute the customer raises with their bank. The money is taken back from the merchant, and the commission has to follow.
The difference from a refund is who decides. A refund is the merchant giving the money back. A chargeback is the customer's bank taking it back, without asking, with a fixed fee on top imposed by the card network — so the sale costs more than if it had never happened.
On the affiliate side the consequence is direct: the commission must share the fate of the sale. Otherwise the merchant pays a commission on a transaction whose money was pulled back, and the entire cost of the episode falls on them.
The part many tools handle badly is the reversal. A dispute can be won, and the money returned to the merchant. What was taken back from the affiliate must then be returned to them, exactly — not approximately, and without reviving in passing a commission that had been voided for some other reason, fraud for instance.
At earnwithaffiliate
Handled when the dispute opens rather than when it closes, and fully undone if the dispute is won.
Related terms
Clawback
A clawback is the recovery of a commission already paid out, when the matching sale is refunded after the affiliate was paid.
Self-referral
Self-referral is placing your own order through your own affiliate link to give yourself a discount. It is the most common fraud in an affiliate program.
Commission approval window
The approval window is the delay between a commission being earned and becoming payable. It exists to cover the refund window.