Getting Started with Referral Rewards
Referral Rewards Overview
Wooly’s Referral Rewards feature is an excellent way to show your appreciation to advocates for driving word-of-mouth sales to your store. If you are already using Sales Attribution to measure your advocates' referral performance, then you already have the foundation in place to generate referral rewards and pay advocates all within the Wooly platform. If you are new to Sales Attribution, be sure to read our guide on setting up the referral link pixel and the order tracking pixel.
Referral Rewards are enabled at the Program level, giving your brand full control over which advocates are eligible for rewards. The first type of Referral Reward available in Wooly is referral commissions. We are exploring additional Referral Reward types including referral milestones and advocate loyalty.
Referral commissions allow you to designate how much an advocate will earn for each referral. For example, if your brand’s VIP Program offers a 10% commission on referred orders, anytime a customer makes a purchase using a referral link or shareable discount code belonging to an advocate in the VIP Program, the advocate will be credited with a 10% commission.
This guide is divided into the three steps:
- Step 1: Configuring a Program's Referral Rewards
- Step 2: Integrating with PayPal Payouts
- Step 3: Managing Referral Rewards
Step 1: Configuring a Program's Referral Rewards
The first thing you will want to do is determine which program(s) will be eligible for referral commissions. Examples of programs that often have commissions include Influencer Programs, Affiliate Programs, and VIP Programs (these are typically an elevated tier of Ambassadors who are eligible for more perks.)
To enable Referral Rewards, navigate to Programs > Program Settings > Referrals.
Setting the Commission Structure
The commission structure is comprised of the Commission Type and the Commission Value. Select whether commissions will be calculated as a Percentage of Sale (e.g. 10%) or a Fixed Amount (e.g. $25) per referral.
Percentage of Sale is the most commonly used option for brands. The order's subtotal is used to calculate the commission amount. The order subtotal is the total of all items, minus any discounts, but before taxes and shipping are added. For example, if the items total is $100.00 and a 20% off coupon was used, the order subtotal would be $80.00.
Fixed Amount is most commonly used by brands that have a relatively small number of products and are priced such that offering a fixed amount per order will result in the best experience for both the brand and the advocate.
📱The Advocate's Experience
When an advocate who is in a program that has Referral Rewards enabled logs into the Advocate Portal, they will see a message informing them that they are eligible to receive commissions on referrals.
Selecting Payment Methods
The payment methods you select will determine from which options advocates in the program will be able to choose as their preferred payment method. Most brands provide advocates with the option of receiving payments through either PayPal or Venmo.
PayPal is a great option to select whether or not you plan to use Wooly's integration with PayPal Payouts. If you integrate with Wooly, you will be able to pay advocates without having to log in separately into PayPal. If you are unable to use Wooly's PayPal integration, you can still collect PayPal and Venmo info from advocates and use PayPal's web interface to send advocate payouts.
It is possible to send Venmo payments to advocates through the PayPal Payouts integration. When selected, advocates are able to select Venmo as their preferred payment method and receive payments directly to their Venmo accounts. Your brand does not need a Venmo account to use this payment method.
📱The Advocate's Experience
When an advocate who is in a program that has Referral Rewards enabled logs into the Advocate Portal, they will be prompted to select a preferred payment method from the list of Payment Method options you selected in the Program's referral settings. In the screenshot below, the advocate selected PayPal and provided their PayPal email address.
Step 2: Integrating With PayPal Payouts
The most common method that brands use to pay their advocates is PayPal. Using PayPal Payouts, brands are able to send payments to multiple advocates in a single batch.
PayPal Payouts can take anywhere from a day to several weeks to get fully set up, so it is important that you start the process right away to avoid any delays in payments to your advocates.
Refer to our PayPal Payouts integration guide for step-by-step instructions on setting up PayPal Payouts to automate advocate payouts in Wooly.
Step 3: Managing Referral Rewards
Once Referral Rewards are enabled for a Program, rewards will automatically be created for any referred order driven by an advocate in the program. To view Rewards, click the Rewards icon in the left-hand menu.
Rewards start out with a Pending status and can either be marked as Approved or Rejected. After a reward has been included in a payment, its status will change to Paid.
Approving Referral Rewards
You can view the list of all rewards that require approval by navigating to the Rewards page in the Brand Portal. Pending rewards can be approved or rejected. Clicking on the green checkmark set a reward to Approved. Approved rewards are eligible for payment and show up on the Unpaid tab of the Payments page.
As a best practice, only approve rewards for orders that have exceeded your store's return policy (e.g. if your return policy is 30 days, wait until at least 31 days to approve the reward). Use the order date filter to exclude rewards that haven't yet reached your store's return policy.
Rejecting Referral Rewards
There could be several reasons why rejecting a referral reward might be warranted, such as if the original order has been canceled, if it has been determined that the advocate's discount code was leaked to deal sites, personal orders, or other conditions that might go against your brand's referral guidelines.
Undoing Approved or Rejected Rewards
Rewards that have previously been approved or rejected, but not yet paid can be reset back to Pending. This might be helpful in the case when a reward has been approved, but you later discover that the order was returned.
Handling Refunds and Cancellations
For brands using Shopify, refunds and cancellations are handled automatically. Orders that have been fully refunded or cancelled are excluded from reports and dashboards (e.g. Sales Attribution Report, Referred Orders Report, etc.).
If a referral reward was created for the original order, but a payment has not been sent, the referral reward will be deleted (fully refunded and cancelled orders) or updated to reflect the new amount (partially refunded orders).
If a referral reward was created for the original order and has already been included in a payment, a negative referral reward will be created in pending status. You can then choose to approve or reject it. If the negative referral reward is approved, it will add a negative amount to the payee's balance. The payee will be ineligible to receive payments until they have a positive balance. It is not possible to take or request money back from a payee.
For brands not using Shopify, if an order that generated a referral reward gets fully refunded or canceled, you will want to reject the reward. If the reward has already been paid, you can create a Manual Referral Reward and set the reward to a negative number. This will act as a negative balance for the advocate which must be paid down by subsequently approved referral rewards before the advocate is able to receive another payment.
Now that you have an understanding of how referral rewards are created, the next step is to review the Getting Started with Referral Payments to ensure you have everything set up and ready to go when it comes time to send your first batch of payments.