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When a customer refunds your paid app, Apple refunds its 30% cut [edited] (twitter.com/twolivesleft)
1243 points by tomduncalf on July 29, 2020 | hide | past | favorite | 548 comments



  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?...


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?


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”.


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


Or it just says something about confirmation bias.


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.


Such an awful comment.


Not an Apple user nor developer, but damn, 30% seems above reasonable ...


same like all Apple pricing, no? Seems just above reasonable, rubs you the wrong way, yet you still go for it. Sort of perfect from their perspective


CPC Gray had a video on why rage/anger related materials spread around internet.

TDLR: Materials that cause anger/ rage make people want to reshare it at higher rate (I want to do something) vs positive materials that make you feel good.


We? No the standard Apple haters did what they do and rage as soon as you hear the word Apple but this is not the entirety of HN acting this way.


“Apple haters”, or Apple customers who have blown tens of thousands on Apple equipment over the years and have noticed their (relatively) recent focus towards maximising their revenue instead of being focused on producing good products.

I continue to use Apple products every day as my daily drivers, and can’t see that changing. Im writing this from my iPad Pro. I’m probably buying 2 new iPhones this year despite them all being too big. I haven’t bought a new MBP in a while as my 2015s meet my current needs better than the new products do.

I found the original tweet totally credible.

I feel more like an “Apple sucker” than an “Apple hater”.


If you found the tweet credible then why did this come up now? When they were testifying before congress? That’s because it wasn’t credible. And the pattern is, some news about Apple comes out, people rage BEFORE getting the entire story, then later learn the truth and calm down. In this case it was a matter of hours.


> the pattern is, some news about Apple comes out, people rage BEFORE getting the entire story, then later learn the truth and calm down

I found it credible. I upvoted the post. I then learnt the truth, and posted that I found the original tweet credible.

There's no rage. There's just me, a long time Apple customer, finding a falsehood believable.

There's more nuance to the world than just 'Apple haters' and 'rage'. You don't have to be an 'Apple hater' to fall for this. You don't have to have been 'raging' to have fallen for this. You can just be (like me) stupid, and happily admit that.

¯\_(ツ)_/¯


Well next time perhaps look a little deeper. It was pretty obvious to me the poster doesn’t know much about this process. This would’ve come up years ago, this should’ve been a red flag to anybody believing it. But hey, people miss facts all the time. However the specific problem here is why this person didn’t get the facts prior to posting. With how quickly people react to fake news is dangerous these days. So maybe do yourself a favor and play devils advocate next time. Also scroll down in this comments section to find your ragers.


Ah good to know. Will email the mods here to see if they can delete/amend this post.


Moments ago, I stepped in to a discussion and corrected some angry people still spreading this misinformation.

My thought was to ask HN editors to run some kind of a correction post, because these angry people had learned of this “fact” here but never saw the follow-up comments. Since @twolivesleft already has a correction post up on Twitter, I just posted that on HN instead.

It remains to be seen if this post does well on HN. I'm afraid it won't, because personal embarrassment isn't quite as fun to spread as anger against billion-dollar companies.


I upvoted your post of his correction, thanks!


Ok, we've updated the title. Thanks!


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!


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.


Notably, it's a somewhat recent change for Stripe.

They had refunded fees but iirc it meant they were paying a small fee per refunded transaction (which in a sense subsidizes apps that incur frequent refunds) which they wanted to stop doing.

A quick search showed they started refunding fees in 2012 and stopped in 2017. Here's a discussion from the past couple years: https://news.ycombinator.com/item?id=22371330


They stopped doing it for new customers in 2017. Grandfathered customers saw the policies change in March of this year. My company's account saw the change in late March, while we were all staying at home, so that felt like a gut punch. https://news.ycombinator.com/item?id=22371330 was contemporaneous


> It's uniquely online processors that do not refund fees.

It sorta makes sense, since the online processors are usually middlemen that only make money on the fees they themselves charge. I could see their perspective being "we provided the service; that service is not un-provided because the customer returned the item and you sent them a refund... in fact, you used us even more because we had to mediate the refund transaction!"

I think if the fees were just a few percent, I wouldn't have too much trouble accepting that logic, but from Apple, where it's 30%... not so much.

The card issuers don't care quite as much about keeping the fees in a refund scenario, I guess... though I believe you don't get everything back during a refund, regardless.


Why do such fees (online, appstore, etc) have to be "some x% of the transaction value" and not just a flat fee?


Because, money. I can understand, on a credit transaction, there is a larger risk when a larger amount is spent. But even then I would expect some tiers. But for an online transaction, where there is no real risk to the middleman, it is about making more money.


CC Processors like Visa and Mastercard do refund fees on CC processing, but the interchange or % of return is smaller than the actual gross. You don't necessarily get "all" of your refund, if you're a merchant.


Only processing fees aren’t refunded which is like 25 basis points for a mid size business.


It’s highly country dependent. Card present transactions are still several percent in many countries.


That isn't true. They enable the return of the interchange (from the issuing bank), they do not refund the scheme fees.

In fact, you will pay more on the scheme fees to process a refund, as you need to send another message into the scheme's network - often charged per message or per byte etc.

Interchange is not payment scheme revenue - it is just passed through to the issuing bank.


Scheme fees generally don't apply to US credit card transactions...

That is primarily an issue for cross-border credit or debit card transactions.


That clearly can't be true, as it would mean that Visa and Mastercard would be working for free for domestic transactions.

Scheme fees are much lower for domestic transactions as far as I'm aware, though.


Visa and Mastercard don't use a scheme fee in the U.S. The credit card system is structured differently here than it is in the EU.

Generally, Visa and Mastercard simply charge more per transaction for different cards in the US. For example, rewards cards cost merchants more, which is why many gas stations won't accept them.


The interchange is higher, sure, but that still goes to the issuing bank. Working with schemes still involves separate fees, as does processing and acquiring.


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).


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


No, OP is just plain wrong.


That's because they're not the same class of processor. The chain is like

Your bank account -> visa/mastercard/discover -> PayPal's merchant bank account -> the person you're paying bank account

PayPal only replaces the ccs when you pay with their wallet. Otherwise they're just orchestrating the money flow (because integrating with the CC companies is a gigantic PITA)


PayPal is not a credit card processor, it is Money transmitter, different legally

Stripe on the other hand is a credit card processor, and as a merchant you get a Merchant account, the same like Authorize.net who used to be the largest online processor before Stripe.

Back in the day (and I have been out of that market for over a decade) Authorize.net absolutely refunded processing fees on refunds


Just to add, PayPal is also most likely a credit card processor, serving as a Payment Facilitator (PayFac), which enables others to become CC Processors. It happens that PayPal and Stripe are money transmitters, which may come with being a PayFac.

Auth.net is a gateway/portal that facilitates CC transactions, and while you may be refunded on processing fees for the use of the gateway, someone, somewhere is likely eating the interchange and most likely occurring at the merchant level.


Notably, Square, founded in 2009 didn't become a money transmitter until sometime in 2013, IIRC, and I think a few laggard states in 2014. This was in service of Square Cash, not the core payments business. They were, however, merchant of record the whole time.


Authorize.net is not a payment processor but a payment gateway.

TSYS, Vantiv, PaymentTech are processors. your merchant account is usually with (i think) the acquiring bank that's part of the Visa/MasterCard/Amex/Discover network.


Didn't PayPal get a bank license which also caused them to close a lot of accounts that were created decades ago by users that weren't old enough for back accounts back then?


"It's uniquely online processors that do not refund fees"

Uniquely those that provide some higher level thing, like PayPal or Stripe. If you have a merchant account, you can get an actual refund for online purchases.


> This is why retailers generally require you to use the same method of payment to get your refund.

This is for AML, not because of fee refunds.


I've bizarrely been refunded in cash multiple times at Wal Mart for card/app purchases.


The normal structure for credit card processing is a few cents flat payment plus a percentage of the transaction[1].

Something like 5 cents + 1.5% would be a great deal on payment processing, generally. (Apple is a juggernaut and may have been able to negotiate something else, of course.)

That does mean that for a $0.99 app, keeping the fees would still be more than that 3%, at ~$0.07... but not wildly divergent from the 30% amount.

Where the 30% gets really abusive is for things like Codea, the app being talked about in the Twitter thread. It costs $14.99. So it had presumptive fees of ~$0.28, while Apple's keeping $4.50. That's outrageous.

(Also, I see mixed reports on whether credit card refunds refund the processing fees. It might be contract-dependent.)

[1]: https://www.fool.com/the-ascent/research/average-credit-card...


Apple doesn’t charge the user immediately. Instead it consolidates over a few days. So, often, the card processing fees are lower for Apple.


Payment processors also don't typically sell their own hardware, then lock said hardware down so that the payment processor's store is the only way to purchase things for the hardware. Payment processors typically allow you to buy a variety of goods from a range of storefronts. Comparing the Apple store to something like stripe or PayPal seems pretty apple and orangy to me.


PayPal does refund the variable portion of the fee (e.g. 2.7%) but not the fixed portion (e.g. 30 cents).



> Payment processors generally don't refund fees on payments when the payments are refunded, this isn't new.

This is new, and in fact PayPal and Stripe enacted this policy only this (or last year if I recall correctly).

Some payment processors like Affirm or Amazon Pay have not changed their policy on this yet.


Square used to refund the fees, they changed that policy when I was there and the reason was just to lose less money on refunds. I'm not sure whether they had to pay interchange on refunds or not.


The 30% cut is not a payment process cut or else this would fall under: usury, profiteering, rip-off.


For reference for folks who aren't familiar - in the US,even 3% would be an above market rate for credit card processing. The big companies like square and stripe are usually 2.9% for $0/year accounts, and rates go down from there. Smaller processors can do lower rates, and if you do over a few $100k/year, you can do lower with the bigger players as well.


For online processing, 3% is by no means above market.

For example, the default price on Stripe (and many others) is 2.9% plus $0.30. For a business with an average order value of $30, that $0.30 adds a full percent, bringing your fees to nearly 4%.

If you do high enough volume, yes, you can negotiate lower prices.


To be fair, Apple and Google do a fair bit more than a payment processor does (basically nothing). Not 30pp more, but it wouldn't be reasonable to expect 3% fees.

I'd guess 10-15% is what is actually reasonable. Microsoft has settled for 15% in their store (because nobody was using it so charging 30% is ridiculous).


For that low low price they'll also reject your app for random reasons and make it impossible to find in their store.


> For that low low price they'll also reject your app for random reasons and make it impossible to find in their store.

So much the same as the other stores then.

But the store feature I want to see from Apple is that if you provide the customer referral to your app yourself, Microsoft only takes 5%.


Microsoft is not in the business of making money from apps, right now they need growth, it might even be a question of hey so we need to keep the store running. I say only partly in jest but see them change colors if they ever get a dominant share.


So you're saying that companies who have to compete charge less whereas companies with a dominant market position can extract monopoly rents because they lack competition? But people keep telling me that isn't the case for Apple. Shouldn't they be doing the same thing to try to get store market share from Google?


> So you're saying that companies who have to compete charge less whereas companies with a dominant market position can extract monopoly rents because they lack competition?

Not GP, but I didn’t read it that way. I read it as Microsoft loss leadering their store to get growth.


"Loss leader" means losing money one one product in order to get people to show up who buy more of something else. How do you imagine Microsoft's costs for paying a ~3% credit card fee and hosting a ~50MB app are going to exceed 5%? Also, what's the other product they intend to make money on supposed to be?

You can't attract people to the store with low fees and then raise them later or they'd just leave as soon as you do. Unless you would require them to use Microsoft's store and no other, but then you could just do that from the outset, except that it'd leave you with the same sort of antitrust scrutiny that Apple should be under for doing the same thing.


Generally the reasons for rejection are not random except as a matter of uninformed or misinformed perspective. However, if you are saying they have made some mistakes at times, I’d have to agree.


Yes, they do a lot, but not at the moment of, or as part of, processing a transaction. What work do they do specifically for a transaction so that they get to keep 30% of it?


Apple and Google actually take 15% for subscriptions after the first year of consecutive subscription.


PayPal also keeps the fees when a refund is issued https://www.theverge.com/2019/9/20/20876570/paypal-refund-fe...


Important difference: with Paypal, the seller decides to issue the refund, not Paypal unilaterally (except in cases of alleged fraud), and the seller can determine how much of a refund to provide.


Hmm, when I use PP to refund to my clients, PP returns the fees - it's a line item in the ledger.


That cannot be true or maybe you have a grandfathered account, as paypal absolutely does not refund the percentage fee. Same with Stripe.


My account is a five year old business account. My most recent refund I issued was Aug 2019. A line item on the PayPal statement was called "Fee Reversal" for $12.46 USD

However, a read of their current policy shows it's no longer the case - so I'll likely get dinged on my next refund.


Small business owner here...I use Wave for accounting. They absolutely do refund the fee. Shame on the processors who don't refund it, and shame on those who hasn't been doing that since the beginning (Strip, Paypal...) because they are knowingly sticking it to small business owners. I've used Wave for 4.5+ years and this is how I've known it.

"Regardless of the type of payment you received, the full amount that the client paid will be refunded to the client by clicking on the refund button at the bottom right-hand corner of the transaction details."

https://support.waveapps.com/hc/en-us/articles/115004056523-...


> Regardless of the type of payment you received, the full amount that the client paid will be refunded to the client by clicking on the refund button at the bottom right-hand corner of the transaction details.

That doesn't say anything about what the merchant gets charged. Stripe and PayPal also send the full amount to the card holder, so that blurb would apply to them too. The question is whether the merchant ends up with zero or minus the original processing fees after the refund.


Stripe does refund their fees with a transaction refund. I understand this may be novel for the payment processing industry though.


Is this true? From their docs [1]: "There are no fees to refund a charge, but the fees from the original charge aren’t returned."

[1] https://stripe.com/docs/refunds


No stripe doesn't. They used to but not for a while now. At least not for our SAAS business where we do close to 1M ARR. Am I missing something ?

https://stripe.com/docs/refunds


Same here, they used to but stopped about a year ago.


Ditto. Helping some non-profits, we were really hurt by people typo-ing a $10,000 donation when they meant to only donate $100. We quickly learned from that mistake.

We also learned about how credit card thieves test credit cards. We saw hundreds of donation attempts. Stripe had us refund those that went threw, which costed us money in fees. Fortunately we were able to put some quick measures in place to stop them temporarily & then better measures for long term success.


I am curious what measures did you put in place?


The credit card tests had unique network patterns we could block.

We lowered our online donation limit. Above a certain amount it really is more ideal for a check or some other type of transaction. Though we've had a few people offer to just pay the 3% transaction fee on top of the multiple thousand dollar donation. For those we do a bit more manual process.

For a cost, Stripe also lets you put some additional rules on what type of payments you'll allow & how much info the person has to verify for the payment to be accepted.


We actually raised our minimum online donation limit to avoid issues with those processors. They apparently look for set your own donation sites so they can try to authorize $1 test payments. We changed to a $10 minimum and they seemed to have stopped.


Thank you. It all makes sense. Did you end up using Stripe Radar to check for fraudulent payments? It is working well?


Yes & yes but your mileage may vary depending on your customers/donors. For example, we turned off transactions from several countries.

Honestly a basic version of this should be free. I shouldn't have to pay extra to say I only accept cards with a CVC number & expiration filled out.


I agree with this. I am a bit frustrated with Stripe for making this a paid service given the cost of payment processing. However, I assume when the fraudulent transactions cause a loss you have to pay for Radar.


A common way to prevent that is to authorize only first - settle/charge that payment at a later time when you think it's not a typo.


I guess it's been a long time since I've been personally responsible for the financial side of Stripe accounts. I think it was 5 years ago when I used to run a lot of test transactions and refund for net $0, but times change. Sorry to lead anyone astray.


That's awesome! However, it WILL result in stripe attracting a LOT of the crappy billers (ie, folks who mislead / make customer unhappy etc). If your business is < 1% refunds, no worry if fees stay. A fair number of business have just 1 or 2 refunds PER YEAR.

Other business obviously have MUCH higher refund rates (sneaky autobill businesses etc). For these loosing 5% on the refunds matters if they have a lot of refunds, so they'll be very tempted by no costs if you autobill and get caught. They'll just autorenew everyone, autosign up and then be VERY good about refunds to avoid chargebacks. Even if just 30% of customers don't catch a few months you end up with real money.

Of course, CUSTOMERS may hate these players, but stripe I guess is focused on what works for the businesses generating lots of refunds.


Having a disincentive for merchants to have many refunds makes a lot of sense.

The reasonable thing to do is to ramp up the fees based on the number of refunds. You want to push away the crappy billers, but not hammer developers that have the occasional bad release.


That is not accurate. Stripe does not refund us the fees.


Not anymore


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?


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.


"where losing $2 at volume is fine."

Sorry, when is this fine?

A dev flogs an app at 10 and pays 3 to Apple. Then on a refund they lose 3 and the end user has no incentive to even delete the app. Nope, I won't entertain that nonsense.

The only way that I can see for that model to play out is for the dev to factor in a lossrate x 1.3 uplift for their app. That means owners of shiny iStuff are paying Apple an additional unannounced "tax" based on their app churn. Use and discard more apps, then you pay more for the privilege. A dev would have to become a loss adjuster as well: "Hmm assume a 10% return rate" - so the upcharge on my app will have to be:

* My app should cost 10, assuming a fair market. * I lose 3 on a refund, which happens on 1/10 sales (I was paid 10 on sale, I paid 3 to Apple, I refunded 10 and hence lost 3)

So my price adjustment would be 10 + (0.1 x 3) = 10.30. Yes, it looks like a simple uplift will deal with this. Sales: x, churn rate: c, Apple tax: a. => s' = s + (c.a)

That is anti-competitive behaviour on a gigantic scale. Apple are making the apps that are developed for their platform automatically more expensive by a process that looks suspiciously like stealing.

I call that parasitic.


You're forgetting development and marketing costs.

If there is a sunk cost component that number skyrockets.

Try adding a $5 customer acquisition and $1 developer time.

Thats a $1 profit, you need to sell 3 apps to cover the cost of apples fees. You also need to sell another 6 to cover the sunk costs you don't get back.

So 1 refund costs you 9 sales.

To cover the 1/10, you'll need to charge 10.90, or more likely 11 to cover the moving 30%.

But this is just to break even with your original $1 profit margin.


I'd argue that if 10% of your paying customers are refunding your product, you have a product problem.


Depends on your product, model, and demographic.

At work our refund rate is like 30% for Japan. Investigating this, it turns out there is a cultural behaviour where converting at a higher rate early and refunding if it's not a good fit is the normal way of doing things.

And in a past life, general 4% refund/return rate is pretty common across most ecom markets.

Not saying apps are in this boat but if you ignore refunds in business you're in for a bad time.


Or a userbase that for some reason dislikes and abuses you. Maybe you have made enemies because of some random political statemant. A large enough group could ruin you.


I deliberately simplified things. My "10" is the costed price of the app.

Ignoring all other factors, flogging the app on Apple automatically introduces a parasitic "tax". That is the hallmark of a monopoly.


> What is worse, is that Apple doesn't remove the app from the user's device.

This. Is. Ridiculous.

We all know this is an intentional design decision by Apple and that they would absolutely not have designed the workflow this way if they had to dogfood their own platform.


Serious question: Is this refund problem as big an issue as commenters here are implying? Is there data that shows that app developers are losing significant money due to Apple's fees not being refunded? I would have guessed that very few people ever request a refund on an app they purchase, but I have no data to back this up.


Original link includes this tweet estimating about $8000 cost from Codea: https://twitter.com/twolivesleft/status/1288491970248077314/...

Here's another example from Wil Shipley where someone purchased 30 education copies and then refunded all of them. Total for the day nets out to -18 purchases and sales of $-360:

https://twitter.com/wilshipley/status/768540129203855360

If you made say a high profile game that a particularly whiny subset of gamers took notice of, I imagine it could be much worse, but I don't know that this has happened yet. I'd bet money that it will though, and you have to wonder what Apple will do about it.


> if they had to dogfood their own platform.

But Apple does sell one app through the iTunes App Store (Dark Sky, which they recently acquired). They sell several through the Mac App Store.

So, they do dogfood, but obviously they are not depending on revenue to survive here.

Side note: there are a bunch of apps listed under their developer that I had not seen before: Music Memos, Indoor Survey, Texas Hold'em, and Reality Composer.


> So, they do dogfood, but obviously they are not depending on revenue to survive here.

Their pro apps are almost given away for free.

You could argue that $200 for Logic is not free, but similar DAW products costs 4-5 times more.

Not only that, but competitors need to charge you for major updates every couple of years, like any developer. Since Apple released Logic Pro X in 2013 it has kept pushing updates without asking for money.


There's also Apple's continued refusal to allow devleopers to have separate pricing for updates vs new purchases. It's either a free update to the existing app, or it's an entirely new app listing with the same price for new users and people who owned the previous one.

I've seen this circumvented by creating a package deal of the old and new versions, which then gets discounted via the "you already own part of this set" mechanism, but it's a messy experience and not something that many developers have done.


This apps also can use internal APIs without faring to be removed from the app store, they can also do UX practices which are not super compatible with the guid lines and they never need to fear an arbitrary ("accidental") review block/take down.

So it's not at all feeding they own dogfood. Do do so Apple would need to run separate finances and make sure they don't get benefited in the review process.


> We all know this is an intentional design decision by Apple

I see this as a good thing, since it probably means that only the user is capable of removing apps, requiring intent, and that Apple can never remove an app from my device.


Leading to a _trivial_ solution.

Want a refund? Awesome. Delete the software from your phone. Then, go to the appstore, find the app again, and click 'request refund'. If apple wants to improve the user experience, they can offer 'request refund' when someone uninstalls a recently bought app.


That would still mean that Apple would need to have a remote way of scanning every device currently connected to your account (even it's offline..?) to see if you have the app installed anywhere. It's trivial if the app can only exist on a single device and that is the only device that can request the refund. But that's not the reality.


I mean they already track which device things are install and not installed on, a simple popup "please delete this app from all your devices in order to request a refund" would be all it takes .

Or if that's too much of a disruption for users, just requiring the current device to delete it would cover most cases and be better then the current situation.


That... wouldn't work.

Users can set each device to automatically download and install newly-purchased apps.

Imagine the case where there is a device you have misplaced (or given to a relative, or had stolen, or ___). You must find every device with auto-download and purge the app from each one before requesting a refund.

So you create a situation where it is possible that the user quite literally can't comply with the terms of the refund.

Perhaps a compromise would be to

1. Delete from the current device; and 2. To verify the status of each app during OTA updates (which, by definition, have connectivity to Apple's servers). Any refunded apps would be greyed-out or something.


It is trivial to track that an app has never been opened on a device and automatically uninstall it in that case. Seems weird to fall all over the notion that 'oh no! apple can delete my apps remotely!' - but you're fine with 'apple can install apps remotely'.

Uninstalling an automatically installed, never-opened app is not a breach of the personality of your device.


> It is trivial to track that an app has never been opened on a device and automatically uninstall it in that case

Why would you want Apple to have access to everyones online/offline usage habits for apps, and scans every time you restore a backup?


> That would still mean that Apple would need to have a remote way of scanning every device

Why? Apple controls the OS, and can blacklist any App they want. They dont need to know whats installed on your device to prevent it from running.


Apple is fully controlling your device, they can always do so if they want to even if they currently have no mechanism for it build-in.

(Except if your phone never connects to the internet or a cell-phone at all ;=) )

Also apple could just require the user to remove the app before requesting refund or at least putting it in a partially removed state from which apple then can remove if.

I.e. there is 0 benefit for any serious acting person. Only people who try to rip of app publishing companies profit from it.


I saw it the same way. I'd be a terrible idea to let Apple remove/install AppStore apps without the customer's permission. I don't know if it already does something similar but in the next OS update it could block the usage and force to delete refunded apps.


Why couldn't the refund be conditional on granting removal permission? One issue would be they could still restore from a backup I suppose.


If you charge $100, you get $70 from Apple (I'm an Apple developer, so I know, but I don't sell anything that costs $100).

Apple gets $30, and you never see it.

I believe that the $70 is taxed; not the $100.

I know that if a customer get a refund, the full Benjamin comes back to them (I have received refunds).

So does that mean that Apple asks the developer to pay "back" $100, when they only paid the developer $70?

I have never had to issue a refund, so I don't know.


> So does that mean that Apple asks the developer to pay "back" $100, when they only paid the developer $70?

Kind of, except Apple doesn't ask, instead Apple automatically reconciles the balance debiting the $100 from the payout balance Apple maintains.


> Apple automatically reconciles the balance debiting the $100 from the payout balance Apple maintains.

That's the part that puzzles me. If there's a refund, and they penalize me by charging $30 more than I was actually paid, I see that as being problematic. Also, I suspect that it would be illegal in some venues, unless clearly spelled out in the contract. I'll have to spend some quality time, reviewing my contract, to find that...


Yeah, it looks like they can do exactly that. Here's the relevant part, from my agreement:

> 6.3 In the event that Apple receives any notice or claim from any End-User that: (i) the End-User wishes to cancel its license to any of the Licensed Applications within ninety (90) days of the date of download of that Licensed Application by that End-User or the end of the auto-renewing subscription period offered pursuant to section 3.8, if such period is less than ninety (90) days; or (ii) a Licensed Application fails to conform to Your specifications or Your product warranty or the requirements of any applicable law, Apple may refund to the End-User the full amount of the price paid by the End-User for that Licensed Application.

...and here's the (literal) money shot:

> In the event that Apple refunds any such price to an End-User, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. In the event that Apple receives any notice or claim from a payment provider that an End-User has obtained a refund for a Licensed Application, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. In such cases, Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the End-User.

So that answers the question as to whether or not it does happen; but not whether or not it should happen. I guess developers could ask their congresscritters to grill Tim about it...


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


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.


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.


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


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).


Of course they can.

If you no longer have access to a device you used to own, you should use findmy to remote wipe it.

If you really didn't want that, then you should at the very least go through the trouble of filing, with apple, that the device is lost or stolen, so that any attempt to return that device to an apple store or reseller to fix it gets it flagged.

It seems bizarre in the extreme that you'd want to somehow protect your privacy by not reporting your stolen stuff as stolen with apple, but that you opt in to a system where installing apps requires going through a single vendor.


There's more than one way to do this. If the purchase is refunded on the device, the app can be uninstalled at the same time; this is how Google does it. If the app is refunded on another device or in the browser, then all it takes is for the app store to keep track of app licenses (which it already does) and remove apps when their license disappears.

It seems odd, though, that Apple wouldn't have an API that allows locking app functionally behind licenses; on Android [1],

> With Google Play Licensing, your application can query Google Play at run time to obtain the licensing status for the current user, then allow or disallow further use as appropriate. > ... > Note: The Google Play Licensing service is primarily intended for paid applications that wish to verify that the current user did in fact pay for the application on Google Play. However, any application (including free apps) may use the licensing service to initiate the download of an APK expansion file.

In other words, the licensing service checks for both IAPs as well as if you've paid for the app itself.

[1]: https://developer.android.com/google/play/licensing


> that Apple wouldn't have an API that allows locking app functionally behind licenses;

This is what their subscription system does, though. I'm not familiar with their for-pay app setup, but for subscriptions you can monitor the receipt and see what it's status is. Perhaps you can't do it from there, but I know when even an free app is installed, you still get receipt information written to the device.


It seems odd, though, that Apple wouldn't have an API that allows locking app functionally behind licenses

They do have something like that: https://developer.apple.com/documentation/storekit/in-app_pu...


actually they do have the ability to remotely wipe an app https://www.macworld.com/article/1134930/iphone_killswitch.h...


They can, just push a Apple update and wups done.

They could also make the removal part of the refound process in which case the user would delete the app through the refound process.

The idea that this is because it protects users isn't holding up any closer inspection.


Oh but they install apps with certificates that will expire sooner or later.


They absolutely have the ability to do that though, they clearly have the ability to shut a device down entirely too based on the iOS activation system.

I probably wouldn't go as far as 'dystopic' either.


By that definition, if you want to be realistic about it, every OS vendor with regular software updates has the ability to do anything they like on any device they like.


Can you explain that point a bit more? It doesn't seem to make any sense to me. You revenue is going to be number of sales * price - (number of refunds * price * 0.3). Factor, and you get price * (sales - number of refunds * 0.3). Your unit cost is 0, so the only thing that matters is if your revenue exceeds your fixed costs.

I don't see how this would explain a disincentive to charge higher prices.


You missed the key point of the OP: you only get 70% of the gross revenue (units * price), but when a user requests a refund, you the app developer have to pay out of pocket to return 100% of the price back to the user (Apple doesn't refund the 30% it took off the top). So you are losing 30% on every refund, and in the extreme case, if every sale is refunded (i.e. from a malicious online viral thing directed against you), you can lose unlimited money scaling linearly with the number of sales (again, if every sale is refunded or close to it).

EDIT: ofc in the Twitter thread, there's few disputing that if this is actually true, or if maybe Apple does different things in different markets, etc. so everything with a grain of salt I suppose


I'm not the person you're asking, but I can probably try to explain.

Take other payment processing platforms like Stripe as an example. Stripe charges $0.30 + 2.9% to process a purchase.

To help build your (and my) mental model: Price of item -> Stripe revenue (rounded)

$1 -> $0.33

$5 -> $0.45

$100 -> $3.20

Apple's 30% cut makes sense if they were expecting most apps to be roughly $0.99 (anecdotally, I remember this being true during the early days of the App Store) and the (presumed) few apps that cost more than $1 would be the "whale" developers that would subsidize Apple software development. But nowadays apps are a lot more powerful, feature-full, and development-intensive so higher prices are required for any hope of profit.

So the math you have is right, it's just that the path to profit is a lot harder when the ONLY way to sell your product is to have >=30% cut out immediately upon sale. Some stores set a minimum (e.g. $5) sale amount for using a credit card and those payment processing platforms have fees orders of magnitude less than Apple's App store


Your profit (at 0 unit cost) will be

(Sales not refunded * 0.7-refunds * 0.3) * price

If

Sales not refunded/refunds<0.3/0.7 ~ 43%

Then profit can be negative (you lose money because more people refund than not).

>57% refund rate literally makes you lose money from listing. But even if just quarter of people refund that eats almost half of profit.


Perhaps the refund-rate is higher on $100 apps than $1 ones? If you find out your kid made an unauthorized purchase of $2 you're not likely to refund it, if its $100 you definitely will.


That’s the problem with paid apps... but I also believe now it’s a problem with devs not validating the app receipt to check for refunds and prevent access.

For in-app purchases, up until a few years ago, users would always have access to them (even after a refund) then it followed the same rules as paid apps - access always maintain but one couldn’t restore.

Subscriptions however are unique as a server would constantly check the receipt from Apple, which would show a refund flag, so you could block access. Now they even send you a push notification to your server to indicate a refund.

With iOS 14, in-app purchases will get a “notification” when a user receives a refund on device (with IAP encompassing subscriptions).

So it’s getting better. Not perfect. But better.


This isn't logical. It's the same in percentage terms.

Whether you sell 1000 copies at $100 or 100,000 copies at $1, assuming the percent of refunds is constant, then the effect is identical. Right?


True in principle but there's more inventive for a user to ask for a refund on a $100 purchase than a $1 purchase.


Wow, well they got their money and don't care about developers.


If you do this often Apple will ban your account. If you don't do this often it's not a problem.


What if you have a big Twitter following and ask them to do it?


Sounds like a lawsuit in the making if the harm is great enough.


Lawsuits only really work if you know who to sue. And if they live in a country that will honor your country's court's decisions. And if they have money.


What laws would be broken in this case?


Tortious interference, also known as intentional interference with contractual relations, in the common law of torts, occurs when one person intentionally damages someone else's contractual or business relationships with a third party causing economic harm.

https://en.wikipedia.org/wiki/Tortious_interference


Yes, but you need to serve notice to the offending party, which might be hard if they are not a US person...

likewise collecting damages, etc


There might be something subtly illegal here - but I assume Apple would just refuse to honor the refund if they thought it was fraudulent - so it wouldn't be up to Apple to collect damages - it'd be up to the other party to collect their refund (assuming they can legally compel Apple to pay up)


How does that apply? In hypothetical this thread has been discussing nobody is damaging the contractual relationship itself nor is anybody preventing either company from fulfilling their contractual obligations. In fact, it's the strength and continued operation of the contractual relationship that would cause the economic harm. I don't think tortious interference applies here.


I would guess that buying an app with the intention of harming the app creator by doing a refund is against the ToS, and I think that's fair (since the purpose of the refund mechanism is to allow the buyer to change their mind for some "good faith" reason - even something like a change of mood is fine, but "to harm the creator" is obviously not)


Good luck proving that intention in court!


I've heard of this but am curious, does this also apply to people calling for boycotting companies?


> Tortious interference, also known as intentional interference with contractual relations

I think it would depend on the local jurisdiction's definition of the tort. A purchase/refund scheme would not induce Apple or the vendor to breach their app store contract, but it would deprive the vendor of its expected economic benefit.


Ianal but it might go under tortious interference?


No, I don't believe it would apply. Tortious interference is when you interfere with the contractual relationship itself. In this case the continued obligations is what would drive the economic harm, thus tortious interference wouldn't apply.


I was thinking more along the lines of criminal laws, I should have been more specific in my word choice.


The word "lawsuit", at least in American english, has the connotation of a civil rather than a criminal case.


Something about conspiracy to defraud, maybe?


How is that fraud? "Everyone, buy this product and return it to the store for a full refund," doesn't sound like fraud to me. It doesn't result in personal or financial gain to the people perpetrating it, either.

edit: so who is in trouble here? The person calling for people to do it with their twitter following or the twitter followers? I'm not saying that buying the app and returning it is not fraud if you entered into the transaction in bad faith and with intent to cause damage to the dev, I'm saying calling people to do that is not fraud.


You would be fraudulently filling out the request form - unless Apple has a "Reason for refund: For the Lulz" in its drop down box. You would also probably committing some sort of credit card fraud by enacting a transaction in bad faith.

I think the form is definitely fraud but I wouldn't be surprised if Visa went after you for something as well, they need to actually process all those charges and charge backs and it does cost them some amount of money to do so.


If I say the product wasn't useful to me, that's going to be completely true.


You are entering into a purchase agreement without the intention to actually purchase the item - that is most definitely fraud. It's like ordering a brand new car without the intention to actually ever pick it up, but instead to cost the dealer money. If you're acting maliciously that's definitely fraud.


I completely agree and understand. My statements were about the person inciting others to commit the fraud without so many words. Basically, I was saying it is not fraud to tell your twitter followers to buy and return an item. It may be conspiracy though.


Then you’d be a jerk. There are many, many ways to be a jerk in life.


So all it takes is a jerk then..


Good thing there are so few of those. /sarcasm


It's rather stunning how you took that rhetorical question literally, and in the process missed the point spectacularly.


Perhaps you missed my point. I'm simply suggesting that the answer to this rhetorical question is yes, you could do that, but you'd be a jerk for having done so. Having an internet army do jerk-like things for you occurs all too frequently.


> It's rather stunning how you took that rhetorical question literally, and in the process missed the point spectacularly.

In the past 2 weeks you've said quite a lot of mean things to people on HN. Please stop doing that.


You're right, my bad.


Or have a botnet do it


Individual bots in a botnet usually don't have their own credit cards.


You can buy stolen credit card data on the same sites where you can buy botnet access.


Will they? In some jurisdictions they are required by law to grant refunds. In others, they still have very little incentive to control refund fraud, what with the fact that they're still making money rather than losing it.

It would be one thing if they said "We're keeping the credit card processing fees so that we don't lose money," but to keep the whole 30% cut is just petty.


Are they obligated to do business with you? Typically the answer is no, but some countries (like Germany) stores can't ban people if they're the only store in a town. I'm not sure if this would work for Apple, but it might if you already own an iDevice.


I couldn't say. But here's the bit of their terms of service (for USA) that mentions refunds:

> All Transactions are final. Content prices may change at any time. If technical problems prevent or unreasonably delay delivery of Content, your exclusive and sole remedy is either replacement of the Content or refund of the price paid, as determined by Apple. From time to time, Apple may refuse a refund request if we find evidence of fraud, refund abuse, or other manipulative behavior that entitles Apple to a corresponding counterclaim.

Which makes it sound like they aren't granting refunds at all for anything except failure to deliver the product.

And yet when I look at their actual refund request form it has options for "I did not mean to buy this, child bought without permission, I did not mean to subscribe, I did not mean to renew subscription, my purchase did not work as expected, in-app not received." So clearly not all purchases are final.

I don't think it's a good look for Apple to be issuing refunds at their sole discretion and then turning around and making someone else pay for it. You're just supposed to trust them that the magic fraud prevention box is doing its best?


As far as I know, in EU, you have a right to return anything that you bought online, no questions asked.


> In some jurisdictions they are required by law to grant refunds.

I think the jurisdiction you’re talking about is the EU, and it’s not quite that clear cut.

As a general rule online merchants do need to provide refunds, unless it’s a digital good, and they provided an explicit warning during the checkout flow that the sale isn’t refundable.

If you ask for refunds from Apple for apps they’ll introduce that warning into the checkout flow for future app purchases, which will disappear again after enough purchases.

So Apple do have some basic, compliant, controls that means you can’t just keep buying apps and getting refunds.


I've never heard of any jurisdiction where unconditional refunds are required. A lot do require refunds if the product is faulty but that's different.


https://europa.eu/youreurope/citizens/consumers/shopping/gua...

> In the EU you have the right to return purchases made online or through other types of distance selling, such as by phone, mail order or from a door-to-door salesperson, within 14 days for a full refund. You can do so for any reason – even if you simply changed your mind.

There is a potential exemption for digital content "if you have already started downloading or streaming it and you agreed that you would lose your right of withdrawal by starting the performance," but Apple does not appear to have its customers agree to that.

Specifically called out in their UK conditions:

> Right of cancellation: If you choose to cancel your order, you may do so within 14 days of when you received your receipt, without giving any reason.

https://www.apple.com/legal/internet-services/itunes/uk/term...

Presumably in other European terms as well, I checked the UK because it's in English.


> Apple does not appear to have its customers agree to that

Actually, with an EU iTunes account, you have an additional popup dialog you have to agree to with every in-app purchase where you have to agree that it does not qualify for the exemption.


That popup will only appear if your account has already been flagged by Apple for refund abuse. It certainly does not appear every time.

They have an "I would like to cancel this purchase" option in the EU for a reason, which gives you an unconditional refund within 14 days as long as you didn't get that popup when purchasing.


FWIW, I don't recall ever seeing this in the UK - I've just tried an in-app purchase, and it just gives the "Double-Click to Pay" FaceID screen (which lists description, account, and price, but no information about refunds/exemptions).


The popup will appear after approving the Face ID prompt IIRC, as an additional confirmation before finalizing the transaction, but as I said it only starts appearing if Apple detects refund abuse and flags your account.


The jurisdiction that will come to most minds is the EU, but it has exemptions for digitally downloaded content and unsealed software.

https://europa.eu/youreurope/citizens/consumers/shopping/gua...


Apple explicitly does not claim that exemption, the 14 day no-questions-asked refund period is called out in their terms and conditions.

> Right of cancellation: If you choose to cancel your order, you may do so within 14 days of when you received your receipt, without giving any reason


Apple will start applying that exemption if you abuse their refund process. One or two refunds in a short period is usually enough to trigger it, and it disappears again after some “good behaviour”.


I don't know why you're being downvoted, you're completely right. If your account is flagged, they will show an additional popup like this: https://9to5mac.com/wp-content/uploads/sites/6/2015/01/b7lgr...

It seems pretty random when it's applied though. Some got it after just one refund, meanwhile I've had multiple refunds, and I got that popup once for a $1 purchase but then never again and I was able to request a refund again.


Europe does have 14 days refund for online orders, without conditions.

https://ecommercenews.eu/online-returns-in-europe/


In Sweden you have to explicitly waive your right to a refund. Otherwise you can do it for 14 days.


Source? Cause this sounds like wishful thinking.



https://qz.com/1683460/what-happens-to-your-itunes-account-w... -fraudulent gift card

https://support.apple.com/en-us/HT208856 -a problem with the payment method

https://discussions.apple.com/thread/250384392 -credit card fraud

I asked for you to cite sources on Apple banning people for repeatedly claiming a refund. Not for using a stolen credit or gift card.


The theme is fraud which is what large amounts of refunds are treated as.

Cite me that it's not fraud if that's not good enough for you, I'm not really interested in proving fraud is not just allowed to run rampant in a payment system in the very thread about how doing this exact thing would be abusive and need to be stopped somehow.


You don't know that large amounts of refunds are treated as fraud, its just wishful thinking, as i thought.

In the EU i have a right to a refund, there is no part of that right that forbids me from repeating that purchase. Since we have established that Apple don't suffer financially from obeying these rules to the letter, i see no incentive for them to treat this kind of thing like fraud.

They might, but you have not established this, and i don't think its a fair assumption to make.


You have the right to refund not the right to sale, which is what banning fraudulent transactions is.


Okay, I'm now convinced you don't know what fraud is.


Apple will ban adversary’s account which could be fake ID with balances loaded from iTS cards bought with stolen CCs.


Getting a refund from Apple is really difficult, so I don’t think this would be a problem.

I once forgot to cancel a subscription, cancelled one day after renewal, and they would NOT refund me. It was a time based pricing model, so it’s not like I could’ve used any in-app credits.


Not for apps, at least in the UK - I've had four different apps (and one in-app purchase) refunded for a variety of reasons[1] without an issue.

[1] One listed features that were actually (expensive) in-app purchases, one didn't work, a new app had been released but they were still selling the old non-updated one as well (and I bought the wrong one), and one was just really clunky and borderline unusable; the in-app purchase was purchased by mistake (my thumb was resting on the home button and I hit something that triggered a purchase in the app by mistake, so it went straight through TouchID)


Returns are limited. At some point I returned 3 or 4 things pretty quickly, because I had an old iPad and some apps didn't advertise compatibility well enough and then you get put in a "special" category of "you can't get a refund unless you are very, very obnoxious or there is a very real reason".


It's like credit card charge back, you will get banned for abusing the system.


It cuts the other way too--if you have too many charge backs you can get das boot from your payment processor.


Apple doesn’t grant refunds willy nilly (anymore).


this would happen to you with paypal and credit card chargebacks, no idea if this is still the case (but it wouldn't surprise me). you lose the money and an additional 10$ fee, for every transaction. so someone could send you 5$ in 5 transactions, chargeback and you'd be out of 55 dollars.


Why should the developer pay the refund!? Isn't the user buying from the store (not the developer)!?


The developer pays Apple, not the end user.


It will not cost them money, per se. Apple is keeping money from you.


Per the linked twitter thread:

> Yeah Apple keeps their 30% no matter what. So if someone refunds an app they get the whole amount back, Apple keeps 30%, and the developer has to cover that extra amount


Seems like a pointless technicality. If somebody refunds my $100 app and Apple "keeps" $30 from me, that means the next person who buys my app only earns me $40. I've lost $30 either way.


Or if the same person buys the app again later (maybe using a different Apple ID) then you lose 60$ out of the money they would have paid for your app - to view it a different way.


If your app costs $100, and you only sell 100 copies, and they all ask for a refund, then at the end of the month you owe Apple $3000?


The fact that that is even a thought screams silly and childish in my mind, but then again life has taught me that 'maturity' really is a social construct and the rule of law and contracts really should be the only baseline expectation of human behavior from strangers.

Also - that plotline from SV where he just buys pizza from thd pizza startup that is operating at a loss seems like the same idea as this but just slightly different. Business is funny


It's a bit different when a company is completely voluntarily engaging in self-destructive behavior - when it comes to the app store it is voluntary that folks post their apps there but Apple has an absolute monopoly on the market.


That nuance makes a major difference for sure in the situation. Mind I'm not rationalizing any behavior from either party. It's more an observation on the state of current affairs and how we've allowed it to come to this.


Oh it's absolutely terrifying - I just think it's important to highlight that in this situation there's a large power inbalance that doesn't exist in the SV example. It's likely most developers didn't walk into having an App knowing how this weird refund rule worked, so for most folks (if this is an issue) you've got the sunk cost of building the app already and have the choice of 1) putting up with Apple's arbitrary rules or 2) unlisting your app from the store and accepting that you'll never see another dime off your labour.


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...

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


"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?


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.


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.


cc @dang


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.


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.


The site guidelines ask you to email hn@ycombinator.com instead of doing this. Had anyone done so, we might have seen it and been able to do something in time.

https://news.ycombinator.com/newsguidelines.html


This aged poorly.


And fast.


See this comment elsewhere on the thread: https://news.ycombinator.com/item?id=23992485

If you charge $10, you get paid $7, and if the customer refunds, Apple removes $10 from your account – you'll be $3 worse off than if the customer never purchased anything.


Actually, elsewhere on the thread, a few other folks note that this behavior did not occur for them, even though the terms allow it.

Unclear whether it happened in this case.


I'm the guy that posted that excerpt from the agreement. I was actually shocked that no one else had, as there are millions of copies of it out there.

But I do appreciate the anecdotal stories from folks that actually processed refunds.

Apple is entitled to yank the extra 30%, but it seems that they don't do it. That's not uncommon. Lawyers will often add stuff to contracts that they don't intend to enforce, to give them leverage and cover, in unique situations.

I have never had to process a refund, so I don't know.


EDIT: LOL the guy retracted it and noted that he was mistaken. Every clown who repeated this and argued the unfairness of it, like rattray here -- delete your accounts.

>If you charge $10, you get paid $7, and if the customer refunds, Apple removes $10 from your account

BUT APPLE DOESN'T DO THIS

There are literally dozens of developers with monetized apps saying that Apple does not and has not done this in this thread and replies to the tweet. There is one guy misrepresenting some facts. The overwhelming truth according to the pitchfork mob of HN is the lie. Amazing.

The gullibility of this crowd is simply incredible. Do you not think this would be bigger news than "hey look, some guy says something billions of dollars into app store sales".

cc @ dang -- rattray is intentionally spreading hilariously dumb misinformation to make HN look like a bunch of stupid assholes.

Hilariously this is auto-dead. Of course it is. Yet another of so many times HN has been so catastrophically off the mark. This place is a den of absolute idiots, time and time again. And when it is realized it goes to auto-dead time. Absolutely fucking embarrassing for anyone who is proud of their association with this shithole of stupidity.


On the Play Store there is a two hour window after purchasing apps where you can simply return to the store and refund your purchase yourself as the 'buy' button temporarily turns into a 'cancel purchase' button. This feels like the future to me, not some regressive scheme where refunds are discouraged and 'taxed'.


Absolutely – I don't want to feel bad for the developers of apps I return either. Sometimes the app just isn't very good, or doesn't do what I thought it would. I shouldn't have to feel guilty about returning it.


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...


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.


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


They also keep 100% of what they make after refunds have been processed and yet another cut is taken.


The idea that they could make less than 100% of the money that they "make" under these terms reminds me of the Simpsons episode where Bill Gates "buys out" Homer's fake business Hyperglobalmeganet.


He's referring to the fact that most commerce on the App Store is for physical goods and services (Airbnb, Amazon, Uber, food delivery, etc). Apple doesn't take a cut of those transactions.


Yeah, they also don't take a cut of the regular day job salary of an app developer who writes an app on the side, or his inheritance from his mother, or his niece's dog.


They do if your service is subscription based.


Two options:

1) Free apps with advertisements. Paid apps are by far the minority.

2) I guess this statement is related to subscription models like spotify. If you acquire the user outside of the apple ecosystem and they subscribe on your own website and then download your free app from the app store, you get to keep 100% on the revenue that the user generates as well.


Ah, the ad thing makes sense. It's technically true but the meaning conveyed in the statement is quite different.

As for the subscription model, I've thought about that but developers that aren't huge companies have a hard time NOT integrating in-app purchases for cloud services (see "Hey", which had to use social media to get their update approved [1]), so it couldn't be the "vast majority of apps".

[1] https://www.theverge.com/2020/6/18/21296180/apple-hey-email-...


A statement from the IRS - "For the vast majority of Americans, taxpayers keep 100% of their after-tax income"


lol


Apple doesn’t take a cut from advertising, which funds the vast majority of apps.


That’s true, and makes a weird incentive for advertisements. Ads revenue is apple-tax free


No, you just aren't seeing the 'tax' the same way. Google (and Facebook, and admob, etc) all take a cut of ad revenue, and it's even higher than 30% - in some cases much much higher.

[1] https://support.google.com/adsense/answer/180195?hl=en


Apple doesn't take a cut of your advertising revenue, and most apps are ad-supported rather than paid.

That's why it's true.


No most apps aren’t ad supported mostly games are. The ad supported apps are not real business but side hustles or one time, one hit apps that die quickly.


Most apps by app title, not by usage.

It's precisely the long tail of side hustles with ads that make up most apps.


Perhaps he means that they keep 100% of their 70% ;)


It's up to interpretation.

Tim Cook is saying developers keep 100% of their cut of the sale.

And it sounds like you interpret Cook's statement to mean developers keep 100% of the entire sale.


He’s probably saying these are free apps which Apple doesn’t take any money for, and the money the developers keep are from ads or fees from clients and so on.


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