When a customer makes a purchase via the affiliate link (or tracked by cookie after a while) or using an affiliate coupon, as long as that order is marked as paid, a referral order will be recorded.
The system will send an email to the merchant to notify him about the referral order. The new referral order status will also be shown on the Affiliate Referrals tab for the merchant to review:
The merchant can either approve or deny that referral order.