Referral fees refer to a payment made by one party to another in exchange for referring business to them. This type of fee is commonly used in real estate transactions, where a realtor may receive a portion of the commission from the seller or buyer's agent as a reward for bringing a new client to their agency. In other industries, referral fees can also be paid when one company refers business to another, either through an affiliate program or by making direct payments. The purpose of these fees is to incentivize the referring party to continue sending business to the recipient, thereby fostering a mutually beneficial relationship between both parties.