How to Calculate ClickBank Refund Rate in 4 Easy Steps

For those promoting ClickBank products, you may want to take note of the refund rate for these products. It would not be very smart to promote a product with a high payout fee but also a high refund rate. There are four easy steps to calculate the refund rate for ClickBank products.

The formula is simply like this:

Step 1: (Product Price – 7.5%) – $1 = Net Commission

We start with the Net Commission calculation where the formula is (Product Price – 7.5%) – $1. The 7.5% percentage and $1 are actually ClickBank’s commission charges as an affiliate network to handle all the processing and administration. So, subtracting the ClickBank commission from the product price, this equals your ‘Net Commission’.

Step 2: Net Commission x Payout Percentage = Affiliate Commission

This is where you multiply your Net Commission with the Payout Percentage, then it equals your Affiliate Commission.

Step 3: Affiliate Commission – $ Earned/Sale = Refund Difference

Get the Refund Difference, simply minus your Affiliate Commission on the Earned/Sale value.

Step 4: ($ Refund Difference / Affiliate Commission) x 100 = Refund Percentage

The Refund Difference divided by the Affiliate Commission, multiplied by 100, then this equals your Refund Percentage.

Now we are going to demonstrate it more clearly with an example. I’ll use “Stream Online Movies” as our example product. There are 3 variables that we must take into account.

Product price = $45.95

$ Earned/Sale = $25.21

Payout percentage = 75%

The price of the product is actually $45.95. The product price can be found by clicking on ‘View Launch Page’ which will direct you to the sales page offer and all you need to do is search for the product price. To stream movies online, you need to click “Get Access”, register your email address, and you will be taken to the sales offer page where you can see the price of the product. In other cases, the price of the products can usually be found by scrolling down to the bottom of the sales offers page.

The amount earned per sale is taken from the first column of the ClickBank marketplace search results. For online movie streaming, the amount earned per sale is $25.21. For this product, the payout percentage is 75%.

So now let’s work on the calculation.

Step 1: ($45.95 – 7.5%) = $41.50 (Net Commission)

You start by taking the price of the product, less the 7.5% ClickBank commission, less one dollar and that equals your net commission.

Step 2: ($41.50 x 75%) = $31.13 (Affiliate Commission)

Then, using your Net Commission, multiply it by 75% of the Payout which equals your Affiliate Commission; in this case, it would be $31.13.

Step 3: ($31.13 – $25.21) = $5.92 (refund difference)

Then subtract the Affiliate Commission from the Earned/Sale value and you’ll get a refund difference of just $5.92.

Step 4: ($5.92 / $31.13) = 19.01% (Refund Percentage)

The Payback Percentage is then calculated by dividing $5.92 by the Affiliate Commission and multiplying it by 100. This equates to a relatively high payback percentage of 19.01%.

This shows that this product is moderately successful because 19.01% of its customers have requested a refund. There are many products out there with various cashback percentages. Refunds are normal in sales and marketing. Typically, the type of cashback rate you’d like to consider on a product is between 0 and 10%. Of course, the lower the reimbursement rate, the better.