If we learn nothing else from the whole NYS internet tax fiasco it is this – Affiliates need to find a way to work together to ensure that we are protected to some degree or networks need to take the steps. When some merchants chose to terminate affiliates with less than 24 hours notice I didn’t think things could get worse. Little did I know what was to come.
During these first 9 days of June, a few merchants have decided to not only terminate NY affiliates rather than collect the tax, they are terminating effective a day in the past! That a merchant can send an email on June 5, 2008 notifying NY affiliates that they are terminated as of May 30 2008 indicates that something is truly wrong with the current set up. Some emails even clearly state that any sales that came in after May 30 would be reversed.
I cannot imagine that networks are fine with this, unless of course they still get paid their cut of the commission. It is a grave concern that a merchant can do this in a misguided attempt to circumvent the law. I hope that they sought counsel before doing it but, in my opinion, it is an admission that tax should have been collected but they took steps to avoid it.
When we think of good merchant practices, this most certainly does not come to mind. The problem with behavior like this is that there is no way to predict it. Some of the very merchants doing this are well known and otherwise held in good regards.
I have been asked a couple times whether I think NY affiliates will rejoin merchants who terminated us over the tax law. My answer usually is that for me, it will be a pure business decision. If it is to my benefit to rejoin a merchant than I will and that is only after considering all variables. Now I see I have to ammend my answer include that I am certain I will not, at any time, rejoin a merchant who did retroactive terminations. There is simply no trust. I cannot associate myself with a company or someone who so blatantly lacks any business ethics.
One interesting final note, I received a email froma a merchant today, June 13, 2008, terminating my affiliate relationship effective May 31, 2008.