
When a customer refunds your paid app, Apple refunds its 30% cut [edited] - tomduncalf
https://twitter.com/twolivesleft/status/1288344977169235968
======
elliottkember

      I was mistaken in my original (now deleted) tweet and have been corrected by a few people
    
      Apple does not keep the 30% commission on a refund the refund happens as you’d expect. I don’t know where I got the idea that it worked the way I thought it did
    

This was a follow-up by the tweet's author.

[https://twitter.com/twolivesleft/status/1288625617873694721?...](https://twitter.com/twolivesleft/status/1288625617873694721?s=21)

~~~
Vervious
Misinformation really does spread like wildfire. Even with the number of
naysayers on Hacker News we still seemed to have had a lapse in critical
thinking.

I've been wanting to get into research on the study of the spread of tweets
like this. Anyone have pointers for reading material?

~~~
xuki
I have sold apps on the App Store for a decade now, and I have to admit I did
believe the original tweet. I was going to go through the financial reports
during the weekend to verify, but the initial reaction was “of course they
would do this, it’s Apple”.

~~~
dhsysusbsjsi
The fact this tweet is so believable says something about how poorly Apple has
been treating its developers the last decade.

~~~
mr_toad
Or it just says something about confirmation bias.

~~~
celticninja
Confirmation bias is usually as a result of previous behaviour allowing us to
make assumptions about how something would respond/act. Confirmation bias in
this situation is because it sounds in line with how Apple operate elsewhere.

------
chadlavi
Payment processors generally don't refund fees on payments when the payments
are refunded, this isn't new. It's remarkable mainly because (a) it's 30%, not
3% and (b) the App store doesn't position itself as a payments processor the
way Stripe does, so it sounds really weird that they would act like one.

If the app store took a 3% chunk and never refunded it regardless of the
ongoing status of the transaction, that would put them right in line with
other payment processors. It would also still net them billions of dollars, I
think!

~~~
gamblor956
Credit card companies (i.e., Visa, Mastercard) absolutely do refund fees on
payments when the retailer processes a refund. This is why retailers generally
require you to use the same method of payment to get your refund.

It's uniquely _online_ processors that do not refund fees.

~~~
saurik
My experience with PayPal was that they almost always gave me my fees back
when I processed a refund (there were corner cases where that didn't happen);
it is possible the rules changed or that I am misremembering the extent of the
cases when they don't, though (I haven't processed payments in a year and a
half).

~~~
theturtletalks
Paypal about a year ago changed their policy that they would keep the credit
card processing fees for refunded orders.

------
wlesieutre
Does this mean if there's a developer I don't like, I can buy their stuff and
refund it to arbitrarily cost them money at no cost to myself and there's
nothing they can do about it?

That seems ... not great, especially these days. What happens when mobs of
internet morons decide review bombing isn't sufficient and realize Apple will
help them cause direct financial harm instead?

~~~
jclardy
I think this is part of what is holding back iPad software. You can't charge
$100 for Sketch and lose $30 when someone asks for a refund. Apple designed
this around $1-$10 apps where losing $2 at volume is fine.

What is worse, is that Apple doesn't remove the app from the user's device.
When you get a refund of a paid app it is on the honor system for them to
delete it. It is removed from their account, so they can no longer
download/update, but the installed binary is not affected.

~~~
snazz
I'm glad that Apple can't remotely delete apps from my device. It would be
somewhat dystopic if they had that capability.

~~~
Dylan16807
But they could make the refund wait until you do!

It wouldn't be foolproof in case of backups but it would be a lot better than
an honor system.

~~~
snazz
That's true; that would be the better solution. Requesting a refund before
deleting the app would give the user an error message telling them to delete
it.

~~~
tadfisher
With the corner case that if the user no longer has access to a device with
the app installed, they cannot get a refund.

~~~
dathinab
If you lose the product you bought you can generally not get an refound ;=)

And doesn't apple have some form of remote logout/factory reset feature for
lost devices?

EDIT: (Sure requiring remote factory reset for lost devices would not work if
it's a iPad which has not internet connection and never gets one again in it's
live time, but that would be an acceptable corner case I thing).

------
tomduncalf
Had a look and it seems that Google do refund the transaction fee, which I
think adds weight to the argument that is unfair behaviour by Apple:

[https://support.google.com/googleplay/android-
developer/answ...](https://support.google.com/googleplay/android-
developer/answer/2741495?hl=en-GB)

"Google will return the transaction fee to you. You'll see the returned
transaction fee on your next earnings report."

~~~
hn_check
"which I think adds weight to the argument that is unfair behaviour by Apple"

Apple takes back from the developer exactly what they gave the developer. This
has been verified by a number of people, and this submission is just
farcically wrong.

How is this nonsense front page on HN? Is this community this clueless?

~~~
smarnach
Do you have any sources for your claim? The original claim - i.e. developers
lost money for each refund - is backed not only by the original post, but also
by several other sources linked in the comments.

~~~
hn_check
Which sources would those be? Someone linking to preliminary text of Apple's
refund policy when they were forming the app store in 2009? Because that is
meaningless.

Apple takes back exactly what they gave the developer. There are _zero_
sources demonstrating otherwise (and the source of this links a basic sales
chart -- guess what, that doesn't prove his point whatsoever). There are
literally a half dozen developers replying to him countering his claim, yet
it's remarkable seeing the gullibility of this crowd regarding a simply absurd
claim.

The guy's trump card is that they had "negative days". No shit. One day they
had more refunds than sales. That doesn't mean Apple is taking an extra 30%.

EDIT: Even the Reddit story on this absurd tweet now has a top comment
refuting it, and a wide acknowledgment that they need to be more discerning.
HN -- all the top comments are falling in line. My two comments are at -1.
LOL. My bio that this place is Dunning-Kruger demonstrated writ large holds
true. What an embarrassment.

~~~
rattray
cc @dang

~~~
xvector
He is caustic but not wrong. If anything, this story should be taken down.
It’s factually incorrect and even the tweet in the link has been deleted.

~~~
rattray
Calling people idiots without citing sources is really unproductive. If you're
right, cite sources, so folks can be educated. Trusting a random hn user who
doesn't back up their claims is something even @hn_check would scoff at.

------
andreasley
A Statement of Tim Cook for the House of Representatives claimed that "For the
vast majority of apps on the App Store , developers keep 100% of the money
they make." [1]

How can this be even remotely true if Apple takes a 30% commission for every
sale in the App Store?

[1]
[https://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG...](https://docs.house.gov/meetings/JU/JU05/20200729/110883/HHRG-116-JU05-Wstate-
CookT-20200729.pdf)

~~~
kevin_b_er
Its wily political speak. The devs keep 100% of what they make. What do they
make? 70% of the price on app store.

They keep 100% of the 70% of the store price. Truthful statement, just one
that is designed to mislead you.

~~~
WA
This. Plus: most apps don’t make money. It’s easy to keep 100% of zero.

------
bronzeage
App stores need heavy regulations. It's not only Apple but Google and even
steam to a small extent. Apple is of course the biggest offender as they
heavily guard their monopoly with code signing enforcement. This shouldn't
have been legal. They are the very definitions of predatory competition
squashing monopolies.

~~~
ryanlol
Why do app stores need separate regulations?

> They are the very definitions of predatory competition squashing monopolies.

But they aren’t, this is a rather competitive space.

~~~
jlmorton
Competitive? It is an oligopoly with tacit collusion on price fixing. This is
the exact reason why anti-trust legislation exists.

A competitive market would be one in which the platform providers were forced
to divest from the app markets, and support competing app markets which meet
requirements, and which actively compete on features and price.

If cars only supported gasoline from manufacturer gas stations, and 95% of the
market was controlled by cars from GM and Ford, and once you bought a GM car
you could only buy gasoline from a GM gas station, would you call the gasoline
market competitive?

To extend the metaphor, let's say it was technically possible to use third-
party gas stations, but the manufacturers had hidden this ability, and it
required a small amount of mechanical knowledge to enable, and maybe voided
your warranty, would you then consider the market competitive?

~~~
briandear
Can you prove price fixing? Or collusion? If you want to make the claim, then
let’s see the proof.

~~~
alias_neo
What options are there? Google Play, Apple App Store.

How much do they take? 30% and 30%.

Is there an option where they take less than 30% or where someone can compete
on that cut? No.

Is there a different store you can use with the same privileges as these two
stores? No.

Can you take your payments outside of the store and manage payment fees
yourself so as to not give them 30%? No.

~~~
noisem4ker
I doubt it's news to you, but Android openly allows app stores other than
Google's.

~~~
alias_neo
It's does, but between Google's certification process putting restrictions on
device manufacturers and the fact that usually those alternative app stores
can't be installed from Google Play, asking side the untrusted sources scare
tactic against users, and Google Play protect so closely integrated in the OS
now, theyre not really viable market places.

At best I guess we could say Google has a carrot approach where Apple prefers
the stick.

------
bloomboom
It’s amazing that a decade and a half later Apple still hasn’t fulfilled Steve
Jobs’ original dream of merging the web and apps.

He wasn’t saying third party apps should be HTML5 just to stall for time. He
really believed it. And it was a good idea and still is.

Processors, memory, bandwidth, and browsers have all advanced by leaps and
bounds and yet the dream remains unrealized and Apple is the most to blame.
They got addicted to the ill gotten gains of their walled garden and can’t
bring themselves to kick the addiction. Rent seeking is a powerful force.

It’s pathetic for a company so good at being honest with themselves and moving
forward when they know what the best future is.

The App Store shouldn’t exist at this point. It has outlived its usefulness.
It’s in their users’ best interests to move beyond it. And yet maybe it’s too
traumatic and daring a move for anyone other than Steve Jobs to attempt.

Tim Cook could drop the headphone jack because it didn’t damage the bottom
line but dropping the App Store would actually cost something in the short
term even if it is the right thing to do for everyone in the long term.

~~~
conductr
I think they were creating a walled garden and this was just lip service.
Blaming it on state of tech/HTML5/etc was easy. The app store could be open
from administration/censors and thus would function exactly like the web even
if native code was required. The frustrating part of current state is they
censor who, what, and how can be brought to market and the 30% cut is just
egregious.

------
davidwhodge
This does not match my experience with my App, Nikola. I've been able to match
up the transactions and refunds as 1 to 1, price-wise.

~~~
tomduncalf
Interesting. I wonder if it varies from region to region perhaps? Going to do
a bit more research as this guy seems quite convinced they are taking the cut
but evidently you’ve experienced otherwise!

~~~
davidwhodge
Yeah I'm not sure what the discrepancy is. This afternoon I'm going to dig a
bit more into my records.

In my data right now I see a few examples of an $80 purchase match to $56 in
proceeds (70%) matched to $56 of a refund.

I can't say I think the 30% fee is appropriate anymore, but this particular
case being made about refunds does not appear to be accurate for me at least.

~~~
tomduncalf
Could be that this developer is confused, maybe the way Apple represent the
data is confusing in the records or something... in which case my apologies
for spreading false information, but he seemed pretty convinced!

------
xhruso00
Tweet is unavailable (deleted). Backup
[http://archive.is/wqWYK](http://archive.is/wqWYK) New twitter link:
[https://twitter.com/twolivesleft/status/1288625617873694721?...](https://twitter.com/twolivesleft/status/1288625617873694721?s=21)

~~~
ec109685
This wasn’t true:
[https://twitter.com/twolivesleft/status/1288625617873694721?...](https://twitter.com/twolivesleft/status/1288625617873694721?s=21)

Recanted there. People need to think more critically.

~~~
xsmasher
Ugh. This factoid is now stuck in a bunch of memories though, and they're
swear it's true the next time it gets debated.

~~~
anonytrary
To go deeper into the rabbit hole, lots of people dislike Apple, so this tweet
could have been a calculated effort to further tarnish Apple's reputation.

Plan:

1\. Create fake news that X people see.

2\. Wait until X is large.

3\. Delete fake news, use "plea ignorance" apology to save face, that Y (Y <<
X) people see.

Congrats you now have a large number of people who now have an even worse
opinion on the subject of the news. Repeat steps to cause even more damage.

~~~
threeseed
Or be like the Hey app.

Pretend to be the victim, whip up a whole lot of free PR sympathy and then
make the minor change to the app and resubmit whilst no one is paying
attention.

------
chrisjarvis
Has anyone confirmed this is true (or is this tweet the only source...)?

[https://developer.apple.com/forums/thread/105454](https://developer.apple.com/forums/thread/105454)
"Apple has the RIGHT TO withhold"
[https://news.ycombinator.com/item?id=23989256](https://news.ycombinator.com/item?id=23989256)

It seems you can only get a refund by reporting a problem, which means if your
app works as described you shouldn't be able to request a refund.

~~~
gruez
Here's a second source: [https://techcrunch.com/2009/03/25/apples-iphone-app-
refund-p...](https://techcrunch.com/2009/03/25/apples-iphone-app-refund-
policies-could-bankrupt-developers/)

~~~
xsmasher
That article is also talking about what apple COULD do - it doesn't say apple
is actually doing it.

------
rs23296008n1
So to update and add to their old slogan: _Think different... but we still
keep our 30% cut_

Tech in general has quite a few things about itself it needs to fix. Is it
ethical for Apple to write the OS, run the store, sell its own wares AND
compete with people it charges, eg 30%, to compete? Same question for other
stores, eg Google? Both companies have analytics to determine which of the
crop is successful and therefore needs to be harvested. Is this a level
playing field? Do we expect such? Should we?

These aren't trivial or straightforward issues. It will be interesting to see
over the _next 20 years_ how this plays out. It would be better with a shorter
time frame but... nothing involving legalities is usually fast.

~~~
Spivak
Charging 30% to competitors that it doesn’t charge to itself isn’t really a
problem because of opportunity cost. If an Apple product takes revenue from a
competitor that’s paying them 30% then they still have all the costs of
running their competing service and make less money from their 30% cut. The
margins have to be really good for such a thing to be worthwhile.

------
glofish
Reading the thread here is an interesting datapoint:

[https://twitter.com/twolivesleft/status/1288491970248077314](https://twitter.com/twolivesleft/status/1288491970248077314)

\- Since 2011 Codea has had 1,768 refunds

\- Estimate it cost us ~$8,000 USD to pay Apple’s 30%

\- A single day in 2017 saw 193 returns and I have no idea why or how that’s
possible

later:

> _Yes, we’ve had a few days of negative revenue in the last few years due to
> people refunding Codea. Apple keeps their 30% no matter what_

------
brokencode
Apple keeps on abusing their dominant market position to make huge profits at
the expense of small developers. They subject apps to huge fees, then release
competing apps at the same price (such as Apple Music). They prevent companies
from selling ebooks on from their apps without taking a huge cut, again,
despite the fact that they have a competing app in iBooks. These are perhaps
the most egregious examples, but the list is very long of other complaints.

How long will they get away with this before antitrust regulation kicks in?
They are so focused on extracting rent that they keep on poking this sleeping
bear, and it eventually will be a huge problem for them. If they don’t reverse
course, expect to see large reductions in their profits and stock price when
this happens.

------
toyg
App Stores are doing to software developers what supermarkets did to food
producers and most other manufacturers: moving all power and profit to
distributors.

It is somewhat ironic that so many people who helped so many other sectors
disintermediate again (by building websites), are now busy actually
intermediating their own.

~~~
cblconfederate
The Web isn't. Sir TBL doesnt get a cut from your sales.

Why developers even use the app stores baffles me

97% of user's time is spent using the 10 top mobile apps

Average user downloads ~0 apps / month

PC sales are up last year and more this year with COVID

Who makes money?

~~~
oarsinsync
Assuming your numbers are accurate, 3% of users time is spent on non-top-10
apps.

There are 3.5 billion smartphone users. [0] Smartphone usage statistics
suggest that an average person spends 2 hours and 51 minutes per day on their
mobile device. [1] This works out to a cumulative total of 3.6 trillion hours
of use per year. 3% of that time is 109 billion hours a year in non-top-10
apps.

You might not become a millionaire with your app being part of the 3%, but
there's still real money there.

[0] [https://www.statista.com/statistics/330695/number-of-
smartph...](https://www.statista.com/statistics/330695/number-of-smartphone-
users-worldwide/)

[1] [https://leftronic.com/smartphone-usage-
statistics/](https://leftronic.com/smartphone-usage-statistics/)

------
hn_check
This isn't correct at all.

This is a serious misunderstanding by someone in a pretty incredible way.
Literally a single person claiming this and _multiple_ people refuting it from
their own experience.

Yet it's top of HN. Amazing. A lesson to never, ever trust anything here
because the masses clicked an arrow.

~~~
FabHK
> A lesson to never, ever trust anything here

FWIW, it's been corrected in less than 18 hours.

Conclusion: You can continue to blindly trust everything here (provided you
check a day later)

;-)

------
bronzeage
I also argue that it's the heavy commissions which push nearly every App to an
ad based model, or physical services Apps which don't charge anything.

This in turn shifts more and more apps in the direction of invading our
privacy with invasive ads libraries, leading to also worse privacy as a
consequence. It's already pretty hard to convince users to pay for an app, the
30% cut almost guaranties it will be a bad business model.

------
ikeboy
Amazon does the same thing. You can lose more on a return than you make on a
regular order. Amazon makes more on many orders than sellers do.

~~~
ejo4041
Amazon FBA seller here. I came to look for the Amazon comment. Their returns
are pretty messed up and hurt the sellers. Customer can return for any reason
and the seller has to eat it. Often times it is very hard to track returns
down if people return the wrong stuff. If it's broken or damaged, amazon will
side with the customer 100% of the time. On top of all that, if you dispose of
a damaged, non-sell-able item, they will list it in amazon warehouse, we agree
to that in the TOS by having an FBA account.

If someone knows how to work with their system better regarding returns, let
me know.

~~~
meed2000
I stopped selling on Amazon nearly 10 years ago. FBA was a newly introduced
feature which was the trigger for me see Amazon's disrespect for 3rd party
sellers.

They skim the seller for the sale (because they do the marketing for you).
They skim on payment processing (it costs them less than they charge) They
skim for exposure (ads are almost a must have to ever appear in search
results). They then skim on delivery via FBA (they charge more than it costs
them). And they skim on warehousing via FBA (the pricing was already
unbelievable back then).

Fast forward 10 years, they have started to skim sellers off their business
analysis and risk taking effort (They have the data, and will compete with 3rd
party sellers on products that sell decently enough, and even place their
product before yours).

I've recently taken the time to edited and publish a book that is in the
public domain, on their KDP platform, a few days later I see that Amazon is
selling that same book and even redirect customer clicks from my page
description and book cover to their line item to buy.

Amazon has no limit.

~~~
mthoms
>a few days later I see that Amazon is selling that same book and even
redirect customer clicks from my page description and book cover to their line
item to buy.

Can you expand on this? I'm not sure what you mean exactly. Is Amazon
redirecting direct links to your free book to a non-free version?

------
jmull
I'm a little stuck on the terminology here.

Does "customer refunds your paid app" mean the customer requests and gets a
(full) refund from Apple for a prior app purchase?

(I would say "returns" not "refunds" ... Apple is the one refunding, not the
customer. The customer receives the refund. But I guess this is some kind of
regional/informal usage I'm not familiar with.)

If so, that's BS. Apple could reasonably keep transaction costs of something
like 5%, but the full 30 is crazy.

~~~
sbarre
As per the thread:

You buy an app for $10, Apple gets $3, the developer gets $7.

You refund the app (through the Apple App Store), you get your 10$ back, but
that whole 10$ comes from the developer, unlike the 7/3 split when you first
purchased it.

So in the end, the developer has lost money due to the refund.

~~~
Spivak
This is just sales commission rules though.

If I get a 30% commission for a sale when the customer is referred by me and
at some point in the future the customer asks for a refund I don't give my
commission back. Our transaction was done when the original sale was made.

~~~
LanceH
Apple doesn't refer a sale. Apple makes the sale. They are the store,
something they have set up and enforced.

The developer has no capacity to deny a customer, yet has the responsibility
for the bad customers shopping someone else's store.

~~~
genidoi
Devils advocate argument: A refund (probably) reduces the LTV of customers,
and Apple has no control of the cause of those refunds, whether it be a buggy
app or misrepresenting features.

The ethics of this scheme are debatable but it should be assumed that some
refunds are legitimate and Apple loses tangible customer $LTV from some
refunds.

------
krick
I guess in Europe iStuff isn't as overwhelmingly popular as in USA, so when I
hear things like that I am always amazed at how could anyone (a developer) in
their mind ever cooperate with Apple. Even writing and getting a new app to
their store is a huge feat, they take a huge cuts when you make money, and
when you don't they can charge you "30% of what you could make" anyway. This
is just absolute nonsense.

------
conductr
So, they do have an incentive to let the iTunes fraud continue. Seems like a
couple times a year one of my families accounts is hacked, they spend $100s
and we have to dispute. We get the money back but it's costly to the devs at
30%

~~~
lukeramsden
I would assume fraud would be fully refunded, no? This is more about
legitimate Apple-sanctioned returns, not fraudulent transactions. I may be
wrong, but I hope I'm not lol

------
atarian
I don't understand something here.. let's say I sold an app to someone for
$100.

1\. Someone pays me $100.

2\. Apple takes 30%, so I only get $70.

3\. Customer asks for refund and gets back $100.

4\. Apple takes back the $70 from me.

If Apple was skimming 30% off from the start, how does that affect me during a
refund?

~~~
sandyarmstrong
The tweet claims that step 4 is "Apples takes back $100 from me." So you have
to cover Apple's share in the refund.

~~~
valuearb
The tweets claim is false.

~~~
marcinzm
This is Apple's US terms for developers of paid apps:

> You shall reimburse, or grant Apple a credit for, an amount equal to the
> price for that subscription. Apple will have the right to retain its
> commission on the sale of that subscription, notwithstanding the refund of
> the price to the End-User.

If you disagree, please cite a source.

~~~
xsmasher
Apple says they have that right, but I have not seen them do it.

Here's apple deducting a refund from me in 2010, and the amount is exactly
what they paid me. [https://imgur.com/a/KwKlMXh](https://imgur.com/a/KwKlMXh)

First screen shot is a week with one refund (-$1.40) and ten sales ($14.00
proceeds).

------
cmurf
Purchase: Customer pays $10. Apple keeps $3. Developer gets $7

Refund should be: Developer has $7 deducted from current owed "royalties"
Apple refunds $10 to the customer.

Is Apple actually taking $10 from the developer and giving it to the customer?
That would be theft. The developer is not obligated to cover refunds beyond
the profit/royalty they originally made on it.

~~~
philipodonnell
> Is Apple actually taking $10 from the developer and giving it to the
> customer?

That is exactly what is happening.

------
cosmodisk
It's not just Apple. Look at the state of business app stores: appExchange
(Salesforce), Slack, Jira plugin marketplace,and so on. They are all milking
as much as thry can.

------
taylodl
Add this to the long list of how the App Store doesn't serve the needs of
application producers are their customers, and because the needs of these very
important members of the app ecosystem aren't being served it really isn't
serving Apple as well as it could either.

~~~
ntsplnkv2
Their customers are not developers, never have been, and never will be.

We see what "serving developers" has done to the web in general - a genuine
mess. Perhaps the fee is a bit much and the refund should come with a return,
but as an apple product owner, I like the general experience of my iPhone and
its app stores, and I don't want them to cater to devs over me.

------
gregoriol
Not saying it's exactly the same situation, but Stripe keeps their fees when
you refund a payment

~~~
sukilot
It's not the same at all. Payment processing is work, regardless of direction.
Marketing fees for non-sales is payment for nothing.

~~~
andrewxdiamond
....but Apple processes payments for App Store purchases? And they pay to
maintain the store. Storage, bandwidth, updates, those are all “work” as well.
I do think 30% is quite high, but this comment seems to consider Apple a
charity house that should provide these services for free

~~~
latortuga
Don't forget that Apple takes a yearly developer license. You're claiming that
the 30% cut that they keep on a refund is used to cover payment processing
(typically priced around 3%) and the marginal cost of the bandwidth to
distribute that single copy of the app? Even for $0.99 apps that price is
outrageously expensive. AWS, notorious for their high bandwidth pricing, costs
~2 cents per GB on S3. This is 33 cents for a dozen MB.

Nobody is saying Apple shouldn't get paid here, but keeping 30% is insane.

~~~
andrewxdiamond
A product or service is worth what people will pay, not what it costs.

------
rhacker
This blew up, but like 5 comments down in twitter someone said it wasn't true.

~~~
ladon86
It is true, and I don’t see anyone on that thread saying it’s not. I see a guy
confused about whether it’s the consumer or developer that eats the fee - it’s
the developer.

This is exactly how it works:

* Customer pays $10

* Apple owes developer $7 (to be paid in 4-6 weeks)

* Customer asks for refund, Apple sends them $10 back

* Developer owes Apple $3

~~~
valuearb
It’s not true, I’ve been selling apps on the App Store fir ten years, never
happened to me.

~~~
ladon86
I believe the real answer is that they do keep it (at least sometimes) for
chargebacks but not for regular refunds.

I've seen the discrepancy in our own accounting, and as mentioned elsewhere,
it's in the App Store terms. But Apple's dashboard doesn't show a clear
difference between chargeback and refund, and maybe that's where the story
originated.

HN won't let me amend my comment above, but I stand by the claim that this
happens on chargebacks. Otherwise the App Store Connect numbers don't add up.

I think the truth has some nuance, but that doesn't work on the internet, it's
got to be either an outrageous story or "total fake news".

------
perfectstorm
People keep talking about 30% cut but it's actually more than that if you look
outside of U.S.

Apple takes more than 30% cut for in-app purchases made in other countries.
For example, an in-app-purchase (IAP) you sell in USD for $15.99 is translated
to 1249 Indian Rupees and you get a proceed of 741 Rupees which is only 59%.
So Apple keeps the rest 41%. Today's (when I wrote this) exchange rate shows
approx. 76 rupees for 1 USD so the amount they charge the user is pretty
accurate but Apple put so much wiggle room in their favor. This is true for
other currencies as well.

------
lupinglade
It’s a mess. In many ways, the App Store is nothing but trouble for
developers.

------
monkey26
This is unfortunate. I recently searched the App Store for “ssh tunnel” and
Prompt 2 came up. I bought it without much thought as I heard about.

Now I should have done my research but it doesn’t support tunneling or I
couldn’t figure out. Some research told me that no iOS ssh client will. So I
requested a refund and got it.

In this case I think the blame was on Apple. Not the author of the app.

~~~
Spooky23
I don’t know how you can blame either party.

If my kid wants a dvd about beetles (the bugs), and I click on a Beatles (the
band) documentary instead, that’s neither the seller or producers fault.

~~~
Brian_K_White
It's Apple's fault that they made a standard ssh feature impossible on ios,
yet still allow apps to be called "ssh".

No dvd player manufacturer created a dvd store where they sell dvds called
"The Beatles" but every Beatles dvd is missing Ringo because their dvd store
censors Ringo, but dvds are still named The Beatles.

~~~
Spooky23
So are you angry at the platform restrictions or the App Store?

They are two different things.

------
moogleii
This policy apparently has been around since 2009:
[https://arstechnica.com/apple/news/2009/03/app-store-
refunds...](https://arstechnica.com/apple/news/2009/03/app-store-refunds-will-
not-bankrupt-developers.ars)

Of note is that the developer "protection" clause in the 2009 version doesn't
seem to be in the current version ("Otherwise, no refunds are available."):
[https://www.apple.com/legal/internet-
services/itunes/us/term...](https://www.apple.com/legal/internet-
services/itunes/us/terms.html)

My memory is fuzzy, but I recall there was pressure from the EU? regarding
lack of refunds, so I'm guessing this was Apple's adaptation.

Regardless, it still clearly seems like the right thing to do is to refund the
developer the 30%.

------
josephagoss
According to the tweet, if a $1.00 app is refunded the customer gets back
$1.00 from the developer and Apple keeps $0.30.

So each refund costs the dev more than they took in for the sale whilst Apple
always pockets the 30%.

How can a refund cost the dev $1.00 if they only took $0.70 for the sale?

------
annoyingnoob
From the perspective of an iPhone user, Apple does a reasonable job of keeping
nefarious apps out of the app store (not prefect, maybe not even great, but
reasonable). Most apps that have a set price and not a subscription are
reasonably priced and one does not feel/notice that Apple takes a 30% cut. The
end user experience is reasonable.

I feel like getting rid of the app store, or even just allowing side loading,
would open users up to a lot of nefarious software.

If we assume that consumers like the App store and that its not going away,
how do we satisfy developers but allow consumers the comfort of the walled
garden?

------
bena
I don't think the issue is that Apple is keeping its fee even with a return.
That on some level is fair. They are providing a service to the developer.

The bigger question is whether their cut should be 30% in the first place.

30% was chosen by the first store of this type and it's just never been
questioned by platforms. I just read that Valve recently changed their
agreement to be a sliding scale based on sales (30% to start, falling to 20%
if you hit certain numbers).

But as far as I know, Microsoft, Sony, Apple, and Google all do a 30/70 split
on digital sales.

~~~
sukilot
> all do a 30/70 split on digital sales.

Consistency which is only possible in an environment of collusion.

~~~
dogma1138
Not as much collusion as simply lack of competition.

You don’t have any other options for most of their respective platform and
there isn’t enough incentive to compete on the pricing.

Also even when there is competition there are rules that prevent you from
lowering pricing in one store vs the other (there are some exceptions) so if
you end up say selling a game on the PC and you set the retail price as $60
and you launch it on 3 different digital content distribution platforms while
you might make more money on one platform than the other there is no
difference for the end consumer so there isn’t an actual competitive incentive
to reduce your cut as a digital distributor unless you think you can get an
exclusivity deal.

~~~
bena
Yeah, I wouldn't call it out and out collusion.

If the first store did 20%, it's likely all the stores would have followed
suit on that price point.

30% is likely the most they can take that people will tolerate.

~~~
wolco
They could take 70% or 95% and there will still be posts saying that the
market is 3.5 billion people and 5% isn't bad because Apple/Google do all of
the marketing.

~~~
meed2000
Please, be careful throwing this kind of idea out there, people at
Apple/Google, who obviously have run out of ideas long ago, may be reading
this.

------
wslh
I have mixed feelings about this and understand there are cases where it is
unfair and where it is a fair penalty.

I see the case where your child spend money via an in-app purchase in Roblox.
Where The kid buys USD 1k in robux and the Roblox app never complain... Where
we are using two factor authentication and all kind of measures to protect
credit card purchases. So, I think you can blame Roblox or Apple for not
adding these measures. This is like a dark pattern hidden in the
"frictionless" payments via apps.

------
tomduncalf
Looks like the original tweet may be incorrect according to replies on there,
or at least this doesn’t apply to every app, for example:
[https://mobile.twitter.com/LittleFinLLC/status/1288570444417...](https://mobile.twitter.com/LittleFinLLC/status/1288570444417728518)

Would be great if others could chime in with their experience if they have
records to check!

My apologies for posting this if it proves to be incorrect, hard one to fact
check weirdly.

~~~
xsmasher
The last time this came up, in 2009, I looked at my reports and concluded the
same thing- when Apple reported a refund, they were deducting 70% of a sale
from my future earnings, not 100%

~~~
xsmasher
This topic is generating enough heat that I went trolling through my old
reports.

Apple appears to be deducting just the 70% from earnings, not the full 100%.
[https://imgur.com/gallery/KwKlMXh](https://imgur.com/gallery/KwKlMXh)

------
jedimind
Tim Sweeney @TimSweeneyEpic

This is a critical consideration in these 30% store fees. They come off the
top, before funding any developer costs. As a result, Apple and Google make
more profit from most developers' games than the developers themselves. That
is terribly unfair and exploitative.

[https://twitter.com/TimSweeneyEpic/status/128831577560707891...](https://twitter.com/TimSweeneyEpic/status/1288315775607078912)

------
mawise
Nobody seems to be taking this to the logical conclusion. If Apple's behavior
is not desirable, then don't build apps for the Apple app store. They're
apparently providing enough value in giving developers access to premium
customers that this aggressive behavior is worth the trade-off for many
developers.

~~~
lumost
Apple's app store provides value to developers and customers because it is the
only method of delivering apps to iphones. If there were other app stores that
charged 20% less for the apps, then developers and customers would use those.

See Steam vs. Windows Store vs. Epic Games store.

------
ogirginc
Tweet can be accessed from
[https://web.archive.org/web/20200729052623/https://twitter.c...](https://web.archive.org/web/20200729052623/https://twitter.com/twolivesleft/status/1288344977169235968)

------
curiousgeorgio
> When a customer refunds your paid app...

(nitpick) The use of the verb "refund" seems confusingly wrong in this
sentence. Neither the customer nor the paid app is paying back any money. I
know it's Twitter, but it'd make a lot more sense to say "When Apple refunds a
customer of your paid app..."

------
monadic2
Of all the chatter around anti-trust, has anyone broached the app store and
apple’s monopoly on iOS software?

I am using the term in a colloiquial, non-legalistic sense.

My fear is that politicians are invested in tech stocks, like the rest of us
and pretty much anyone with a mutual fund, so they are unlikely to act in a
pro-consumer manner.

------
akerro
Can you buy and refund and buy and refund the same app multiple times? Can you
use this to ruin your competition?

------
tkubacki
One more reason for society as a whole to get rid of greedy tech monsters
dependency like Apple in long term.

Remember You often have a choice to not support this platform and move towards
web by default even if it is not easy (Apple enforce to use their web engine
to make sure you are in a slave position on iOS)

------
valuearb
This isn’t true. Source: me, I’m a developer who has been giving customers
refund instructions fir ten years.

------
neycoda
They should refund half of the 30% to pay for their costs and whatever, like a
handling service. Unfortunately that still means the seller is paying for
returns, but Apple probably is legally required in most countries to refund
the buyer fully, what do I know.

------
arbuge
Of note: as of last October, if a PayPal merchant refunds a customer for any
reason, PayPal is no longer refunding their payment processing fee. The
merchant will need to refund that to the customer at their own expense to
grant the customer a full refund.

------
8ytecoder
A fair and equitable App Store model that also protects users would be one
where it’s opt-in. Apple vetting an app should be independent of distribution.
Developers can then choose whether they want to use the App Store or not.

------
m3kw9
This probably lower incentives for App devs to create refund situations. For
example you attempt to get people to download your app by misrepresenting it.
Most will not get refunds, and the Dev gains from such behaviour.

------
saagarjha
“Sorry, we already spent it.”

------
gnicholas
Stripe started doing this as well, as of a few months ago. Makes it tougher to
be generous with refunds for people, knowing that we literally lose money
doing so.

Fortunately their cut isn’t the massive 30% that Apple takes.

------
makecheck
The “cost” of refunding a $9.99 app is the same as the “cost” of refunding a
$0.99 app. Sure, let them keep _some_ amount for payment processing but it
should be a constant.

------
yannikyeo
PWA web app needs a store to be the distributor for small web apps, making it
easier for small developers to monetize more than just ads. Where is Mozilla,
MS, Google, Amazon?

------
person_of_color
The tweet is now deleted. What happened to the dial a mob?

------
molszanski
How does it work in other stores? Like Google Play, Steam, Microsoft Store,
Playstation / Xbox / Nintendo / Switch stores? Do they keep it?

------
bawana
What happens if I send somebody money with PayPal/cash app but then
reverse/undo the transaction? Are the fees kept?

~~~
lukeramsden
Most likely, but the fees are more like 30p + 2.9% (atleast in the UK, on
PayPal) or something similar, which on a 99p app would be 30%, but on a $15
app it's obviously nowhere near 30%.

------
user123ae78
Why is it we don’t tax these companies in the same way. 30% on all income in
the country where the good/service was sold

------
Waterluvian
Wait so.

I buy your app. You get $7 and Apple gets $3.

I refund your app and get $10 back. Is Apple taking $10 from the developer to
give to me?

This smells positively rotten.

~~~
xsmasher
It's not true, as far as I can tell from my reports.

Apple appears to be deducting just the 70% from earnings, not the full 100%.
[https://imgur.com/gallery/KwKlMXh](https://imgur.com/gallery/KwKlMXh)

------
leptoniscool
Not surprising, since they have control of the platform and the market. But
it's ethically questionable.

------
briandear
Previous story from 2009: [https://arstechnica.com/gadgets/2009/03/app-store-
refunds-wi...](https://arstechnica.com/gadgets/2009/03/app-store-refunds-will-
not-bankrupt-developers/)

------
chourobin
Dig a little deeper in the thread. I don't think this is accurate.

------
ljw1001
This is Apple exploiting it near monopoly powers, plain and simple.

------
arrty88
How come all the best tweets get deleted? C’mon

------
fizixer
"When you refund a customer in full, for an app they _returned_ , Apple
doesn't refund you the 30% cut" ... ?

------
bishalb
HNers don't seem very critical of Apple here. Imagine if Microsoft did the
same, all hell would break loose.

------
fractal618
That doesn’t seem fair at all

------
layoutIfNeeded
This is simply not true.

------
olliej
What the hell?

------
lolsal
Apple is taking a cut for providing the store itself, distribution,
visibility, SDKs/frameworks, etc. Why would they refund 30%?

~~~
onion2k
_Why would they refund 30%?_

Because they can afford it, and it's the right thing to do both ethically and
morally.

~~~
lolsal
Why is it the right thing to do morally and ethically? Didn't they earn that
money?

~~~
onion2k
If you went and bought a new car for $50,000 and then needed to return it and
get a refund you wouldn't be very happy if the dealer gave you $45,000 back
and said "Sorry, the salesperson gets to keep their commission. They earned
that money." The dealer wouldn't be very happy if the salesperson said "No,
I'm keeping my $5,000. I did my part and I earned that money." If there's a
refund then _everyone_ gives their part of the money back.

Apple were part of the transaction, so if there's a refund they should return
the money they earned. They can't just ignore the customer's wishes to get the
money back, and they can't just pass the loss on to the developer. Neither
would be fair.

------
oliverx0
Seems fair to me. Apple provided with you a service and charged your for it.
It is a cost associated with distributing / developing your product. Why
should Apple be responsible for refunding you? It was not their fault that the
customer decided their money back.

~~~
saagarjha
Apple prices the exact same things into hardware distribution too, but when
you ask for your money back there they give it back in full, not minus the
“service” they already provided you.

~~~
oliverx0
And I think that’s great! I just don’t think they need to be forced to do it.
If I were Apple I would definitely refund. But I don’t agree that it should be
an obligation for them to do it.

------
jbob2000
Well yeah, I still need to pay shipping for amazon to send me a product even
if I need to return it because it's broken. I would have no product to return
if I did not pay for the shipping to receive the product.

Apple would justify that 30% being non-refundable by saying "you would have
never had that client to refund if you did not give us that 30%". They did
their job, they got you the client, you were the one who did the bad job and
made the client pursue a refund.

You pay a toll to cross a bridge, but it turns out to be the wrong bridge. You
don't get your toll back, you still crossed the bridge.

~~~
samfisher83
Except apple's marginal cost like 0.

~~~
ebg13
Marginal cost is often not a good way to evaluate things.

A person who focuses only on marginal cost will say "It only took you an hour
to make that" while discounting the decades of training it took to be able to.

A person who focuses only on marginal cost will say "I could have made this at
home" while discounting the reasons why they didn't.

Prices relate to provided value, not just cost.

~~~
sukilot
How much value is provided for a refund?

~~~
ebg13
The amount refunded minus the continuing value to the user of the returned
product (absent the value already extracted from the product by the user), of
course.

