5 Major Mistakes to AVOID in Your Affiliate Program Terms and Conditions
Want to know what common mistakes you must avoid in your affiliate program terms and conditions? I am sharing what major issues to avoid and what you need to protect your affiliate program and business.
Boosting your business with your affiliate program can be extremely lucrative, but if you’re anything like me, you are researching everything you need in your affiliate program terms and conditions to protect your business and reputation. As a lawyer myself who drafts and reviews contracts and T&Cs for (online) entrepreneurs like you, I am sharing the most common mistakes I have seen in affiliate program terms and conditions.
I will tell you all the mistakes to avoid in your affiliate program terms and conditions, including what is an affiliate agreement and why you can’t just grab any one page affiliate agreement template off the internet.
After learning about the mistakes to avoid and what you need in your affiliate program terms and conditions, you will have everything you need to boost your sales while protecting your business and reputation.
This post is all about the major mistakes to avoid in affiliate program terms and conditions.
Crucial Affiliate Program Terms and Conditions
What is an affiliate agreement
First, let me tell you exactly what is an affiliate agreement. An affiliate agreement is usually in the form of terms and conditions affiliates must agree to when applying for an affiliate program.
The affiliate program terms and conditions set out the rules under which an affiliate may participate in your affiliate program. The affiliate marketing terms state under which conditions your affiliates are entitled to commissions or rewards, but also when they lose the rights to commissions or to participate in your affiliate program.
To give you a better idea of what is an affiliate agreement, here is an affiliate program overview of the main terms you need:
Eligibility: The affiliate program terms and conditions state what prerequisites an affiliate needs to meet to join your affiliate program, such as the minimum age and all the personal information provided by the affiliate being true and complete.
Application procedure: The affiliate marking terms outline how aspiring affiliates may apply for your affiliate program and how the process works to be admitted to the program, including your right to accept or reject applications.
Responsibilities: Any affiliate program overview should outline the responsibilities of affiliates, such as how affiliates may promote the products or services, what they can and can not say about those products and services, and compliance with influencer marketing laws.
Tracking: The affiliate marketing terms should state how affiliates are monitored through affiliate links and how referrals are tracked by the system used for the affiliate program.
Commissions: Affiliate agreements state what commission or rewards affiliates can earn and how affiliates will earn commissions, including specifics on the commission rates, payment methods, and frequency of payments.
Intellectual property rights: Affiliate marketing terms will also include wording to ensure the company remains the owner of the intellectual property rights to the promotional and marketing materials made available to affiliates, while the affiliates get a license to use those materials under the affiliate program terms and conditions.
Termination: Another main term in your affiliate program terms and conditions is the termination clause. The termination clause should outline under which circumstances you may terminate or suspend an affiliate’s participation in your affiliate program, like in the event of a breach of your terms, damage to your reputation, or non-compliance with influencer marketing laws.
So, this is what is an affiliate agreement and the basic terms included in affiliate marketing terms.
To learn more about the essentials you need in your affiliate program terms and conditions, read this blog post on the 9 Must-Haves for Your Affiliate Terms and Conditions.
Affiliate program overview
Now you know what is an affiliate agreement, let’s get into what mistakes you must avoid in your affiliate program terms and conditions.
1. Ambiguous or vague language
I have seen the one page affiliate agreement template and affiliate marketing terms that go on for 30 pages. The common denominator between both? They are way too vague and ambiguous. The one page affiliate agreement template has too few words to give a complete understanding. The extremely long affiliate program terms and conditions contain sentences that take up five lines. Even I have a hard time following them, so imagine an eighteen-year-old food blogger with no law degree trying to make sense of them.
And that is exactly my point; anyone, whether a seasoned business owner or a young person just starting to monetise their TikTok or blog, should be able to fully understand your affiliate program terms and conditions. It is crucial to have clear and simple language in your affiliate marketing terms.
Your T&C may contain all the terms you need, but what is it worth if it is written in legal jargon that your affiliates do not understand? It will only cause misunderstandings and potential disputes simply because your affiliate does not understand your terms.
Ensure your affiliate program terms and conditions are written in a way that anyone can understand, regardless of their level of business experience and legal knowledge.
2. Unclear commission rules
Your rules on the commission your affiliates get paid and when and how they get paid should be clearly defined.
First, you must state the commission rate and state that the rate is subject to change. I have seen too often that the commission rate is stated but not that it may be changed at any time.
You may want to increase or decrease the commission rate over time depending on the performance of your affiliate program, changing costs of production of your products and other circumstances. You should always be able to adjust the commission rate for whatever reason. Also, clearly state that the prices of your products and services may change, affecting the commission your affiliates receive.
You may be selling physical products that may be returned or other products or services for which you provide refunds. Another common mistake is that the affiliate program terms and conditions do not state that the affiliates lose the right to commissions if products are refunded or charged back.
In any case, whether it’s part of your product or service terms for customers, you want to state all the exceptions that may affect the commission in your affiliate marketing terms, such as product returns or chargebacks.
Another common issue I have seen is that the affiliate program terms and conditions do not state when commissions are paid out, through which payment method and how often affiliate get paid their commissions. It’s crucial to provide clarity on payment terms and frequency to build trust with your affiliates.
Want to know what else you need to include in your affiliate program terms and conditions to protect yourself against wrongful money claims from your affiliates? Read this blog post on the 9 Must-Haves for Your Affiliate Terms and Conditions.
3. Lack of disclosure requirements
Influencer marketing laws require brands and their affiliates to be transparent about their relationship. However, if your affiliates do not comply with those guidelines, you could take the fall for them.
I have seen the requirement to comply with influencer marketing and consumer protection laws in sponsorship agreements, but they are often missing in affiliate program terms and conditions. Failure to require your affiliate to properly disclose their affiliate relationship with you can lead to negative reviews, thus, hurting your brand’s reputation or even legal consequences for your brand.
Therefore, you must clearly state that your affiliates must disclose their relationship with your brand in compliance with applicable marketing and consumer protection laws.
4. No clear definition of prohibited activities
What I see in any free affiliate marketing terms and conditions template is the prohibition to perform activities that do not comply with applicable influencer marketing laws or the rules of the affiliate program or that damage the brand’s reputation. However, these terms often do not state exactly what activities are prohibited.
You want to make very clear to your affiliates what they may not do, such as:
spamming through email or comments on social media,
engaging in false advertising,
using deceptive tactics,
promoting illegal activities,
insinuating that you endorse or sponsor the affiliate, or
posting inappropriate, offensive, harmful or controversial content.
Clarifying exactly what constitutes behaviour you do not accept helps maintain the integrity of your brand. It prevents your affiliates from engaging in activities that may seem perfectly okay to them but ultimately could harm your brand.
5. Insufficient rights to stop your affiliates for whatever reason
What I see in most affiliate program terms and conditions is the right to suspend or terminate an affiliate’s participation in the program in case of fraudulent activities, violating the terms, or damaging a brand’s reputation.
What I do not see is much beyond that.
You need terms in your affiliate program terms and conditions that ensure that you can:
stop your affiliates from breaking the rules;
make them pay for their mistakes;
completely ban them from the affiliate program; and
stop paying your affiliates.
All that for whatever reason. It’s your affiliate program, and while you would not ban your affiliates and not pay them any commissions if they are doing a fantastic job, you do not owe them an explanation if you decide to ban them when they do something you do not like.
For example, you may want to kick affiliates out of your program who consistently underperform or do not meet minimum performance thresholds. These underperforming affiliates drain your precious resources without providing significant value to your business. By weeding out those affiliates, you maintain a high standard for your affiliate program and only allocate your resources to active, high-performing affiliates.
No affiliate is entitled to be your affiliate; it’s a privilege.
The point of these affiliate terms and conditions is to prevent and stop anything from hurting your brand or costing you any money (beyond fair commissions).
One page affiliate agreement template
If you already have a one page affiliate agreement template or want to grab a free affiliate marketing terms and conditions template online, ensure it contains all the essential terms I just discussed. You can use this list as your affiliate program terms and conditions checklist!
Paid vs free affiliate marketing terms and conditions template
If you want affiliate program terms and conditions containing all the essentials I just discussed, my affiliate program terms and conditions have all of them and more! My affiliate program terms and conditions template is not a one page affiliate agreement template but a comprehensive template with everything you need to protect your brand and money!
My affiliate program terms and conditions template is a paid product, but you can be at peace knowing it contains everything you need. Also, my template is fully customisable for your affiliate program. You can purchase your affiliate program terms and conditions on this page of my contract shop.
This post was all about the essentials your affiliate terms and conditions must have to protect your brand’s reputation.
Want to know which essential terms you need in your affiliate program terms and conditions? Read this blog post on the 9 Must-Haves for Your Affiliate Terms and Conditions.
You can get your affiliate program terms and conditions on this page of my contract shop!
Are you selling digital products? Then you need terms and conditions for your digital products too. You can get my Terms and Conditions for Digital Products on this page!
Are you selling an online course? Then you need terms and conditions for your course. You can get my Terms and Conditions for Online Courses on this page!
