Performance marketing is an advertising model that rewards marketers for achieving specific performance-based goals such as a sale, lead, or click. However, this model is susceptible to fraud, where advertisers or affiliates make fraudulent claims for performance-based rewards. One of the most common forms of fraud in performance marketing is chargebacks.
A chargeback is when a customer disputes a transaction with their bank and requests a refund. In the context of performance marketing, chargebacks can occur when a customer disputes a transaction that was attributed to a performance-based action, such as a sale.
Performance marketing fraudsters may manipulate the chargeback process to receive fraudulent payments. For example, they may use fake or stolen credit cards to make purchases, knowing that the chargeback will occur after they have received the performance-based reward. They may also use bots to create fake traffic, clicks, or leads, which can result in a high volume of chargebacks.
To prevent chargebacks in performance marketing, advertisers and affiliates should take several measures. Firstly, they should ensure that their performance marketing network is secure and implement anti-fraud measures to detect and prevent fraudulent activities. Secondly, they should monitor their performance marketing campaigns for signs of fraud, such as an unusually high volume of chargebacks, and investigate any suspicious activity. Thirdly, they should work with their payment processors to implement chargeback prevention measures, such as verifying the validity of transactions before paying out performance-based rewards.
