Payout Agent

The Payout Agent automates commission calculations, handles refunds and chargebacks, processes mass payouts on schedule, and generates tax documents—all with a complete audit trail for compliance. It ensures affiliates get paid accurately and on time.

The Payout Agent handles the complete commission lifecycle:

• Commission Calculation — Computes commissions based on your rules
• Tier Application — Applies tier bonuses and product-specific rates
• Refund Handling — Adjusts commissions for refunds and chargebacks
• Fraud Integration — Respects Fraud Agent holds and risk scores
• Mass Payouts — Processes payments on your configured schedule
• Tax Documentation — Generates 1099s, W-9 collection, international forms
• Audit Trail — Complete logging for every transaction

For every attributed order, the Payout Agent performs these steps:

1. Identify Affiliate
   • Determine which affiliate is attributed to the order
   • Verify affiliate is active and in good standing
2. Determine Rate
   • Check for product-specific commission rate
   • Check for collection-specific rate
   • Check for promotional/campaign rate
   • Fall back to affiliate's tier rate
   • Apply tier bonus if applicable
3. Calculate Base
   • Apply rate to order value (excluding shipping, taxes if configured)
   • Handle percentage vs. flat-rate commissions
4. Apply Modifiers
   • First order bonus (if configured)
   • Volume bonuses (if applicable)
   • Promotional multipliers
5. Check Fraud Score
   • Query Fraud Agent for risk assessment
   • Hold if above threshold
6. Record Commission
   • Create commission record with full calculation details
   • Set status: Pending, Approved, or Held

When multiple rates could apply, the agent uses this priority:

1. Affiliate-specific rate (if set for this affiliate)
2. Product-specific rate (if set for this product)
3. Collection-specific rate (if product is in a special collection)
4. Campaign/promotional rate (if active promotion)
5. Tier rate (affiliate's current tier)
6. Default program rate (fallback)

Commissions move through several statuses:

• When: Order placed, within grace period
• Duration: Default 30 days (configurable)
• Purpose: Allow time for refunds/chargebacks
• Visible to: Affiliate sees as "Pending"

• When: Grace period passed, no refund, low fraud risk
• Transition: Automatic or manual approval
• Status: Ready for payout processing
• Visible to: Affiliate sees as "Approved"

• When: Fraud Agent flags, manual hold, dispute
• Action: Requires manual review to approve or reject
• Visible to: Affiliate sees as "Under Review"

• When: Payout batch initiated
• Duration: Until payment confirmed
• Visible to: Affiliate sees as "Processing"

• When: Payment successfully delivered
• Record: Payment method, transaction ID, date
• Visible to: Affiliate sees payment confirmation

• When: Refund processed, chargeback received, fraud confirmed
• Action: Commission deducted from balance
• Handling: May create negative balance for future offset

The Payout Agent automatically adjusts commissions when orders are refunded:

• Action: Commission reversed completely
• Timing: Within grace period: commission cancelled; after: creates negative adjustment
• Affiliate view: Commission marked as "Reversed - Refund"

• Action: Commission adjusted proportionally
• Calculation: New commission = original × (new order value / original value)
• Affiliate view: Commission marked as "Adjusted - Partial Refund"

• Action: Commission reversed, optional penalty
• Penalty: Configurable—some programs deduct additional fee
• Pattern detection: High chargeback rates flagged for review

On payout days, the agent processes payments through these steps:

1. Aggregate Commissions
   • Sum all approved commissions per affiliate
   • Subtract any negative balances or adjustments
2. Verify Thresholds
   • Check if balance meets minimum payout threshold
   • Apply tier-specific threshold overrides
3. Check Requirements
   • Tax documents on file (W-9 for US)
   • Payment method configured
   • Account in good standing
4. Process Payment
   • Initiate payment via configured method
   • PayPal: Mass Payouts API
   • Bank: ACH/Wire via Stripe Connect
   • Store Credit: Generate gift card
5. Confirm Delivery
   • Wait for payment confirmation
   • Handle failures and retries
6. Notify Affiliate
   • Send payment confirmation email
   • Update portal with payment details

The Payout Agent supports multiple payment methods:

• Speed: Instant to few hours
• Coverage: 200+ countries
• Fees: ~2% transaction fee
• Requirements: PayPal Business account, Mass Payouts enabled

• Speed: 2-3 business days
• Coverage: US banks only
• Fees: Lower than PayPal
• Requirements: Stripe Connect integration

• Speed: 3-5 business days
• Coverage: International
• Fees: $25-50 per transfer
• Best for: Large international payments

• Speed: Instant
• Format: Shopify gift card
• Fees: None
• Bonus: Option to offer % bonus for store credit

The Payout Agent manages tax compliance:

• When: Required before payout for US affiliates earning $600+
• Collection: Built-in form in affiliate portal
• Storage: Encrypted, secure storage
• Reminder: Automatic reminders for missing forms

• When: January each year for prior year
• Threshold: $600+ earnings
• Format: 1099-NEC
• Delivery: Email to affiliate, available in portal

• W-8BEN: For non-US affiliates (tax treaty benefits)
• Withholding: Configurable based on tax treaties
• Documentation: Annual payment summaries

Access settings at AI → Agent Insights → Payout Agent → Settings.

• Weekly — Every Monday (or configured day)
• Bi-weekly — Every other week
• Monthly — 1st of each month (or configured day)
• Manual Only — No automatic payouts

• Minimum Balance — Minimum to trigger payout (default: $50)
• Tier Overrides — Lower minimums for higher tiers
• Method Minimums — Per-method minimums (e.g., $100 for wire)

• Duration — Days before commission confirmed (default: 30)
• Override — Shorter period for trusted affiliates

The Payout Agent generates comprehensive reports:

• Payout Summary — Each payout batch with totals and details
• Commission Report — All commissions by period, affiliate, status
• Tax Report — Annual earnings per affiliate for 1099 preparation
• Audit Log — Every commission calculation and status change
• Refund Report — All adjustments and reversals

• Match to your typical refund window
• Consider product type (higher for high-consideration items)
• Balance affiliate satisfaction with fraud protection

• Require W-9 before first payout for US affiliates
• Generate and send 1099s by January 31
• Keep records for 7 years

• Set clear expectations on payout timing in terms
• Send payment confirmations promptly
• Explain any holds or delays proactively

• Check affiliate's payment method is valid
• For PayPal: verify email is correct and confirmed
• For bank: verify routing/account numbers
• Review error message in payout details

• Check if order was attributed correctly
• Verify affiliate was active at time of order
• Check if commission is in "Pending" status
• Review audit log for the order