Instant Split Commissions - A Good Deal?

Recently, I was approached by someone who wanted me to sell his product as an affiliate. He tried to sweeten the deal by offering "instant split commissions" through PayPal. I'd heard of this before, but never gave it much thought until someone offered it to me. After considering, I said I'd check out his product, but I wouldn't accept the instant split commissions.

He seemed surprised that I was refusing to be paid the minute the customer made the purchase.

The way these programs work is that the customer makes the payment an equal payment to two PayPal accounts (the merchants and the affiliates). Thus, as an affiliate, you get your commissions right away. Sounds good, doesn't it?

Not so much to me. First of all, if a customer is paying me, I am responsible for the sale. I may have to deal with PayPal complaints if there is a problem with the service or I may have customers contacting me directly for support. I'm just an affiliate - I don't need to deal with that.

Second, if a merchant is paying commissions via PayPal, I expect them to use the "mass pay" feature where I don't pay any fees for receiving the money. The instant payment option will suck up a LOT of your commissions in PayPal fees.

And let's look at this from the merchant's point of view. Certainly he saves time in trying to send affiliate payments (but if he's paying by PayPal and his affiliate script supports Mass Pay file formats - it only takes a few minutes to pay out affiliates). This system might also motivate affiliates when they want to get payments right away. Why promote a program that pays in a month when you can get paid now, right?

But honestly, as an affiliate manager, my star affiliates aren't the people who need cash right away. They are usually people who earn a consistent income with affiliate programs and are happy to wait for a big fat juicy affiliate payment once per month.

And what about refunds? I wouldn't even want to go there. If you refund the money, you have to get your affiliate to refund the other portion. I imagine that could be quite a headache.

I think I'm staying clear of this one.