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Cellphones Businesses The Almighty Buck Apple

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."
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iPhone App Refund Policies Could Cost Devs

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  • by Richard_at_work ( 517087 ) <richardprice@nosPAm.gmail.com> on Saturday March 28, 2009 @08:20AM (#27369369)
    But either way, Apple is still providing a service here that both the developers and the consumers are using. Just because the consumer requires a refund doesn't make the cost of providing that service magically disappear.
    • by Anonymous Coward on Saturday March 28, 2009 @08:24AM (#27369389)
      From the article:

      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.

      • by SausageOfDoom ( 930370 ) on Saturday March 28, 2009 @08:50AM (#27369497)

        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.

        • by Jahf ( 21968 ) on Saturday March 28, 2009 @10:05AM (#27369829) Journal

          Part of the problem IS Apple though. They take a TON of time releasing fixes and updates for some apps. I've got an app, which was one of the reasons that convinced me to buy an iPhone, that took 3 months for Apple to release the update. But it had been in queue after being submitted by the developer for over 3 -months-.

          Sorry but no, Apple has a cash cow with the store ... and many other companies are releasing competing stores ... Apple should refund the cost to the customer, too. Or have a "restocking fee" that they won't refund and pocket that. Especially since the entity that determines whether the refund will happen is Apple. The entity that determines the validity of a refund needs to have some skin in the decision.

          It won't happen today or even next year ... but Apple is shooting the iPhone in the proverbial foot. Android is continually improving their dev environment and has much better store policies. Blackberry is releasing their store soon and while I doubt their policies are better on the store, their messaging capability still can't be beat. Apple needs to find ways to -strengthen- their position with developers, not piss them off.

          • by Anonymous Coward on Saturday March 28, 2009 @10:33AM (#27369985)
            apple wants fewer, better apps. This is an effective way to do it.
            • by torkus ( 1133985 ) on Saturday March 28, 2009 @12:35PM (#27370647)

              idk why this is modded funny. The biggest problem with open platforms is the huge quantity of junk. By setting a bar (which, honestly, is fairly low) they help eliminate some of the crap. This just refines the process.

              Better that they don't have the good apps buried and not making enough sales.

              I don't really like apple much at all but they built the platform. If you want to develop for it AND use their app store AND use their billing/payment system to earn yourself money...well you play by their rules or go to another platform. It still kinda sucks, but it's their game so their rules.

        • by GooberToo ( 74388 ) on Saturday March 28, 2009 @10:09AM (#27369847)

          Which makes it sound a bit more reasonable.

          How is holding developers to a standard above what is required of NASA, "more reasonable"?

          • by Stele ( 9443 )

            Which makes it sound a bit more reasonable.

            How is holding developers to a standard above what is required of NASA, "more reasonable"?

            Or Apple for that matter.

      • Re: (Score:3, Interesting)

        by arikol ( 728226 )

        not only bank charges but server, bandwith and maintenance staff.

        Nowhere else in retail does the original maker get 70% of the price to himself. People count themselves lucky to receive 10-20%

        Apple is treading on thin ice, but has some serious arguments behind themselves.

        And BTW, if the makers themselves were running their own store you can bet that the losses from returns would not be any lower.

        • by ConfusedVorlon ( 657247 ) on Saturday March 28, 2009 @11:35AM (#27370297) Homepage

          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;
          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.

    • by tepples ( 727027 ) <tepples AT gmail DOT com> on Saturday March 28, 2009 @08:30AM (#27369417) Homepage Journal

      But either way, Apple is still providing a service here that both the developers and the consumers are using. Just because the consumer requires a refund doesn't make the cost of providing that service magically disappear.

      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?

      • The same way they do when they release through any other publisher - or did you seriously think the publisher eats the cost of the refund?
        • by fractoid ( 1076465 ) on Saturday March 28, 2009 @10:58AM (#27370101) Homepage
          Are you insane? O.o if I wholesale a shirt to K-Mart, they sell it and the customer brings it back, I'll refund them what they paid me. There's no way in hell they get their retail price (double or more the wholesale price) out of me though!
        • Re: (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: (Score:2, Informative)

        by gnasher719 ( 869701 )

        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.

        • By taking the blogger to court for tortious interference with his business.

          Which country's court?

        • by dryeo ( 100693 )

          And where do they get the money for lawyers, court costs etc? Especially when the suite is appealed and delayed for years

    • How does the cost of the developer magically disappear? Why should a developer have to pay back more than he was originally paid? I don't know how you justify keeping a commission on something that's returned.
    • Given that Apple has to approve all the apps that go on sale, they should take more responsibility for their quality. There should be some value added for that 30% tax.

    • by nysus ( 162232 )

      Let's now apply some logic to your statement.

      On a 5MB $9.00 app, apple gets 3 bucks when it's returned.

      On a 5MB $3.00 app, apple gets 1 buck when returned.

      So, obviously, the commission is not going to cover apple's cost of delivering the software.

      This is quite obviously an arbitrary way for apple to try to get one over on developers. What do you think it really costs apple to return an app when the process is totally automated?

  • by Nakor BlueRider ( 1504491 ) on Saturday March 28, 2009 @08:23AM (#27369379)
    ...my opinion of them drops more and more. I think my opinion of them can't get worse, but they always manage to come up with some way. :\

    I only hope that the devs are all quickly made aware of this and decide to do something to fix it, be that changing platforms, harassing Apple for a change, or whatever else works for them. There's no cause at all for devs to risk a loss of 30% of their initial charge per sale.
    • by geoff2 ( 579628 ) on Saturday March 28, 2009 @09:43AM (#27369747)

      Every time I see an article about Apple which gets basic facts about the company's policies wrong, I get just a little more annoyed.

      Seriously. There is no "90-day" refund policy. Read the iTunes Store terms and conditions [apple.com] -- no mention of a 90-day period. In fact, the only mention of refunds is that you can get a refund if they can't deliver the purchase to you; otherwise, as it clearly states, "no refunds are available."

      Moreover, there are thousands of app store applications and developers. Is there a single one who has complained about this refund policy screwing them over?

      Methinks overheated rhetoric like the one in this post and tomhudson's below about how developing for the iPhone used to be fun but is now "about money and control and refunds and chargebacks" is farcical.

      • Re: (Score:3, Interesting)

        by makomk ( 752139 )
        No, there is currently no 90-day refund policy. TFA is about Apple making a change to the developer terms and conditions to allow them to add a 90-day refund policy, and to screw developers over in the fashion described. They're not doing it yet, but they're clearly at least thinking about it, and probably planning to do so.
      • Actually, I agre 100% with you - the article is fud. Read further.

        Methinks overheated rhetoric like the one in this post and tomhudson's below ...

        You mean this one? http://apple.slashdot.org/comments.pl?sid=1178961&cid=27369677 [slashdot.org]

        Developing for the iPhone used to be fun. It used to be about doing things the right way. It used to be something that you could sink your teeth into when the mundane chores of programming for a living got you down. It was something cool and exciting; a way to spend your spare time on an endeavour you loved that was at the same time wholesome and worthwhile.

        It's not anymore. It's about money and control and refunds and chargebacks, telling others what to do and doing what you're told. It's about who can distort reality the longest or get the fanbois to shout the loudest or mislead the most people into a walled-in garden in order to legitimize the "Cult of Stevie.". Individuals notwithstanding, Apple and the iPhone store as a whole has lost track of where it's going, and has instead become obsessed with process and mechanics, money and control.

        s/bsd/iphone/gmi; FTW:

        FreeBSD used to be fun. It used to be about doing things the right way. It used to be something that you could sink your teeth into when the mundane chores of programming for a living got you down. It was something cool and exciting; a way to spend your spare time on an endeavour you loved that was at the same time wholesome and worthwhile.

        It's not anymore. It's about bylaws and committees and reports and milestones, telling others what to do and doing what you're told. It's about who can rant the longest or shout the loudest or mislead the most people into a bloc in order to legitimise doing what they think is best. Individuals notwithstanding, the project as a whole has lost track of where it's going, and has instead become obsessed with process and mechanics.

        Source: http://uncyclopedia.wikia.com/wiki/BSD_is_Dying [wikia.com]

        I guess I should have put the <sarcasm> or <crymeariver> tags around it ... because I agree 100% with you that this whole article was a bunch of disinformation. It should be bleedingly obvious that (1) the story itself is highly inaccurate - these terms were in the original dev agreement, so this is not "news", and further, that apple has said that it doesn't apply it that rigorously (probably saving it only as a stick for when some dev. really abuses users, eg: putting out spamware, spyware, or malware). But who sticks to either common sense or actual verification when it's so easy to go "OMG LOOK WE'RE BEING FUX0RED! It's just the nature of the beast :-)

  • by superid ( 46543 ) on Saturday March 28, 2009 @08:32AM (#27369423) Homepage

    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.

    • by peragrin ( 659227 ) on Saturday March 28, 2009 @08:54AM (#27369511)

      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.

      • And who says Apple didn't arrive at the 30% commission to include credit card fees? No one is going to be mailing in cash, so it was an easily predicted cost.

        But the point is, if a clause is not going to be enforced, and you don't want people to get all sensitive about it, remove it from the contract.

      • Micropayments are doomed to failure as they will never be cost effective as the transaction charges are more expensive than the payments.

        Perhaps you meant

        Micropayments as currently implemented are doomed to failure as they will never be cost effective as the transaction charges are more expensive than the payments.

        I see nothing wrong with the general principle of micropayments. Is there any reason that some company shouldn't in principle be able to run a micropayments service and still make enough money overall to make it worth their time?

        • Take a look at services like Xbox Live. Micropayments are done in "xbox points" which you buy in bulk just for that reason. Of course, apps are priced such that you'll never use up all your points, but that's just a detail!
    • by wurp ( 51446 ) on Saturday March 28, 2009 @12:27PM (#27370593) Homepage

      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.

  • by Anonymous Coward on Saturday March 28, 2009 @08:32AM (#27369437)

    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]

    • by MightyYar ( 622222 ) on Saturday March 28, 2009 @08:56AM (#27369527)

      As that C-Net article points out, anyone who has dealt with credit card processing companies recently would gladly take Apple's deal - even if they were charging you back 100%, which they are not doing currently. I shit you not, if you make "too much" money, the processing companies will hold your money for up to 6 months - just because they can justify it with their terms of service. The supposed reason is to limit their exposure to chargebacks, and your only recourse is to sue them and lose your merchant account.

      At least, that's my personal experience... :)

      • Re: (Score:3, Interesting)

        by bastion_xx ( 233612 )
        From a risk perspective, the merchant's bank is right to do this (reserves). The bank is on the hook in the event the merchant defaults and cannot pay the refund from a successful chargeback.

        What does stink is the heavy handed approach banks take to the reserves. There seem to very few classes of merchants that they lump people into for reserves. Make sure to at least get compound interest on the rolling reserve!
        • by MightyYar ( 622222 ) on Saturday March 28, 2009 @09:59AM (#27369803)

          I'd have no problem with them holding sufficient reserve to refund chargebacks based on the 3-year chargeback history, for example. Which, in my case would have been close to zero. Mysteriously, after the market crash they all of the sudden started holding 100% of the money after previously holding 0%. Soooo... first some phone calls, then some letters, then some poking from lawyers, and now a lawsuit. With a little luck, the money will be freed up slightly before it would have been if we'd just waited :)

        • Re: (Score:2, Troll)

          by tompaulco ( 629533 )
          I guess it depends on what kind of volume the merchant is doing. For my business, we do a paltry $7,000 a month in CC sales, however, we close batches daily, and settlement is usually 3-4 business days later. We have had only one attempted (and successful) chargeback in our 3 year history, and the chargeback was less than 1/10 of a typical days sales, and they simply deducted it from our settlement. No need to hold funds.
          In our case the one chargeback was a woman who bought product in our store, walked out
      • I've never heard of a card processor doing that, sounds like you need to dump the one you have real quick. We are using HSBC, not exactly the most user friendly bunch, their documentation is crap, and setting up their CPI or API for the first time is a task I'm glad I don't ever have to do again, but locking you out of your own money, never happened.

      • by Animats ( 122034 ) on Saturday March 28, 2009 @12:30PM (#27370609) Homepage

        I shit you not, if you make "too much" money, the processing companies will hold your money for up to 6 months - just because they can justify it with their terms of service.

        You need a merchant account with a real bank. This is more work to set up, but your merchant bank account doesn't have to be controlled by the card processing service. When I did this, I used Bank of America. There are monthly charges, and you may have to keep a deposit (a CD, for example) in the bank as security. But the money goes into your account the day after the card is charged.

        People in the "adult" industry have much tougher banking problems, because most of the big banks won't take their business. The terms from the "adult" credit card providers are much tougher, and many of them are ripoff outfits. (I once got a heated twenty minute lecture on this subject from a San Francisco bondage model and web site operator; she'd lost hundreds of thousands of dollars through troubles with an offshore "adult" credit card processor.) In that area, you do see multi-month holdbacks.

  • by Anonymous Coward on Saturday March 28, 2009 @08:32AM (#27369439)
    not in defense of apple, only that they are all equally evil.
  • They're still extremely cagey about letting just any old riff-raff develop for their platforms, and still not realising at all that encouraging developers to write for their platforms in any way that they can is more than compensated for by people buying their products because of the applications available and the installed base it brings.
    • Exclusivity creates profit.

      The more you charge for designer hardware, the less people will buy them, but the more exclusive it'll be seen; which in turn fosters an opinion that your stuff genuinely IS worth the extra cash. People will pay that extra for the status it represents. It also allows you to make a bigger profit on each sale, specially when you control the retail outlets (either directly with your own stores, or indirectly by setting the rules for third party retailers).

      The same logic applies to th
      • In the absence of sufficient information, the price can be used as a metric for guessing quality. It better the hell not be your only metric, but the statement that "things that are free" are of lower quality than "things that require stuff in exchange" is not false or even often false.

        The count of "things that are free" that are also better quality than "things that have price" is quite small. Software is one of the few areas where they exist at all, but let's be honest: the vast majority of software bei

      • I wish I hadn't already posted, because you'd be getting a ++insightful.
      • Another thought on the exclusivity angle....

        As much as customers buy into the entire designer / cool package Apple offer, the same applies to developers. This means people will put up with shit they wouldn't normally, just to be part of the in-crowd. Apple do need to be careful however; people do have limits.
  • by Teppy ( 105859 ) * on Saturday March 28, 2009 @08:55AM (#27369523) Homepage

    I run an online game [atitd.com] and "chargebacks" are really annoying. How it works is that if someone calls their credit card company and says "I don't recognize this charge", Visa immediately removes the charge and debits our account the $13.95 monthly fee, plus a $25 "chargeback fee". We then have the opportunity to provide documentation that they really did sign up for the game.

    If Visa then determines that the charge was legitimate, we get the $13.95 back (but not the $25.) If they determine that the charge was not legitimate, then we get neither back, and are charged an additional $25.

    The worst that's happened is that someone used a bunch of stolen credit cards to create dozens of accounts over several months, always being careful to use open proxy servers. So we ended up with $1800 in chargebacks, and no way to stop them!

    What we ended up doing was explaining the situation to everyone in the community, and when this guy contacted any of his in-game friends ("hey it's me, just had to create this new character") they would tell us and we would shut the account down right away and reverse any charges, but what a PITA!

    Eventually this guy moved on, but we never did find him. Some social engineering indicated that he was from playing from internet cafes in Romania, but that's as far as we got.

    • Re: (Score:3, Interesting)

      by Lord Duran ( 834815 )
      "If Visa then determines that the charge was legitimate, we get the $13.95 back (but not the $25.)" How the hell would this hold up in court? You legally prove the customer was an asshole and you did everything as legitimately as possible, kept all the records, anything, and still VISA takes money from you? It's not a small amount either, $11.05 per claim. All your competitors need to do is get up a bunch of enough people, or the same people again, say 5000, have them sign up and cancel the charge, and you
      • by Teppy ( 105859 ) * on Saturday March 28, 2009 @09:38AM (#27369725) Homepage

        It would hold up in court because I agreed to this by contract, as do any merchants that accept Visa/Mastercard. Discover Card is totally fair though - they reverse the charge, but don't tack on fees, or have a punitive policy when the merchant contests the chargeback.

        Actually, I should do my small part to use market pressure to combat this - give an extra in-game perk, or a token discount amount to anyone that pays by Discover Card. (Or Amex; not sure about the rules for that card.) With a game as small as ours it would be nothing more than a statement, but statements are important. Hmmm...

        • Edit the ToS to include a "fradulent chargeback" fee. If the user issues a chargeback and it's later overturned, charge their card an additional $30.

          • That doesn't really help the case in question, where the chargebacks were legitimate and the result of stolen credit cards. You'd just be punishing the people whose cards were stolen even more, if you could even hold them to it since they're not the one who agreed to the ToS.
      • Re: (Score:3, Insightful)

        by the_raptor ( 652941 )

        And then no CC company ever does business with you again. This is also why CC security is so shit; they aren't using their own money.

      • If you hate a merchant and want to stick it to them in your own petty way, don't refund a transaction, just charge it back. That way, no matter what the outcome is, they'll have to pay a non-refundable chargeback fee.

        By the way, if you issue a refund with a normal merchant, they will not refund the transaction fee and in fact you will pay a second transaction fee for the refund! Only Paypal will refund the transaction fee.

        In other words, what Apple is doing is the industry norm. Their transaction cost is

    • If the customer goes directly to YOU, it's not a "chargeback". What Apple is talking about is a refund, not a disputed credit charge. Completely different mechanisms, and different costs.
    • Bad, but not as bad as Visa

      I remember one time, i baught computer components from an US store (i'm Canadian) and the store called my place to make sure i was doing a legitimate transaction.... the fact that i only had a cellphone and no landline that i could acess made them cancel the transaction and refund me...

      Visa's transaction statement was 2 transaction with the store... one paying them and one paying me... both transactions had currency exchange fees... so Visa tried to steal money from me for a transaction that the store deem

    • This is the reason why credit cards are so insecure. Banks are not adequately incentivized to prevent credit cards from being abused. Merchants eat the loss while the banks make money either way. I will bet you that credit cards will become much more secure if banks were legislatively forced to eat the cost of consumer fraud. I hate big government, but there is a market dysfunction here: there are only a few major credit card companies (Mastercard, Visa, American Express, and if you want to be generous, Dis

      • by Rich0 ( 548339 )

        Additionally, Visa/MC have some anticompetitive provisions. If you issue cards under one of these labels you're not allowed to issue cards on any label other than the other one. So, a bank could issue a Visa and a MC card, but they couldn't issue a Visa and a Discover card.

        I think that this control over the financial transaction market really is becoming a barrier to progress. It wouldn't be hard to design credit cards using RSA that would make fraud on the part of both the consumer and the merchant almo

    • So I take it you aren't using any of the technologies intended to help reduce this possibility, like, AVS and CVV2 validation, GeoIP lookups compared to address, postal lookups, velocity checks, or ... anything, really? If your merchant account provider can't provide you with technology to do all this dump them and get one that is proper. (Note, yes, I'm biased, I'm responsible for having written payment gateways for merchant account providers and ISOs)

  • Myth: RTFA (Score:5, Informative)

    by codepunk ( 167897 ) on Saturday March 28, 2009 @08:57AM (#27369537)

    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.

  • When the Infinite SMS debacle struck (Inner Fence made an app for 99c which used Googles API to send SMSes cost free, Google then removed the API and people are *still* moaning about it on the Google Groups SMS Labs page), Inner Fence said this:

    Apple does not give app developers any way to perform refunds. Hopefully, at 99Â people will feel like our app paid for itself after only a few messages.


    So, apparently Inner Fence are wrong? Lying? Or

    • by e4g4 ( 533831 )

      Apple does not give app developers any way to perform refunds.

      App developers are not in charge of Apple's store. App developers cannot initiate refunds. Users, however, can complain to Apple to initiate a refund, which Apple will then allow or deny. So Inner Fence was not wrong - they don't run the App Store, so they don't initiate refunds.

    • by leamanc ( 961376 )
      No, they are not lying. Apple does not currently have a refund policy for the App Store. They are considering one that, as the title of this /. post says, could cost devs.
  • by Anonymous Coward on Saturday March 28, 2009 @09:00AM (#27369555)

    Duh! It's the restocking fee of course...to offset the cost of putting that icon back among the others at AppStore.

  • by fatp ( 1171151 ) on Saturday March 28, 2009 @09:05AM (#27369573) Journal
    1) Make every Apple staff buy an iPhone
    2) Make every Apple staff buy as much 3rd-party iPhone App as possible
    3) Request refund
    4) ???
    5) Profit!
  • You people! (Score:2, Insightful)

    by danwesnor ( 896499 )
    If people are returning 7 out of 10 purchases, you still break even. If your software is getting 7 of 10 returns, it's either horribly broken or doesn't do what you say it does, so you shouldn't be getting paid, anyway.
  • After bricking unlocked iPhones, kicking applications off the iPhone store that might even slightly compete with iTunes in the far future, filing a wave of patents on basic well-known computer science and openly sodomising iPhone developers in the city square of Palo Alto, Apple Inc. today filed a Form 8-K with the Securities and Exchange Commission declaring that it was openly adopting Evil(tm) as a corporate policy [today.com].

    "Fuck it," said Steve Jobs to an audience of soul-mortgaged thralls, "we're evil. But our stuff is sooo good. You'll keep taking our abuse. You love it, you worm. Because our stuff is great. It's shiny and it's pretty and it's cool and it works. It's not like you'll go back to a Windows Mobile phone. Ha! Ha!"

    Steve Ballmer of Microsoft was incensed at the news. "Our evil is better than anyone's evil! No-one sweats the details of evil like Microsoft! Where's your antitrust trial, you polo-necked bozo? We've worked hard on our evil! Our Zune's as evil as an iPod any day! I won't let my kids use a lesser evil! We're going to do an ad about that! I'll be in it! With Jerry Seinfeld! Beat that! Asshole."

    "Of course, we're still not evil," said Sergey Brin of Google. "You can trust us on this. Every bit of data about you, your life and the house you live in is strictly a secret between you and our marketing department. But, hypothetically, if we were evil, it's not like you're going to use Windows Live Search. Ha! Ha! I'm sorry, that's my 'spreading good cheer' laugh. Really."

    • Actually, the idea that Apple sees itself as some kind of BDSM dungeonmaster and that Apple freaks love the punishment that's dished out to them... kinda makes sense when you think about it.

      "It just crashed and took your day's work with it, added to that you have RSI because the mouse was designed by an idiot!"
      "...yeah... but... it felt SO GOOOD!"
  • If the sale is canceled, why should they get to keep the profit?

    If that wasn't the case, just get all your friends to buy stuff and keep the 'bonus' when they return it..

    Sounds like AIG :)

  • lets do the math (Score:5, Informative)

    by v1 ( 525388 ) on Saturday March 28, 2009 @10:19AM (#27369887) Homepage Journal

    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. ;)

    • it also occurs to me that you could view this as Apple issuing a chargeback the same as the credit card processors do. So apple gets a chargeback fee from their cc processors, and then issues an identical chargeback to the devs. Seeing as Apple is already having to pay for that chargeback they got, technically their chargeback to the devs should be larger, to cover the cost of the chargeback they are having to pay, plus the cost of the service rendered to the devs without profit. So I suppose in that res

      • Apple doesn't have to pay a chargeback fee for a return agreed between them and their purchaser. It is just a normal transaction rate, which for them is probably about 4% or less.
  • with such a bullshitty draconian refund policy, developers wont risk their asses developing for your platform. brutal realities of business.

    you either improve it, or fall behind android in regard to apps. your choice.

  • ...it's been reposted to more websites.

    I've debunked it several times now, and got bored of doing so, and instead just posted an article [wooji-juice.com] to my company website about it (because my company does iPhone development, and therefore would be directly affected were this true).

    If you're too lazy to click through, the Cliff's Notes version is:

    • There is no change to the contract clause. They made that bit up entirely.
    • Apple do not take back 100% of the purchase price as the article claimed - and I have the spreadsheets
  • This has apparently been debunked, so the story summary on the front page is not true. The editors need to update the summary.

    • yeah... its obvious Apple themselves leaked this bs FUD story just to draw out the applephobes who, like predictable drones, simultaneously and ironically draw attention to how stupid they are (inferring anyone that hates Apple is stupid), that this policy is actually satisfactory (and now absent-minded devs are reminded of how fairly Apple treats them, boosting that fragile dev morale), and insinuates that somehow any poor review of Apple is immediately suspect. Very crafty, Apple...

    • The editors need to update the summary.

      but that would attract far fewer irate flamewars!

  • article is misleading Apple will only refund for a none delivered apps.

  • So Apple rips off its developers to ensure that it receives a profit no matter what. So half the players of your game get tired of it after 3 months and demand refunds so that in essence they got to play it for free. When this happens Apple keeps all their profits and the developer has nothing. What happens if everyone eventually returns it for a refund? Do you pay Apple?

    So why is this news, and why are you surprised?

    If you ever had a reason to want to avoid the Apple monopoly App Store as a devel

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