Do You Have to Disclose a Code You Aren't Paid Per Sale For?

“I don’t actually make money off that code — I just got a free month” is one of the most common reasons people give for skipping a disclosure. It sounds reasonable. No per-signup commission, no per-click payout, no meter running every time someone uses the code — so what exactly is there to disclose? The Federal Trade Commission has already answered this question, and the answer doesn’t depend on whether your payout was structured as a percentage of sales. It depends on whether you got anything of value at all in connection with the recommendation. That’s a much lower bar than most people assume, and it catches a lot of arrangements that don’t look like “getting paid” in the everyday sense.

The test isn’t “commission.” It’s “material connection.”

The FTC’s Endorsement Guides (16 CFR Part 255) don’t use the word “commission” as the trigger for disclosure. They use material connection — any relationship between you and the company that a reasonable reader wouldn’t expect, and that could affect how much weight they give your recommendation. The FTC’s own Endorsement Guides FAQ is direct about how wide that net is: “if an advertiser — or someone working for an advertiser — pays you or gives you something of value to have you mention a product, that’s a material connection you need to disclose.” Note the phrasing: pays you or gives you something of value. Money is one path in. It is not the only one.

The FAQ walks through several forms this takes that have nothing to do with a per-conversion payout:

• Free product. If a company sends you the item you’re reviewing or promoting, that’s a material connection — full stop, regardless of whether you also get a cut of any resulting sales.
• Free travel or accommodations. The FAQ specifically flags trips and stays as needing disclosure “because it could affect how much weight your readers give your thoughts,” even when no money changes hands beyond the trip itself.
• Loaned or borrowed items. The guidance gives the example of a free car loan for a month — you have to give it back, you never owned it, and disclosure is still recommended.
• Flat fees. A company paying you a fixed amount to post about a product — with no relationship at all to how many people click, sign up, or buy — is exactly as disclosable as a percentage-based deal. The size and shape of the payment don’t change the duty; only the existence of a connection does.

The FAQ’s bottom line is blunt: “even an incentive with no financial value might affect the weight or credibility of an endorsement and would need to be disclosed.” If a free trial, comped subscription, or gifted product doesn’t clear the bar of “financial value,” almost nothing does — and the FTC says disclose it anyway.

Why “I’m not incentivized to lie” isn’t the exemption people think

The instinct behind “I don’t get paid per use, so there’s nothing to disclose” is usually genuine: if your reward doesn’t scale with conversions, you feel like you have no reason to oversell the product, so what’s the harm in staying quiet? But that reasoning answers the wrong question. Disclosure rules aren’t there because regulators assume every compensated endorser is lying. They’re there because a reader evaluates a recommendation differently once they know the recommender has any stake in it — even a stake that doesn’t grow with results.

A flat $200 sponsorship to feature a product once carries zero incentive to inflate future numbers, but it’s still $200 you wouldn’t have if you’d panned the product instead. A free annual subscription you got for mentioning a tool once is worth real money whether or not you ever mention it again. Readers reasonably want to know both facts, and the FTC’s standard is built around what a “significant minority” of the audience would want to know — not around whether the arrangement happens to create an ongoing financial incentive to keep promoting.

This is also why “I only got a free trial, not commission” collapses as a defense the moment you look at it from the reader’s side rather than yours. The relevant question was never “does this comp change your future behavior?” It’s “does this comp exist, and would a reasonable person want to know about it before weighing your opinion?” A free trial answers yes on both counts.

What this looks like for referral and coupon codes specifically

Most of the codes on referral-code and coupon sites are the classic per-signup kind — a reward paid only when someone actually uses the code — and that structure obviously needs disclosure, which is the ground covered in the FTC rules every referral-code sharer ignores. The trap this article is about shows up at the edges of that: a merchant that comps you a free account, a flat sponsorship fee unrelated to how the code performs, a “brand ambassador” product box that arrives whether or not you post about it that month. None of those look like a referral reward on the surface, and that’s exactly why people miss the disclosure duty attached to them. The FTC doesn’t care which bucket the compensation falls into. It cares whether there’s a connection a reader wouldn’t otherwise assume.

If you’re deciding whether to build around a customer’s open referral program or apply to a merchant’s application-gated affiliate program, our field guide to referral programs vs. affiliate networks covers how the payout structures and platform rules differ — but the disclosure duty doesn’t track that distinction either. A referral program’s free month, an affiliate network’s revenue share, and a one-off flat-fee sponsorship all clear the same low bar: something of value, connected to the recommendation.

The fix costs one sentence, same as always

Nothing about a non-per-use arrangement makes the compliant version harder. It’s still a plain sentence placed near the code or the recommendation, before or alongside it, not buried in a bio or a footer: “I received this product for free to try it out,” or “This company paid me a flat fee to write about their service,” or “I get a free month of this subscription for sharing my code.” None of those sentences require admitting to something shady, because there’s nothing shady about being compensated for content — the FTC’s entire framework assumes compensated endorsements are normal and legal. The only failure mode is doing it silently and letting a reader assume you have no stake in the outcome when you do.

This site’s own policy is the same regardless of how a code is structured — see our disclosure page for the plain-English version we hold ourselves to on every store hub.