I think the rationale here is that it costs money to carry small affiliates.
Some payments cost as much to process as they are worth, leaving little or no profit for the program.
So by refusing to pay these monies earned, the program makes a last attempt to push the small affiliate into producing more. If s/he doesn’t perform, or isn’t able to perform, s/he is dropped and the monies remain confiscated.
Theoretically, the program ends up ahead because not only do they not carry the cost of supporting a small affiliate, they get to keep the monies earned and all future proceeds – for free.
Not only that, but newbies are often the most pesky affiliates, full of questions and conspiracy theories. Dealing with these things is time consuming, but in this industry, it’s part of the cost of doing business. Much of this can be aleviated by dealing with things openly in the forum, for every one problem you solve publicly you avoid ten of the same cropping up.
While confiscating earnings may seem profitable, it’s a flawed theory for several reasons.
Firstly, it doesn’t take branding into account. There are hundreds of small affiliates making little or no money who nevertheless contribute to branding of the properties. The number of views per site may not be that high, but if you add all these sites up, it’s sizeable. Getting your brand seen is valuable, very valuable, whether the view produces an immediate player or not. Exposure creates recognition and trust, two very valuable items. Most businesses would kill for such free exposure.
Secondly, now you have permanently pissed off a small affiliate. Look around – many of the affiliates who were big a few years ago are not around anymore, the majority of players now comes from affiliates who were too small to compete then. Do you think the scorned affiliate whose earnings were confiscated will promote you when s/he becomes successful? I don’t think so.
Thirdly, you are pissing off producing affiliates who, for one reason or another, are not ready to give you good exposure now. Maybe they have all the good spots filled with well producing properties. When a new spot opens up, do you think they will place a property that confiscated monies earned from them previously? Dream on! Even if you carefully avoid confiscating monies from this category, do you really think they will ever trust you? They would be fools to do so.
Fourthly, a lot of serious affiliates are in it for the long term. Like in any other job, they work for stability and continued reward. The policy of refusing payments owed for delivered players prevents people from selling their site and holding on the accounts in order to continue to get paid for the work they did all the previous years. This option is now mute, and in this business, there is no other way of retirement available at all. That makes this program totally undesireable for any affiliates who want to pursue this as a profession.
It is a short sighted policy everyway I look at it. If it made much sense, we would have fought this trend years ago.
How do other programs handle the problem of too many small payments? You got it, minimum payment amounts. DUH! And dealing with pesky newbies, it’s the cost of doing business and an investment in the future. And it can be handled efficiently.