Is it better or worse for affiliate links to be encrypted or have the tracking code hidden for SEO purposes?

With Commission Junction, and I think Shareasale, they always ask you if you want the link encrypted and/or hidden before you get your html code. I think I read Google frowns on one or both of those methods but I can't remember exactly? Anyone have experience/knowledge/thoughts on this?

The correct way to handle affiliate links is

You should not display the affiliate code as the link.

Doing so will result in less of a click thru rate which will mean a loss in potential revenue. The sample code below is one method of hiding affiliate links

<a onclick="parent.location.href='http://ww...

return event.returnValue=false"

href=http://www.SITENAME.com/URL/ rel="nofollow">ANCHOR TEXT</a>

You should also "nofollow" the link so you don't pass any PR to the affiliate site.

What is nofollow?

http://www.contemedia.com/blog/what-is-nofollow/

Good luck

Chadwick