This page is part of the guide to calculating an illustrative referral reward. It does one thing: it puts a buyer-refund-only case beside a supplier-reversal case, using the same starting numbers, so the difference is visible at a glance.
The starting point both examples share
Illustrative and fictional. A 470-person commercial insurance broker licenses a dataset of policy servicing records. SourceX licenses business data directly from companies and pays them for it. We are their counterparty from agreement through delivery and payment. Under the default terms the related reward on this first qualifying transaction is the greater of $50,000 plus 5% and 15% of Actual Supplier Payout, with no cap: USD 50,000 plus 5% of $180,000 is $59,000, more than 15% of $180,000 ($27,000), so the reward is $59,000.
| Item | Amount |
|---|---|
| SourceX licenses business data directly from companies and pays them for it. We are their counterparty from agreement through delivery and payment. | $180,000 |
| Default reward at the greater of $50,000 plus 5% and 15% | $59,000 |
| The 15% alternative, lower here, so the floor-plus-5% figure applies | $27,000 |
From here, two different things can happen.
Example 1: the buyer gets money back, the company does not
Months after acceptance, the buyer and SourceX agree that one slice of the dataset did not meet a delivery specification that was SourceX's responsibility. SourceX refunds the buyer $60,000. Nothing in the broker's agreement is affected: the broker keeps its full $180,000.
| Step | The buyer | The broker | The reward |
|---|---|---|---|
| Before | Paid SourceX in full | $180,000 | $59,000 |
| SourceX refunds the buyer | $60,000 returned | $180,000 | $59,000 |
| After | Net price lower | Unchanged | Unchanged |
The reward does not move because its base did not move. The terms say this directly: a buyer refund or chargeback alone does not reduce the reward unless it also reduces the supplier payout. Whatever the refund costs, it sits between SourceX and the buyer.
Example 2: the company's own payment is cut
In a different version of events, rights review after handoff finds that part of the delivered records came from a client contract that did not allow reuse. Under its agreement, the broker's compensation is reduced by $45,000, and the broker returns that amount.
| Step | The broker | Change | The reward |
|---|---|---|---|
| Before | $180,000 | None | $59,000 |
| Payment reduced by $45,000 | $135,000 | Down $45,000 | $56,750 |
| Reward adjustment | Not applicable | Down $2,250 | $56,750 |
The base fell by $45,000, so the 5% element falls with it, from $9,000 to $6,750, while the USD 50,000 element stays because the reduced payout still clears the USD 100,000 Minimum Transaction: the reward goes from $59,000 to $56,750. Had the cut taken the payout below USD 100,000, the transaction would no longer qualify unless SourceX had agreed in writing. If the $59,000 reward had already been paid, the terms allow the $2,250 difference to be recovered after payout where permitted by law. This is what a referral fee clawback looks like in this program.
The test in one table
| What happened | Did the company's payment fall? | Does the reward change? |
|---|---|---|
| Buyer refund, company keeps its payment | No | No |
| Buyer chargeback absorbed by SourceX | No | No |
| Buyer refund that SourceX passes through to the company under its agreement | Yes | Yes, proportionately |
| Company's payment reduced after a rights issue | Yes | Yes, proportionately |
| Itemized expense reimbursement to the company is corrected | No change to the base | No |
| Later installment paid to the company | Base rises | Yes, upward, with no cap |
The third row is the one to watch. A buyer refund matters only if, under the company's own agreement, it also reduces what the company is paid. The question is always the same: what happened to Actual Supplier Payout?
What a partner can and cannot check
You see your reward status; you do not see the company's agreement or its accounts, and you should not ask for them. What you can do:
- Record each adjustment as its own line in your installment ledger, tied to the payment it changes, rather than overwriting the original figure.
- Ask SourceX in writing when a status moves backward, citing the terms version and the payment concerned.
- Recalculate on the reduced total, keeping the floor. On a first qualifying transaction the USD 50,000 element stays and the 5% element follows the payout. Illustrative: $440,000 paid, then $40,000 reversed, leaves $400,000, so the reward goes from $72,000 to $70,000 and the $2,000 excess is adjusted; $80,000 reversed leaves $360,000, so the reward becomes $68,000 and $4,000 is adjusted. A repeat transaction inside the Repeat Window is simply 15% of the reduced figure.
- Talk to a tax advisor about repayments. The IRS explains in Publication 525 that if you repay an amount you included in income in an earlier year, you may be able to deduct it in the year you repay it, and for repayments over $3,000 you may be able to take a credit instead. How that applies to you is a question for your advisor, not this page.
Businesses that book referral income may also want the guide to ASC 606 and referral fee revenue recognition.
Where the company and the reward stay separate
Reversals are the moment when partners and clients most often mix up two flows of money. The company's compensation is set in its agreement with SourceX. The reward is funded separately by SourceX and never deducted from the company's payment, so a reversal never means the partner owes the company anything, or the reverse. The proceeds guide sets out the split.
The company still has to qualify before any of this matters: 50+ full-time employees at peak (contractors excluded), documented operating history, rights to license and an authorized contact. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 70% of the data is in English. Example 2 is the reason rights deserve attention early. Partners confirm at metadata level which records exist and whether client contracts restrict reuse; SourceX's rights review decides the rest. To model figures, use the referral earnings calculator, and the reward scenarios page shows how first and repeat transactions are rewarded.
Next step
Refer a company. No cap on rewards. Default reward on a company's first qualifying transaction: the greater of $50,000 plus 5% and 15% of Actual Supplier Payout, with no cap; further qualifying transactions first agreed within 12 months of the first Closing pay 15%. Eligibility and payment conditions apply, including the USD 100,000 Minimum Transaction, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.
If you understand how reversals work and know a company that clearly owns its records, register as a partner, check it against who qualifies and read the program terms before you introduce its decision-maker.