Posted on October 26, 2009 in
ClickBank
ClickBank Refund Rate Definition
ClickBank Refund Rate means how many customers out of 100 asked for the refund.
For example if ClickBank Refund Rate is 3%, it means that 3 out of 100 buyers on average are asking for the refund.
ClickBank Refund Rate Formula
As defined in ClickBank Help Center, ClickBank subtracts 7.5% + $1 from every sale. So the formula which is being used by ClickBank Refund Rate calculators is:
EST = (Price * 0.925 – $1) * (PPS / 100%)
Where:
EST is estimated affiliate’s earnings.
Price is item’s price.
PPS is vendor’s %/sale.
RR = (1 – EPS/EST) * 100
Where:
RR is ClickBank refund rate
EPS is actual average $/sale
Where can you see ClickBank refund rate?
In CBGraph you can open statistics for any vendor and click on "Items + Refunds" report. You will see vendor’s items, estimated affiliate earnings and ClickBank refund rate there.
But if you tried it you could find there are many items with negative ClickBank refund rate…
What does Negative ClickBank refund rate mean?
It is possible to calculate ClickBank refund rate *only* if a vendor has one item, or he/she has few items but only one is actually being used on vendor’s sales page.
Often vendors create lots of items (for different products, discounts, backend, etc.). But ClickBank provides only average value for earnings per sale ($/sale) for every vendor. So it’s impossible to find out actual ClickBank refund rate for each item in this case. Only ClickBank and vendor know this info.
When you see many items or some items have extra huge or negative value in refund rate column, simply ignore it. It is impossible to calculate refund rate for that vendor.
So, is "Items + Refund" report is useless in this case?
No, you can at least guess that vendor has some items for backend sales. Or you can find there are some discounts and estimate how often they are being used. Etc.
It is also a common situation when a vendor has many items (let’s say item1 is actual product, item2 is 10% discount and item3 is 25% discount; or there can be other products except item1), but for long period of time the vendor doesn’t sell other items except item1. In this case refund rate for item1 will be quite accurate, because only this one is actually being sold. In this situation ClickBank refund rate for item1 will be about 0-1%, for item2 RR will be negative and will have about -8-12% value, for item3 RR will be even more negative: -23-27%.
So if you see that one item has ClickBank refund rate around 0-1% and other items are extraordinary negative or huge, you can guess that the item is the main one. To confirm your guesses you can go to vendor’s sales page and click on the order button. When you are on the order page, look at your browser’s address bar, it will contain a long address with "item=…" in it (BTW, it is a great technique to unleash vendor’s basic item).
Try to avoid vendors whose products clearly have poor ClickBank refund rate (is more than 3%). It is not because you might have refunds if you will promote such product, it is because you don’t want to promote scam products with no value to people.