Does having many 302 redirects on a site hurt rankings?
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I am working with an affiliate website which has many product listings but the "Buy Now" button on each product listing is an external link (affiliate link) to the appropriate product page on the actual website where the product can be bought. Each of these external links passes through an internal redirect, which is implemented as a 302.
Consequently, when SEOmoz crawls that site, it gives me a warning that there are hundreds of 302 redirects on the site. Do you think this will hurt the site's potential to rank? Should I remove the redirects and leave them as direct links to the external site?
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A 302 is designed as a TEMPORARY redirect.
How temporary? I like to think of it in terms of hours. That makes it a lot clearer when thinking "how long is too long". For the most part, 302's should not be used. There are some corner cases where a 302 is the best solution, but in my experience most of the times 302s are implemented inappropriately and should not be used.
A 302 is harmful to your rankings as it prevents your PR from flowing naturally throughout your site. If you are using a 302 for internal linking, you are definitely damaging your SEO. For external links, a 301 is used when the content has been permanently moved to a new location. I am a bit confused regarding your implementation of a 301 for a "buy now" button. That sounds more like a direct link, and I am not clear why a redirect is being used.
A final point. Affiliates pointing to their master site should use nofollow links to be compliant with Google's policies.
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