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Payment and models

Recurring cap

Also called recurring cap, rebill cap, commission cap.

Short answer

A recurring cap is a limit on how much or how long a recurring commission runs – for example a maximum number of payments, a period or an amount per referred customer. The cap is set in the program terms and makes the store's total commission obligation finite.

Definition of Recurring cap.

A recurring cap can take 3 forms: a maximum number of payments (for example the first 12 invoices), a period (for example 24 months from the first purchase) or a total amount per customer. When the cap is reached, payouts stop for that customer – the subscription continues unchanged and the customer notices nothing, but no further commissions are created for the affiliate.

Stores set the cap to make the customer acquisition price finite. Without a cap, the commission obligation follows the customer's whole lifetime, and the total price of a referral is unknown when the sale happens. With a cap, the store can work out the maximum price per customer in advance and compare it directly with what a customer costs in other channels.

For the affiliate, the cap changes the value of a referral: it is the commission rate times the expected payments up to the cap. With low churn, the difference between a cap of 12 payments and no cap is large; with high churn, few customers reach the cap anyway, and the difference matters little in practice.

How it goes wrong

  • 01

    Recurring judged without reading the cap

    20 % recurring with a cap of 6 payments is a different deal from 20 % with no cap. Never judge a program on the word recurring alone – find the cap in the program terms before calculating the value of a referred customer.

  • 02

    Cap and attribution window mixed up

    The attribution window decides whether the click gets the sale at all, and runs from the click. The recurring cap decides how long renewals are then paid out, and runs from the customer's first payment. The 2 limits govern different parts of the agreement.

At Affilyflow

Recurring cap in practice

At Affilyflow the same principle applies to recurring terms as to the rate: an ongoing recurring agreement cannot be cut afterwards. A cap can therefore not be tightened for customers already referred – a change only applies to agreements created by new clicks.

Frequently asked questions

What happens when the recurring cap is reached?

Payouts stop for that customer. The subscription continues unchanged with the store and the customer notices nothing, but no further commissions are created for the affiliate. Commission already earned is not affected.

Why do programs set a recurring cap?

The cap makes the store's maximum price per customer known in advance. Without a cap, the commission obligation is open-ended and follows the customer's whole lifetime – with a cap, the store can budget customer acquisition precisely and compare the affiliate channel with other channels.

Can a recurring cap be changed retroactively?

At Affilyflow, no. An ongoing recurring agreement cannot be cut, so a stricter cap only affects agreements arising from new clicks. Customers you have already referred are settled on the terms that applied at the click.

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