UncleHoho

Account Executive

Commission clawbacks

I sell legal services. From time to time I close someone, who later ends up backing out or downgrading packages (even with signed contract/payment made). My company is super lenient about this and will typically refund them.

Here's the thing - I'm 100% commission. They pay me up front as soon as it closes, but then if someone backs out 5 months later, I get a bill/commission deduction. Is this normal? feels like BS honestly...I did my job but the company couldn't deliver so now I have to pay them back??

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✍️ Sales advice

26 comments

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sketchysales

Politicker

Sales Manager

Since you are 100% commission I feel it is pretty reasonable and the risk you take by being 100% commission. Ultimately I can see the companies side, if a customer backs out or downgrades further down the line, thats your responsibility, just like its my responsibility at my company, they are still my customer.

If you are not happy with the situation ask for salary.

Probably not what you wanted to hear.

sketchysales

Politicker

Sales Manager

Only other suggestion is you could try leaning on your management to be less lenient with contract changes?

UncleHoho

Good Citizen

Account Executive

I get what you are saying. It hasn’t really bothered me before, because frankly they pay me very well and losing one or two from time to time doesn’t hurt much. But lately they seem more lenient and I’ve had to repay thousands. Just gets old.

Good advice to have a talk with them about it.

sketchysales

Politicker

Sales Manager

You could maybe try to sell it to them? For example, is there any real business advantage to them being so lenient, does it secure accounts long term or help win over the competition? If it does then thats perhaps a tougher sell but if it offers little value, point that out to them and the fact it only hurts the company to be so lenient because they lose revenue and it hurts their sales team.

lowhangersalesbanger

Executive

Director of Sales

That long out seems a little unfair. I have worked in 100% commission sales before and we would get hit with clawbacks if they cancelled in the first 12 months but there were very limited circumstances where the customer could do that.

I think it is more normal to have a cutoff at 30, 60, or 90 days where if they cancel a deal after this that is not something you can be penalized for.

UncleHoho

Good Citizen

Account Executive

The people who make the decision also are paid by the hour. So it doesn’t effect them to downgrade the service tier or refund a client.

lowhangersalesbanger

Executive

Director of Sales

It's probably too late to do this but you may want to try and negotiate a system where the further you get from the signature the less they can take back. Or just a hard cutoff date

Kosta_Konfucius

Politicker

Sales Rep

Claw backs are normal unfortunately

oldcloser

Arsonist

💀

Taking a shot here: You've got someone in leadership scared to death of negative reviews. So, they gives the moneys back. Then they justify the clawback with "we can't pay commission on a deal we didn't get! Are you insane?"

The problem isn't with the clawbacks. It's that they don't pay you to work. Rally for salary! That's horsey turds.

UncleHoho

Good Citizen

Account Executive

Interesting take. Appreciate this!!

oldcloser

Arsonist

💀

If they won't pay you a salary they should harden up their refund policy, put it on the website and stand up for their service.

Sunbunny31

Politicker

Sr Sales Executive 🐰

Exactly this! They're awfully cavalier with your money IMO, and why wouldn't they be? It's not their money to lose.

UncleHoho

Good Citizen

Account Executive

Yeah. Sucks.

How would y’all phrase this? “Pay me a base salary or let’s set some perimeters around when we refund people.”

oldcloser

Arsonist

💀

This is fuqqing infuriating. Ask ChatGPT to tone down the following:
Your business model allows a refund for the asking. Which you honor out of my pocket. You don't pay me to prospect. You don't pay me to pitch. You only pay me when I close a deal. I can live with all of that. But stop giving my MF income back to your MF customers because you don't have the MF spine to stand up for what it is that I sell every MF day.

UncleHoho

Good Citizen

Account Executive

lol. Love that.

FinanceEngineer

Politicker

Sr Director, sales and partnerships

Depends on your contract. I have seen it done if it happens before a certain amount of time.

CuriousFox

WR Officer

🦊

You lost me at 100% commission.

jefe

Arsonist

🍁

Right?

Base for life

Justatitle

Big Shot

Account Executive

Is the refund typically issued due to sales promises not being met or company doesn't need the product? my curiosity here is where the usual refund comes from and if you would have a case against clawback

UncleHoho

Good Citizen

Account Executive

From customer having some sort of issue, not being able to fulfill rest of contract or downgrading because internal team doesn’t think they need higher tier after all. If anything I oversold them.

Justatitle

Big Shot

Account Executive

Hmm, that’s tricky then. If it’s oversold then there’s a case for the clawback

UncleHoho

Good Citizen

Account Executive

Oversold as in I sold them top tier option (bells and whistles)- not something they can’t use. Not lying about product ability or anything

Justatitle

Big Shot

Account Executive

yes, sorry for the vague response(multitasking) but if someone is oversold, (which as a salesperson you should try to squeeze every dollar possible), and the client comes back and says honestly we don't use xyz then the company has a case to come say that it should have been properly scoped and all...

Pachacuti

Politicker

They call me Daddy, Sales Daddy

100% commission means you get paid when your company gets paid. Clawbacks are part of the risk.

Don’t they have a time limit on when people can back out? 30 - 90 days? 5 months seems like a long time.

Diablo

Politicker

Sr. AE

You have to talk to your company.

We are very strict and we allow downgrades/cancellation only at the end of the term and we communicate this very clearly to our clients

Maximas

Tycoon

Senior Sales Executive

Damn I hate the 100% commission module,that scenario is never normal unless it's for a 100%.
Recommend you to demand a fixed base or leave it for another company at the same industry that will get you that,much of luck!

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UncleHoho

Commission clawbacks

26 comments

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