The e-com offer with 'great' ROI that lost money after refunds

The e-com offer with 'great' ROI that lost money after refunds

The setup. Revenue-share e-com offer, impulse-buy gadget, paid social. Reported 1.4 ROI on confirmed orders. Illustrative numbers.

The move. I scaled on the order-confirmation number, the one the tracker lit up green within minutes of each sale.

The numbers. Confirmed-order ROI: 1.4. But the product was an impulse buy on an aggressive angle — chargeback + refund rate hit 26% over the following 30 days. Rev-share meant I ate my share of every refund. Post-refund ROI: 1.04. Then the processor flagged the merchant for chargebacks, froze a payout, and my "1.4 campaign" briefly went negative on cash flow even while profitable on paper.

The lesson. For rev-share on physical or impulse products, the sale isn't final for 30+ days. Refunds and chargebacks claw back margin AND threaten the whole offer's payment processing. The confirmation-time ROI is the most optimistic number you'll ever see for that campaign.

What I'd do differently. Hold a 30-day mental haircut on rev-share e-com — assume 15-25% comes back and price scaling against the post-refund number. And watch the chargeback rate like it's your own merchant account, because the advertiser's processor problem becomes your frozen payout.