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Apple’s iPhone App Refund Policies Could Bankrupt Developers (techcrunch.com)
56 points by vaksel on Mar 26, 2009 | hide | past | web | favorite | 25 comments



Egads, the capacity for hyperbole never ceases to amaze me.

I have offered refunds for any reason, no questions asked, for the last 3 years. Just between you and me, the 30 day limit on the website is a little white lie -- I think the most ever was 2 years, 1 month after the initial sale. I also proactively remind my customers about it if they report bugs that I can't fix immediately.

You know how many refunds I've given out, with that absurdly generous policy? About 3% of sales.

Now since I use a payment processor which is well-known for being developer friendly, chuckle Paypal, those refunds never cost me a penny. (+) But even if they did cost 30%, that would be under 1% of gross sales.

You think "bankrupt" might be a little strong?

P.S. There are numerous reasons why the App Store model is a terrible, terrible deal for developers. This isn't one of them.

+ Actually, that isn't true, come to think of it. For the 3 refunds I've given after 90 days passed, I had to refund via check, so Paypal would have kept their $1 in fees then. OK, so this policy has cost me $3 and change. My bad.


I think the real problem will be how easily a refund can be generated. If it's a one-click refund, I suspect people will buy a game, play it out and then request a refund.

Hopefully, they require people who want refunds to jump a hoop or two.


Alternatively, developers could create games that are not played-out in a month. It would probably also be a good policy on Apple's part to say that if you purchase something in-game via the new in-app payment system then you can't get a refund for the original app (or the upgrade.) This would lead to cheap teasers that would effectively allow users to test-drive the game with an in-app upgrade to the "real" game coming once the user has played a level or two and decided they actually like the app.


It's a nice policy in theory, but what happens if you buy something in-app and they don't give it to you? I'd say that would be the best time for a refund, of both your original price and the upgrade price, but now you're screwed.


The disturbing point about this is that the developer may have to pay back more than they received. That is unfair, Evil even, whether or not a developer goes bankrupt. And notwithstanding the fact that Apple incurs a cost to provide the service.

The only extra cost I can conceive of as fair is paying for 70% of the payment processing. Remember, free apps get all the rest of the App Store services at no cost.


Just to note, this policy isn't new. It has been in place since the SDK came out. So far, it has been neither enforced by Apple nor abused by customers.

Source: http://www.pocketgamer.co.uk/r/iPhone/iPhone+news/news.asp?c...


exactly! not sure why this uproar at this time but this has been there for a while. Regardless, I am hoping that Apple will fix it either on its own or due Facebook-style user revolt :)


I suspect the uproar is coming at this time because someone actually took the time to read the agreement, rather than automatically clicking through it. Those agreements might say that I have to give up my first-born child and I'd never know it. I just click through.


This doesn't make sense. I can see a refund policy within 48 hours of the purchase to ensure no one is hoodwinked for an app that does nothing. So hold the payment for 72 hrs and if no refund is requested, release the payment to the developer.

90 days is just unreasonable considering the majority of apps in the appstor have really short game play time.

Whoever making these policies changes at Apple needs stop coming up with such policies and think twice about it. I came up with a better resolution in less than 30 secs.


Android has that (but in 24h)


Do users need to give a good reason to receive a refund (e.g., the app crashes frequently, misleading description, etc.)? If so, then this may not be such a big deal.


You should never require a "good reason" for a commodity software refund:

1) Adjudicating reasons requires valuable support time. Refund and move on does not.

2) This causes customer friction. The annoyance of the prospect of having to justify yourself to an uncaring CS grunt in India destroys the value of having the guarantee in the first place, which is to make purchasing from you look like a risk-free endeavor.

3) Any customer can get a refund any time they want by calling up their credit card company and humming a few bars about "Internet merchant did not live up to their claims". This is called a chargeback and it means the merchant just lost $15 to $25 plus the refunded amount.

4) Product quality is much more effective than hoops in decreasing the number of refunds. ("Good relations with the customer" is more important than either. You know how bedside manner is a better predictor of malpractice claims than clinical outcomes? Same story.)

[Edit to add: incidentally, the reason Apple has refunds is to zealously protect their "All interactions with Apple should be mindblowingly awesome for our customers" reputation. This is the same reason that they make it essentially impossible for developers to be anything other than an anonymous cog behind a shiny new icon -- anything else and you're a risk to the True Apple Brand Experience. And that is why I will never, ever develop for any platform that insists that they own the customer relationship.]


the reason Apple has refunds is to zealously protect their "All interactions with Apple should be mindblowingly awesome for our customers" reputation

Funny you say that, because you can't return Apple hardware without incurring a 10% restocking fee.

(source: http://store.apple.com/Catalog/US/Images/salespolicies.html#...)


I doubt such an approach would work 10 years from now when I predict people will be much less honest.


Human nature is not subject to Moore's Law.


The solution here is obvious: Give your apps away for free, but make up for it in volume...


how do you make up for it when your app is free? unless you're doing in app purchase or ads in your app.


That was the joke....


by having humor ?


lim Apple = Microsoft

t→∞

(Eh, HN wasn't made for displaying calc, I guess.)

They're starting to show some of the monopolistic tendencies. For example, newish iPods can only connect via iTunes (at least they said they were going to do that), which not only kinda sucks for people who liked using a different program that didn't suck memory, usually even when "not running", but also made it impossible (or at least hard) for Linux users to connect iPods at all.


Seems to me that Apple is a lot worse than Microsoft, and has been for a very long time. Microsoft prioritizes developers much more than Apple ever has, that I know of.


The exact text says that Apple "reserves the right to keep the commission". I don't think that's synonymous with "will always keep the commission", unless there's something weird about legal jargon that changes the meaning of "reserves the right". It would help to actually hear a story from an iPhone developer who was debited the 30% commission during a refund.


This is totally overboard. Apple clearly didn't intend this 'loophole' and if it is not good for the developer (especially in such a dramatic way), it is not good for Apple. It will change.


> Apple clearly didn't intend this 'loophole'

How do you know?


Apple bashing + techcrunch = no credibility at all




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