Refunds are part of running an app. A customer changes their mind in the first week, a store reverses a subscription, a card payment is charged back. If that sale earned an affiliate commission, the commission has to go somewhere, and where it goes depends entirely on whether you have already paid it out.
Insert Affiliate now handles the whole of that story, including the awkward part where the money has already left your account.
A refund reverses the commission it earned
When a sale is refunded, the commission on that sale is reversed by exactly the amount it earned, in the currency it was earned in. Nothing is estimated, and nothing is converted into another currency on the way.
What happens next comes down to one thing: timing.
Before payout, your hold does the work
Automatic payouts run daily, and each company sets a payout hold: a number of days a commission must age before it is eligible to be paid.
If a refund arrives inside that hold, it is applied immediately. The sale and its refund cancel each other out, and the affiliate is simply never paid for it. Nobody has to chase anything, because no money moved.
This is the single most useful setting on the page. Set your hold to cover the window where most of your refunds actually land, and the majority of them never become a problem at all.
After payout, the balance goes negative
If the commission has already been paid, the affiliate has the money. Their balance with you goes negative by the reversed amount, and three things follow.
First, any new commission that affiliate earns from you in the same currency cancels the negative balance before anything is paid. They are not paid again until they are back above zero, and only the amount above zero is ever charged to your card.
Second, the run detail lists them under skipped, with the reason given as refunds exceeding new rewards, and their page shows the negative balance. You can see exactly why somebody was not paid.
Third, and this matters: nothing is taken from the affiliate automatically. Unless you deliberately switch on recovery, that is the end of it. If the affiliate never earns from you again, the balance simply stays negative and you absorb it.
Refunds are confirmed before they count
A refund only reduces what an affiliate is owed once it has been confirmed with whoever owns the record. That means RevenueCat or Adapty for companies on those platforms, Apple or Google Play for companies on the native integration, and Stripe for web sales.
Confirming needs a read only key from you, added under Settings, Integrations: a RevenueCat secret API key, an Adapty secret key, or an App Store Connect API key. The Play service account you already use covers Android.
Until a refund is confirmed it is held aside and nets nothing. If it still cannot be confirmed after a day, it is flagged and shown to you rather than quietly applied. Every refund row in your affiliate search carries its state, shown as Validated, Validating, Not validated, or Unvalidated in light grey when there is no key for your platform. Your affiliates see a simpler version of the same row, either Validated or Validation pending. They are never shown anything about your configuration.
Apphud and Iaptic refunds are not currently supported.
Recovery, if you want it
Some companies are content to absorb negative balances. Others, particularly those with high value subscriptions, are not. For the second group there is an optional step.
Under Settings, Payments and Payouts, Payout policy, the Negative balances section lets you recover a balance that stays negative longer than a window you choose, thirty days by default. The switch only becomes available once your confirmation key is in place, because a refund that was never confirmed is never recovered.
With it on, Insert Affiliate notes the day each currency balance goes negative, lets new commission cancel it during the window, attempts to email the affiliate seven days before the window closes with the amount and the date, and then, if the balance is still negative on the due date, refunds part of the most recent payout you made to that affiliate through Stripe, working back through earlier payouts if one is not enough.
Nothing in the affiliate's history is deleted or rewritten. The refunded sales stay on their record with the settlement recorded alongside, their totals are recounted, and both you and the affiliate receive a summary of what happened.
What is never recovered
The limits here are deliberate and worth knowing before you switch anything on.
Recovery never takes more than the reversed commission, and never more than the affiliate actually received after Stripe's processing fee, so that fee stays where it was. It applies only to refunds reported by Apple, Google Play, RevenueCat, Adapty or Stripe, so a refund you report yourself through the API or record by hand reduces what is owed but is never recovered. Payouts made before recovery existed do not carry the reference it needs, so those carry forward instead. Bonus payments are never reversed. Anyone you paid outside Stripe has nothing to refund, so their balance carries forward too.
Recovery also only ever applies to affiliates who have accepted the current terms, which set out the recovery clause in full. Existing affiliates are asked to accept them the next time they sign in, and until they do, their balances carry forward rather than being recovered.
Pick the settings that match your refund rate
Most companies should start with the hold, not with recovery. A hold that matches your real refund window solves the problem before it exists and needs no explaining to anybody.
Add your confirmation key next, because it improves the accuracy of every refund whether or not you ever recover anything. Recovery is the last step, and it is genuinely optional. It exists for companies whose numbers justify it, and it stays off until you decide otherwise.