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When a customer refunds your paid app, Apple refunds its 30% cut [edited]

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Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#441

Post by balls187 »

ChrisMarshallNY wrote: post #428
jclardy wrote: post #278

Earlier quoted context omitted.

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 n…

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…

> 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.

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#442

Post by gruez »

chrisjarvis wrote: post #379

Has anyone confirmed this is true (or is this tweet the only source...)? https://developer.apple.com/forums/thread/105454 "Apple has the RIGHT TO withhold" https://news.ycombinator.com/item?id=23989256 It seems you can only get a refund by reporting a problem, which means if your app works as described you shouldn't be able to request a refund.

Here's a second source: https://techcrunch.com/2009/03/25/apples-iphone-app-refund-p...

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#443

Post by balls187 »

Thaxll wrote: post #144
wlesieutre wrote: post #7

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?

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.

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#444

Post by ChrisMarshallNY »

balls187 wrote: post #441
ChrisMarshallNY wrote: post #428

Earlier quoted context omitted.

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…

> 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...

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#445

Post by strgcmc »

emtel wrote: post #361
jclardy wrote: post #278

Earlier quoted context omitted.

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 n…

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

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#446

Post by ChrisMarshallNY »

ChrisMarshallNY wrote: post #444
balls187 wrote: post #441

Earlier quoted context omitted.

> 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,…

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...

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#447

Post by yesenadam »

himinlomax wrote: post #417
azinman2 wrote: post #249

Earlier quoted context omitted.

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

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

> 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.

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#448

Post by balls187 »

andreasley wrote: post #195

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...

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.

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#449

Post by xsmasher »

gruez wrote: post #442
chrisjarvis wrote: post #379

Has anyone confirmed this is true (or is this tweet the only source...)? https://developer.apple.com/forums/thread/105454 "Apple has the RIGHT TO withhold" https://news.ycombinator.com/item?id=23989256 It seems you can only get a refund by reporting a problem, which means if your app works as described you shouldn't be able to request a refund.

Here's a second source: https://techcrunch.com/2009/03/25/apples-iphone-app-refund-p...

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

Re: When a customer refunds your paid app, Apple refunds its 30% cut [edited]

#450

Post by xsmasher »

tomduncalf wrote: post #406

Looks like the original tweet may be incorrect according to replies on there, or at least this doesn’t apply to every app, for example: https://mobile.twitter.com/LittleFinLLC/status/1288570444417... Would be great if others could chime in with their experience if they have records to check! My apologies for posting this if it proves to be incorrect, hard one to fact check weirdly.

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