Smashwords has uncovered a series of fraudulent purchases that seems to have been designed to gain unearned affiliate fees. The sales took place over a 48-hour period and amounted to around $1,300, with the scammer(s) reportedly using stolen credit cards in the hope of collecting an 11% affiliate payout that would have netted them a couple of hundred dollars. The sales have been reversed, with around 190 affected Smashwords authors set to find that sales have been lost.
Scams like this aren’t exactly rare in the affiliate world. Earlier this year, for example, a group from the UK were found to have made £500,000 (about $784,000) by using stolen credit cards to buy their own music on iTunes. Smashwords runs a popular and profitable affiliates service, so it’s perhaps inevitable that someone would try a trick using the site, but it seems to have been spotted quickly and cut off.
Smashwords posted news of the attempted scam on its Site Updates page; it looks like no-one will end up out of pocket, although those 190 authors will get the rare experience of having a Smashwords sale reversed. Sale reversals are very rare at Smashwords, unlike Amazon. While Amazon offers a seven-day window for purchasers to get a refund, most other ebook stores are much more strict.