Where is my Commission Check?

Shawn Collins posted an interesting video titled “Affiliate Programs That Don’t Pay” at YouTube about a question by one of his readers about what to do if an advertiser does not pay due commissions to his affiliates. All available communication channels where tried to solve this matter, but without success. The claim is a couple hundred dollars. No excuses like “Force Majeure” or other things that were specified in the contract between you and the merchant and that would relieve him from his obligation to pay you at this time (permanent or temporarily) apply in the case.

What can you do in cases like this? There are dishonest merchants out there who simply do not pay up the owed commission. They do not belong into the realm of myth; they exist in the real world.

Four Figure or more Owed … It’s a no Brainer

If the outstanding commission is in four figures range and up, easy, you contact a lawyer and have him handle the case for you, starting with sending out some nasty and serious legal letters (.. the “or else!” kind). This will often have the desired effect already, because the merchant realizes that you are serious about it and will not let it go.

If the claim for the amount that is owed can be easily verified and a written agreement between you and the merchant exists that supports your claim and his obligations, then your lawyer would have a field day and rip the merchant apart if it comes to a court case. The merchant knows that (or should know that) and will in 99% of the time pay you what he owed.

The Little Big Money

Now for every affiliate who the merchant owed that kind of amount in commissions, most likely many more do exist; whom the merchant owes only a fraction of that amount. The money owed to those affiliates would be worth the money for getting a lawyer involved on your part. The merchant is most likely betting on this fact and will be the big winner, because all those little amounts owed can add up quickly to a decent lump sum of money.

One thing you might want to check in your agreement with the merchant is, if there was anything specified regarding attorney fees. You might have agreed on a clause that states that the losing party agrees to pay the attorneys fee in the case that it comes to a legal dispute. That could be used to your advantage, because you could back get the attorney fees you did pay without the need to fight for it.

Not So Smart Solutions

Putting up a site AdvertiserNameSux.com is probably not an effective way to get to your money and may increase your risk of going a bit too far yourself and open yourself up for a lawsuit by the merchant for libel or slander.

Paying a lawyer is not worth it. What other options do you have? The answer is “several” and if and which one you use depends on several factors of which the main one is your commitment in time and energy to this.

A Bet on your Write-Off

Shawn’s advice to let it go and use the time and energy to do something productive that makes you money is a possible one. The majority of people do probably decide for this one. It is the easiest and most cost effective option. All others will take away your time and the amount that is being owed does not justify much time to spend on it, if you calculate it that way.

Well, there are also the type of people who spend the time because of principles and a strong sense of right and wrong. If you assign minimum wage as hourly rate and the amount is in the higher three figures, you might even end up with a positive balance at the end of it.

Okay, you decide on doing something about it. What can you do?

Small Claims Court

The first option to explore would be IMO the small claims court.

The details for it vary by state, but the damage/claim has to be below a certain four digits figure (I believe it is $5,000). You can do that without a lawyer and represent yourself. In most states can you do it yourself, even if you are a company and not just be an individual who is making the claim.

I suggest making a search for the exact phrase “small claims court” at your favorite general search engine.

The state of Connecticut states in their small claims court FAQ:

  • A part of Superior Court where you can sue for amounts of up to $5000.
  • You do not need an attorney.
  • Magistrates (specially appointed lawyers) hear the cases.
  • Simple rules of evidence apply, instead of complex rules.
  • No right to appeal the outcome

The small claims court covers:

  • Unpaid debts
  • Breach of a written or verbal contract
  • Back rent
  • Return of security deposit
  • Broken or damaged property
  • Doctor/hospital bills for treatment of personal injuries
  • Issues valued at less than $5000

SmallClaim123.com shows all the steps of a small claims court process.

  1. Fill out the complaint
  2. Deliver the complaint to court
  3. Pay the court Filing Fee
  4. Obtain the summons for the defendant
  5. Hire a process server to deliver the complaint and summons to the defendant
  6. Your day in court

Okay, you have to check the details of the rules that apply for the state and county where you file your small claims court claim. However, where do you have to file your claim to begin with? The merchant who owes you money probably does reside in a different county or even state from where you live.

The Small Claims Manual (PDF) by the State of Indiana states to that question:

Small Claims Rules state that the right place to file a small claims suit is the county:

  1. Where the transaction or occurrence actually took place; or
  2. Where the obligation or debt was incurred; or
  3. Where the obligation is to be performed; or
  4. Where the Defendant resides; or
  5. Where the Defendant has his or her place of employment at the time the claim or suit is filed.

The county in which the suit is filed must meet one of the above requirements in order to be the proper county of venue. If several counties qualify under the requirements, then the Plaintiff can file suit in any one of the qualifying counties.

If you can file close to your location, it might be worth it. Check your agreement with the merchant, if it states anything about the venue. The part of a contract that addresses that is most of the time titled “Choice of Law” or “Governing Law”. If you have to make your claim at a remote court, be ready to make the trip down there once to appear in court and support your claims.

Non-Legal Actions That May Work

You can also use recruiting grounds of the merchant to find new affiliates to cause them headaches, by posting about your experience with that merchant so that other affiliates will seriously consider, if they want to do business with that merchant or not. Blog about it, but in both cases be careful and stay true to the facts. Also, do not use profane or offending language that could get you into legal troubles.

Check if the merchant does anything publicly where community feedback is allowed and use that to “ask” where the merchant stands when it comes to payment morals and value of partnerships. 🙂
This has to be asked in a tone that makes clear that this question is specific to a partnership and not just generic. People will become curios what is going on and no exaggeration will be necessary to get the message across and embarrass the merchant.

You could say things like:

“I was a partner (or I thought I was) of Merchant XYZ and helped him with growing sales and new customers. I was supposed to receive X on date Y for the referrals to compensate for my time and money spent for him. Now it is Y days later and I still have not received the promised compensation. I wonder if this has something to do with me specifically or if this is the general attitude of them towards their friends and partners.”

What you want in essence is getting attention and at the same time bad publicity for the merchant. Whenever he tries to shine in a bright and positive light, you cast a shadow. Do not make it a personal thing, because things can get out of hand quickly. All I am suggesting is to leverage on social media and community and their much stronger power today compared to just a few years ago.

Causing more harm to the merchant than what he owes you does not require too much work.
He might realize that paying you will be in his financial interest, get it done, and out of his world.

Disclaimer: I am not a lawyer and do not qualify to provide legal advice to anybody. I made personal recommendations and suggestions based on personal experience and research. You should always consult a professional and qualified legal advisor before you take any actions that could have legal consequences. You should at least do the due diligence yourself, verify and double-check the claims I made in this post and study available resources to the subject elsewhere.

Some legal resources for marketers are available here.

Cheers!
Carsten Cumbrowski

About Carsten Cumbrowski

Internet Marketer, Entrepreneur and Blogger. To learn more about me and what I am doing, visit my website and check out the “about” section.

Twitter: ccumbrowski

4 Responses to Where is my Commission Check?

  1. Victor says:

    I loved the article it was extremely helpful! Thank you.

  2. Thank you for the feedback Victor and you are welcome. I am glad that this article is able to help you.

  3. Neil, you mean "advertisers" and not affiliates right? The post is regarding advertisers who don't pay up.

    Anyhow. I am no lawyer, but I would say that similar rules apply, the only problem is the distance and that small amounts of money owed would probably not be worth the court route. I would go with the "alternative" opten in those cases :).

  4. Nice article, I would appreciate any of your readers opinions on international disputes. Because I live outside of the Juridiction of most of my affiliates (I live in the UK) what would be my best route in the case of a problem?