⇥ More AppStore FUD

Am I the only one who is a little tired about all the AppStore-related BS? I certainly hope not…

Via a Twitter discussion between Chris Hartjes and Derek Martin, I came across this article on TUAW—and its claim that refunds are charged at full price by Apple. This means that, while Apple retains a 30% commission on a sale, it claws back 100% of the original price from the developer in the event of a refund (thus, make $0.70 on a $0.99 app sale, but get charged the full $0.99 back if that customer wants a refund).

There has been constant rumour on this front ever since some genius “discovered” that his agreement for the App Store has this provision and made a stink about it that was immediately picked up by the Intertubes. In fact, as Candace Lombardi explains on CNET, the agreement states that:

[I]f for any reason a customer wishes to return a previously purchased iPhone application within 90 days, Apple “may” choose to give a full refund.

Note that, while the wording is incorrect (Apple will give out a full refund regardless, it’s whether the developer is responsible for the entire amount or not that’s at the heart of the problem), at least CNET qualifies that with a “may.” TUAW has somehow taken this and twisted it around and somehow concluded that Apple is, in fact, doing this on a continuous basis:

As some developers have already discovered, refunds can get expensive if there are enough of them, because Apple retains its 30% commission

Uh, that’s not what CNET’s article says. In fact, that’s not what the agreement that CNET refers to says, either.

From an accounting perspective (as my dear wife would undoubtedly remind me), the clawback could make sense when a sale and a refund happen across two different fiscal reporting periods, depending on how Apple accounts for the commissions it receives from App Store sales (Apple is only an agent of the developer, and if the commission has already been reported as revenue—and therefore taxes paid on it—they may simply want the developer to cover the cost of the refund). In fact, this sounds exactly like the kind of clause that an accountant would want in there. Or it could just be a cash grab… in either case, has anyone ever bothered to verify whether it is true?

I can’t speak for other developers, of course, but I can look into my own financial records and note that, indeed, Apple has never clawed back the entire amount from a refund, regardless of how far off the sale was: