5 Edge Cases That Break a Simple Referral Program
A referral program looks like one line of logic: if someone signs up through a link, pay the person who shared it. Then real money gets involved. We recently built one for our SaaS, with commissions paid on every customer payment for 12 months. Most of the work went into these five cases. 1. Two links, one customer: who gets the credit? A visitor clicks one promoter's link on Monday and another…
Referral programs offer a simple formula: one click, one reward. However, as <source> reveals, there are five complex edge cases that can disrupt this straightforward system. First, when a visitor clicks multiple promotion links, the system must decide which one to credit. The chosen rule is first touch, keeping the first valid code and ignoring any subsequent ones.
Second, people may attempt to self-refer by using different email addresses on the same device to exploit referral discounts. The solution involves comparing mobile numbers and email addresses, flagging unusual patterns for review instead of automatic blockage. Third, the challenge of handling multiple identical payments, as they can all be registered as commissions, is solved by storing the payment ID as a unique identifier in the database.
Fourth, refunds made after commissions have been paid can lead to lost revenue. To mitigate this, commissions are placed in a pending state for 30 days before being approved and paid. Lastly, overlooking tax considerations can lead to paying commissions on taxes that ultimately go to the government. By separating the base amount from the commission, and accounting for taxes upfront, these complexities can be managed.
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