Apple Making Developers Pay Up For Any Refunded iPhone Apps?

from the restocking-fees dept

Lucretious points to a Kotaku post claiming that Apple is changing the terms for iPhone developers, such that when users ask for refunds, Apple gives them back the full amount but still demands a 30% fee from the developers. For obvious reasons, this is upsetting developers who worry about getting hit with huge chargeback fees. I would imagine that Apple’s response is that if developers make a good enough app, they shouldn’t have to worry about refund requests. But, in the meantime, it certainly increases the liability of being an iPhone developer.

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Companies: apple

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Comments on “Apple Making Developers Pay Up For Any Refunded iPhone Apps?”

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32 Comments
some old guy (user link) says:

Restocking fee is too high!

Really good idea.. but a tad on the high side.

This WILL prevent devs from pricing their apps too high.

Imagine the “I am rich” app… even tho he only sold what.. 8 copies? for 9999$ each, he would effectively owe apple 12k for that PR fiasco. Of course, he never would have tried it with that form of risk.

This is a really good idea.. but apple should have put some restrictions on it so as to not scare off the independents.

Lutomes (profile) says:

Reasonable costs

Assuming apple is saying their 30% goes towards the hardware, bandwidth, software, distribution, testing etc. Its quite reasonable.

If you were publishing your own software, on your own servers and customer asks for a refund. You still incur the bandwidth costs, merchant fees, hardware costs of the server etc. Why should it be a free ride if you use the apple platform?

Anonymous Coward says:

If the apps work then developers don’t have to worry. This is good for apps that sound great but just don’t work or crash every 2 minutes. I am an app store junkie (or at least I used to be) – but I bought way too many apps that just didn’t work or crashed so much I deleted them off my phone. It’s good that Apple is putting this new term on the contract – this should be made more public – because I would definitely purchase more apps knowing that if it did not work as advertise (or work at all – as I experienced in some cases), that I could get a refund – thus increasing business for REAL apps, and killing stupid apps that have no place in the app store.

Anonymous Coward says:

Re: Re:

Does Microsoft give you 30 million potential customers on a single device while also handling all all the hosting, and e-commerce solutions that go along with purchasing applications? No. Not yet anyway – and btw when the Microsoft “Marketplace” does launch they’ll be charging THE SAME as apple (30/70) split but the developer package is not $99 like it is for apple it’s $299.

Anonymous Coward says:

I’m a registered iphone dev and there is nothing about this in the 3.0 agreement, nor has there been any chatter in the dev community. There is still no info on demo sales nor refunds that’s been shared with us. One of the problems with the NDA is that people can make up any stupid rumor and there’s no way to counter it without someone in the know breaking the NDA, like this. As far as I know, this rumor is crap and their source might as well be Jim Cramer.

rwahrens (profile) says:

wait a minute

Tamara,

What do you mean “Apple still gets paid? If they have to give the customer a FULL refund but only demand 70% from the developer, then they are still eating the 30% costs they are NOT asking the developer to pay. They are only asking for the 70% back that the developer got in the first place!

And isn’t this a risk that any developer takes just by being in the business?? Either you produce a product people can and do like and use, or you have to give them their money back when they realize it sucks.

Welcome to the real world – what do people think – Apple will just eat the cost of returns? Not freakin’ likely.

If the app store were mine, I’d have put that in the first paragraph, in big red letters.

TANSTAAFL – There Ain’t No Such Thing As A Free Lunch!

Tamara says:

Re: wait a minute

No rwahrens what you say isn’t correct. Apple demand the 30% payment from the developers. Apple make that quite clear, so don’t know how you could miss that bit. The developer doesn’t get paid at all. Apple still make 30% for all sales, even for refunds, and developers make 70% on items that are kept, and lose 30% on all items that are refunded.

Anonymous Coward says:

Re: Apple should take a small hit for poor approval process

That really doesn’t make sense. Does Walmart give you a bonus when you return something? I mean, they approve of everything their store sells. I don’t like the way Apple does things, but that doesn’t mean I approve of ridiculous statements like this. Unless Apple is charging a 70% cut from the original sale, Apple loses money with every refund.

Weird Harold (user link) says:

In a sense, I think this might help to make developers think twice before releasing a crappy app that over promises and under delivers. I also think it will help to keep app prices reasonable.

If the app is under a certain price (say less than $5), there is a good chance most people wouldn’t even both to return or complain, they would just delete and move on. More expansive (and I don’t know where that point is for his device) and people are more likely to spend them time to complain and get money back.

I don’t think this is going to be a big deal for the 99 cent app guys, just for those selling the significantly more expensive apps, especially if they just don’t deliver on the promises made.

Weird Pancreatic Steve says:

Why would there be ANY apps that are crappy or don’t work? Don’t they all have to be approved by crApple before they make it to the store? If crApple is vetting the products before allowing them in the store (and they supposedly are), then crApple should bear the responsibility for any that don’t perform as advertised.

Weird Harold's former #5 fan says:

RTFA, people!

Since so many people here either didn’t read the article or flunked first-grade arithmetic, here’s how it would work –

1. iPhone customer buys an app for $10. Of that $10, $7 goes to the developer and $3 goes to Apple.
2. Customer decides to get refund on app.
3. Apple gives customer his $10 back.
4. Apple charges developer the full $10 – meaning the developer has to pay back not only the $7 he received from the sale but also the $3 that Apple received from the sale.
5. Developer is $3 worse off than if the customer had never purchased the app in the first place.

Great deal for Apple, not-so-great for developers.

magnafides says:

Re: RTFA, people!

Yeah, it didn’t seem that complicated to me either.

For the fanboys trying to justify this as a “cost-recovering” measure, please explain how Apple’s costs for serving a $50 app are 10x as much as for a $5 app. Even better, please explain how an app download costs Apple even a penny.

D0M1N8R says:

Re: Re: RTFA, people!

I certainly do not consider my self to be a apple fan boy. I tried and returned the iPhone. I dont own a MAC. I dont even use itunes. But because I or anyone else disagrees we must be fan boys! How convenient it must be to put a label on everyone whom does not agree with you.

Why not justify why you do not agree and be constructive?

magnafides says:

Re: Re: Re: RTFA, people!

I actually did justify my position, if you read closely. Presumably, charging developers a fee when an app is returned is to recover some fixed cost to support the download/return process. Keeping the 30% does not support that premise–it is just a money grab.

And to those who say that this will keep poor apps out of the app store, I’d have to ask why Apple doesn’t spend as much time testing apps for quality as they do rejecting them for arbitrary reasons. I mean, they ARE taking 30% for *something*, right?

Hector says:

Kind of like this

This should put a end to the pranksters whom charge some dumb fool $5k for a app that does nothing more then display a picture.. imagine the pay back for all them refunds.. Now whos laughing? LoL

But beyond that it should push developers into not rushing apps out and making sure for the money the customer is getting feature packed software.. It means now they need to rethink the value of their software before pushing it out to the public. Glitchy or over priced software will be penalized by consumer demanding refunds beyond the usual money back.

And to apples defense they should be paid for their services which made it possible to sell your product weather or not the general public likes or hates your product.

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