iPhone App Refund Policies Could Cost Devs 230
CBRcrash writes "Apparently, if iPhone users decide that they want a refund for an app (users can get a refund within 90 days, according to Apple policy), Apple requires that developers give back the money they received from the sale. But, here's the kicker: Apple will refund the full amount to the user and says that it has the right to keep its commission. So, the developer not only has to return the money for the sale, but also has to reimburse Apple for its commission."
Re:Not to be an apologist... (Score:4, Informative)
Apple charges a 30% commission on all paid apps sold through the App Store. So basically, developers get 70% of a given sale but if the end-user wants a refund, the developer has to pay Apple 100% of the sale.
We are assuming that Apple still has to pay bank fees on a charge if a consumer wants a refund, but certainly bank charges don't amount to 30 percent.
The point is that the charges are unfair.
My first month of sales (Score:5, Informative)
I just got my sales reports for february (my first month) and I have one return. My app sells for $2.99 and I get $2.10 per sale. I was debited $2.10 not $2.99 on this statement so maybe this is not in effect.
App Store refunds: Much ado about nothing (Score:5, Informative)
cnet already looked into this and debunked it two days ago: http://news.cnet.com/8301-13579_3-10205293-37.html?tag=mncol;title [cnet.com]
Credit card companies do this. (Score:5, Informative)
Re:Not to be an apologist... (Score:5, Informative)
I'd normally be the last person to defend Apple, but to be fair to them it appears the only time a customer can claim a refund is when the developer doesn't release in time, or releases a broken product. Which makes it sound a bit more reasonable.
Re:My first month of sales (Score:5, Informative)
shh don't tell that to /.'ers. they don't know how businesses work or their expenses so they think that apple is evil.
What people really don't understand is that credit card companies double and sometimes triple dip.3% of that $2.99 went to the credit card company. or $.09 since it was a refund they still charge for the transaction. So now it is $.18 Currently Apple has $.89 that is disappearing. Now if there was an error in apples transmission to the credit card company that gets charged too(1 in 20 or so)., and that is just credit card charging fees.
Apple isn't keeping their share either that too gets refunded. however since slash-dotters aren't lawyers they can't read the legalese that states that.
Micropayments are doomed to failure as they will never be cost effective as the transaction charges are more expensive than the payments. Of course since users never se those charges they don't understand them.
Myth: RTFA (Score:5, Informative)
Read the bottom of the article, the wording has been in the contract since day one. In addition Apple charges back the 70% not 100% in the event
the customer is even able to return it.
Re:Every time I see an article about Apple... (Score:5, Informative)
This is all fairly silly... Apple does not keep the 30%: [cnet.com]
Updated 4:00 p.m. - An Apple representative said the company's policy concerning refunds and developers is that when a refund is granted on a purchase made through the App Store, Apple returns the customer's money and debits the developer's account by 70 percent of the application price, or the revenue the developer had gained on the sale. The company does not charge the developer an additional 30 percent during the refund process, the representative said.
Please develop Android apps instead (Score:3, Informative)
Since Android came out I've been cheerleading/fanboying for it. I own a G1, the 1.1 version of the OS is about to come out, and although there are many apps for it already it needs a lot more, and a lot of people who find the platform fun.
Android ought to be the platform you thought Apple used to be. No stupid rules, no Apple kowtowing, just write your code. If you don't like the way Android Market works (and it can't be as bad for developers as Apple's) then you can still publish your .apk file anywhere else you please online.
lets do the math (Score:5, Informative)
from TFA:
"Let's say you sell a 99-cent app. You get 70 cents per sale. You sell 1,000 copies and make $700. Let's say your return rate is a whopping 3 percent (good God! Why are 3 percent of your customers returning the product?!). So you pay back $30; net $670.
and further...
Transaction fees for online credit card processing can run as high as 25 cents to 30 cents per transaction, plus a percentage of the amount. But consider the 99-cent application, the most predominant price used on the App Store.
A micropayment transaction (less than $10) processed by PayPal carries a 5-cent transaction fee plus 5 percent of the amount. Assume that Apple has negotiated a similar fee with its payment processors; it would therefore be charged roughly 10 cents on each 99-cent purchase, reducing its cut of that sale to 20 cents. If it were charged a similar amount for a refund, its cut would be down to 10 cents.
Obviously, Apple, with the biggest music store in the United States, processes an awful lot of small transactions and therefore probably gets some sort of attractive volume discount that's less than the example provided above. But that doesn't mean that it gets that service for free: processing transactions on the Internet costs money, whether you are Apple or Joe Developer.
Updated 4:00 p.m. - An Apple representative said the company's policy concerning refunds and developers is that when a refund is granted on a purchase made through the App Store, Apple returns the customer's money and debits the developer's account by 70 percent of the application price, or the revenue the developer had gained on the sale. The company does not charge the developer an additional 30 percent during the refund process, the representative said.
So it would appear that Apple is at least being as nice about this as all the other publishers, isn't creating any outrageous chargebacks, and has said this was their policy from day 1, two important things the submitter seems to have overlooked in their summary.
Any credit card purchase you make, if you take it back and get a refund, you get 100% of your money back. What happens to the 3-7% the credit card processor skims off the sale? The store doesn't get it back, the manufacturer doesn't cover the charge. The store loses that money, every time. Same thing here, Apple is just passing that small loss onto the developers. But I do see a difference, if you return an item to WalMart then WalMart (the store) eats the difference and Sony or whoever isn't affected. But with ITMS, Apple is providing the devs a service for that cut, whereas WalMart isn't providing Sony a service really. Apple believes that this tilts the burden of the loss to the devs. Also to be fair about it, the devs are chiefly responsible for the number of times their apps get returned. ;)
Re:DoS on developers' bank accounts (Score:5, Informative)
Re:Not to be an apologist... (Score:5, Informative)
not true.
I get 85-90% of all my sales (on Palm software) that I make through Mobihand.com
they provide a similar service to the appstore;
catalogue
payment processing
first line support
of course they don't have the store on the device - and they don't take 3months to approve my apps.
not that I resent the 30% that apple charge. I actually think it is a fair rate for the excellent job they have done in encouraging users to access and buy apps.
Re:DoS on developers' bank accounts (Score:2, Informative)
Releases through any other publisher are not refundable except for exchange for the exact same product (i.e. you got bad discs, you can take it back and get the same piece of software). What stops someone from buying the software and then getting a refund on it and pirating the software otherwise? The only store I ever remember allowing software returns for cash was called Microcenter and they stopped allowing open-box software returns years ago.
Re:Every time I see an article about Apple... (Score:1, Informative)
Re:DoS on developers' bank accounts (Score:2, Informative)
So how does the developer of a pay application prevent someone from doing a DoS on the developer's bank account by asking readers of his blog to buy the app and get a refund?
By taking the blogger to court for tortious interference with his business. See Wikipedia: http://en.wikipedia.org/wiki/Tortious_interference [wikipedia.org] or google for any other sources.
Re:My first month of sales (Score:5, Informative)
Same here. Feb was my first month, selling for $1.99, one return. I was debited $1.40, the same that I am credited for a sale.
Re:Not to be an apologist... (Score:3, Informative)
Re:Not to be an apologist... (Score:3, Informative)
Um, why? Because people are satisfied with good apps and want to continue using them? And they are unsatisfied with poor apps and have no reason for them to be on their phone?
What's more likely is some people buy an app, 'back it up', return it for a refund, and find some hack or backdoor that permits them to still use the app.
How is this at all likely? If you can afford a $200 phone + $70-$90/month contract, why would you waste your time "stealing" a $1-$5 app in this way? Sure, some people will do this, but I can't imagine this being common enough for Apple or 3rd party developers to care very much.
Re:Every time I see an article about Apple... (Score:1, Informative)
There was no change - the language in the referred to segment of the contract has not changed. It was exactly the same under the last agreement, and I believe it has been this way since the app store opened.