Residual Income Affiliate Programs are a great addition to any website or affiliate marketing plan because you'll get paid over and over again for effort you did only once in the past. The only problem is that you must depend on the merchant to not only track and credit you with the customers you bring to them for the initial sale, but to track and credit you with all re-orders if and when they occur in the future. There are different ways that merchants can track your returning customers and it's important to understand the differences so that you stay informed and get the money you deserve.

I would say that most merchants are honest and want to see their affiliates succeed.  If you're happy, they're happy! Unfortunately, there are those merchants out there whose affiliate programs are a non-priority and they simply don't track customers the way they should.  It's up to you as an affiliate to do your research on the merchant before you sign up.  Talk to a representative and feel them out or talk to other affiliates. What affiliate tracking program does the merchant use to track affiliates?  Try Googling it for online reviews.  But watch out for something like “Bob's Affiliate Program” where “Bob” will track your customers with a crappy website counter from 1997.  When the program just doesn't feel honest or high quality, steer clear.

Residual Tracking Method 1: Cookies

The most common type of affiliate program tracking is through the use of cookies.  Cookies are small text files that exist for a set period of time and that are placed on the customer's computer the first time they visit the merchant.  If they clicked through one of your affiliate links (usually includes your affiliate ID), the cookie will store your website name or affiliate ID as the referrer.  When the customer returns to the merchant at any point during the life of the cookie (duration determined by the merchant), the website will search for the cookie and credit you with the sale.

The problem with cookies however is that they can be blocked.  A small minority of customers incorrectly believe that cookies are dangerous and turn them off, preventing them from being placed on the computer.  This means that if they clicked one of your banners or text links to the merchant, no cookie would be created and no commissions would be coming your way if they made a sale. 

Cookies are fine for the initial sale when the customer purchases soon after they click your link.  But since cookies can be deleted and are only applicable to one computer, commissions become easier to lose over time.  What happens when a customer buys a new computer and then makes a re-order at the merchant?  What if the customer purchases a product while at work?  What about if a customer cleans up their computer and deletes the file?  You miss out on the initial sale plus future residual commissions in all these scenarios.  If the goal is to religiously earn residual income over the long term, cookies may become problematic.  Merchants tracking exclusively with cookies aren't the ideal situation.

Residual Tracking Method 2: Database Storage

A better way to track customer re-orders is for the merchant to store your affiliate ID with the customer in the database when they make the first order.  At this point any cookie that was used to track the initial sale is no longer required.  When the customer logs back in to the merchant and makes a re-order, the website knows which affiliate sent the customer to them in the first place and credits them with residual commissions.  And this occurs if they use a different computer or delete the original cookie. 

Database storage pushes the tracking responsibility to the merchant which is much more reliable than the customer.  If you've chosen a reputable merchant who uses a high quality affiliate program, there shouldn't be any problem with receiving your commission payouts.  For some reason, many merchants promote their cookie usage for the initial sale but fail to tell you that they actually store your affiliate information with the customer!  They really should be telling you about both because many merchants do in fact just use cookies to track residual commissions.  If in doubt, ask the merchant.

In Conclusion...

When it comes to affiliate programs paying residual income, it's important to consider the tracking method used to pay commissions.  While cookies are used by most merchants to track customers, it's those that also use some sort of affiliate database storage that are better over the long haul.  Look for this when you search for affiliate programs and you'll earn great residual income for years to come. 

Curtis Kopeschny, B.Sc. is a professional Web Developer and Internet Marketer with over 10 years of experience. His success in Affiliate Marketing has enabled him to work exclusively from home and help others earn a great income. He has written numerous articles about residual income, affiliate programs, and earning a living working from home and is an advocate of residual income affiliate programs as the best way to earn money long-term. He is co-founder of A1 Website Templates, a website with thousands of low cost and professional HTML and Flash web templates, and Residual Income Finder, a convenient human-edited directory that lists affiliate programs paying residual income (lifetime commissions).