Cash back scheme advice

[mediakitchen]

Would appreciate some advice. A client has asked me to implement a system where they pay cash to members. Essentially the client has an affiliate partner that is paying 10% commission to my client and my client wants to pay 5% back to the member that generated the sale.

Cash back would be via paypal or cheque.

Affiliate company would send a list of those who purchased the items.

The offer only available to members of my clients site.

I get a feeling this scheme could have potential downfalls assuming it is even allowed. Any advice on whether this cash back idea has flaws?

 

[Super Simon]

At what point is the intial 10% commission paid to your customer? Immediately? 14 days later? Monthly?

I guess my only concern (amongst the hassle of doing it) is what happens if there is a commission clawback for any reason?

Say for example the company pays commission to your customer of £100. In turn, your customer then pays the customer £50 as cashback but then they seek a refund of the item they purchased. I would expect your customers commission would be clawed back by the supplier, so what happens to the other £50? I guess it'd have to go down as a loss for his company.

 

[mediakitchen]

Thanks Simon.

It is a service that this cash back relates to and will be paid on a monthly basis based on what the customer has paid. The affiliate deal was initially just going to be simple and my client would receive 10% but my client wanted to share this commission with the customer. The affiliate deal allows sufficient time to allow for any cancellations before we receive our commission.

My concerns were mainly that there may be issues with paying cash to lots of members of the site. Apart from admin time and bank charges, I just had a niggling feeling there may be other potential pitfalls. Perhaps my worries are unfounded as I guess the likes of quidco operate similar schemes though obviously for a range of retailers/service providers.

Thanks

Paul

So assuming there is no iussue