AppStore’s Refund Problem

When we purchase a camera at BestBuy and are not happy with it, we return it to BestBuy and not Nikon/Canon right? I think this direct return policy has to be defined well for AppStore which currently doesn’t seem to exist. I have used ‘Report Problem’ option in iTunes, but despite clicking that button, nothing happens. There has to be a ‘Refund’ option for AppStore.

AppStore is a great distribution platform and it has helped us reach users from all around the globe (Interestingly, Russia was the second best selling country, following US, for some of the apps earlier this month). AppStore helped us reach tens of thousands of customers so far and there are some handful users who had different expectations on our apps due to several reasons. They contact us directly asking for a refund.

When users contact us directly, I provide refund. In some cases, it was $0.99 and in some cases $6.99. In all cases, I used PayPal to refund the amount to our users (luckily, all users who asked for a refund had a PayPal account). But this process/transaction is outside of the AppStore. It has to be part of the AppStore which is convenient to both developers and users. The current approach of providing refund externally (through PayPal, for example) has the following issues…

Here are the problems I see with a refund process that is outside the AppStore…

  • When a user requests a refund from a developer, the developers have no idea if the user actually purchased the app (Apple doesn’t share info of customers with Developers, which is fine)
  • If a refund is provided using an external process (like PayPal), the developer has to refund the entire amount including Apple’s 30% commission . This means, the developer is at a 30% loss for every refund he provides with an external process
  • After the refund is provided with an external process, the user still has access to the app.

I wish Apple comes up with a formal refund policy. Given Apple’s speedy enhancements to AppStore, I have no doubt this will come. Its a matter of ‘when’ rather than ‘if’.

Apple informed developers that iTunes Connect will be down for maintenance during Christmas. Should we expect new functionality such as Refund in their new update? I sure do.

If you are a developer, how do you issue refunds? As a user, did you receive refunds from Apple for AppStore purchases?

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