Apple Criticized by Korean Game Developers for its App Store Refund Policy

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Apple has been criticized in South Korea for its mobile app refund policy which game developers say removes them from the process and is regularly being abused.

Apple controls the App Store payment refund process for paid-for apps and determines whether to give refunds to consumers. According to The Korea Times, because Apple does not provide information about who has been issued a refund, developers have no other choice but to manually track down users and check if they continue to use the charged content they have already received the refunds for.


Apple says it does not provide information about users who have requested a refund in order to protect consumer rights. But some users have reportedly abused the loophole in Apple's refund policy to purchase charged content multiple times, request refunds and continue to consume the content without actually paying for it. According to The Korea Times, some of the abusers even run profitable businesses to operate the refund process on others' behalf.

Mobile game companies in the country are said to be taking their own measures to counteract Apple, which has so far remained silent on the issue. Korean game development studio Flint said it had independently tracked down 300 users who they suspected of abusing the App Store refund policy, and pledged to "root out the abusers" by requesting judicial authorities for an investigation.

Next Floor, distributor of Korean game Destiny Child, also complained about the difficulties in dealing with abusers without Apple's help.
"We are regulating those who abuse the payment process and damage other users under our management policy," the company said. "Unlike other application stores, Apple does not provide refund information to the game companies and we are having difficulties in promptly counteracting the problem."
Mobile game studio Nexon and Longtu Korea said it had asked Apple for the lists of users who requested refunds several times, but the company did not respond. "I cannot understand Apple's policy in that it does not provide the list of people who abuse the system even when it is already causing problems in the market," said a source from the studio.

By contrast, Google's app store refund policy states that users can receive refunds on charged mobile content only once if they request it within two hours after payment.

Article Link: Apple Criticized by Korean Game Developers for its App Store Refund Policy
 

Robert.Walter

macrumors 68000
Jul 10, 2012
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I always assumed that Apple was able to remotely delete refunded apps.

Is this not the case?
 

JosephAW

macrumors 68020
May 14, 2012
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Apple needs to automate this so the user can ask for a refund within a 24 hour period / so many refunds per month and the app and iOS checks the app status during that time and found refunded it disables the app in all places and all downloads.
 

jezbd1997

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Jul 8, 2015
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I always assumed that Apple was able to remotely delete refunded apps.

Is this not the case?
Nope, I even remember years ago when I asked for a refund for a bunch of accidental purchases (they were made under the wrong account) and I deleted all of them assuming they'd be deleted automatically, but found out that wasn't the case the next time I needed a refund. Should've kept them all haha!
 

Brian Y

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Oct 21, 2012
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But you can't *not* have a refund policy. I have, myself, gotten a refund for a game, when the game stopped working after upgrading from iOS 6 to iOS 7. The app was still installed and could still run (well, as far as it ever did after upgrading), but couldn't be updated or re-downloaded.

IMO, the amount of money they're going to spend chasing down and suing the small % of customers who abuse it isn't worth it. All businesses have to deal with a small % of fraud - how many retail places have had TVs returned as faulty when a new one comes out, or people had "left" their laptop in the trunk of their stolen car, or had their iPhone suddenly develop an intermittent fault just after a small scratch appears on the screen.

It's a cost of doing business.
 

nicho

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Feb 15, 2008
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But you can't *not* have a refund policy. I have, myself, gotten a refund for a game, when the game stopped working after upgrading from iOS 6 to iOS 7. The app was still installed and could still run (well, as far as it ever did after upgrading), but couldn't be updated or re-downloaded.

IMO, the amount of money they're going to spend chasing down and suing the small % of customers who abuse it isn't worth it. All businesses have to deal with a small % of fraud - how many retail places have had TVs returned as faulty when a new one comes out, or people had "left" their laptop in the trunk of their stolen car, or had their iPhone suddenly develop an intermittent fault just after a small scratch appears on the screen.

It's a cost of doing business.
not the same thing when it also affects their reputations and allows people to get ahead within whatever game they're operating at lower cost than people not abusing the system.
 
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Mahadragon

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May 14, 2011
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But you can't *not* have a refund policy.
It's a cost of doing business.
Very true. I wish these Korean companies would get a life and wake up. They are probably losing far more money from employee theft and laziness than a few app users.

Every business has shrink built into their monthly costs. Shrink is everything from stuff people return that they cannot get credit for, employee theft, customer theft, stuff that gets broken on the floor, etc. You have to expect these things to occur and build it into your costs.
 
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Anonymous Freak

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It took me a while to figure out what the big deal was.

It's not that people buy a $1.99 game, then get a refund and keep playing.

It's that people buy $100 in in-game "currency" using an in-app purchase, then get a refund, and keep the $100 of in-game "currency". Then do this again. And again. And again.

Oh, you want to have the best fort in Clash of Clans? $100 in in-game gold, and you can do it quickly! Then get a refund on that in-game gold. Want to get good Pokemon faster? $100 in in-game gold and you can lure more Pokemon to you (for a long time.) Then get a refund on that in-game gold.
 

syan48306

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Apr 15, 2010
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It took me a while to figure out what the big deal was.

It's not that people buy a $1.99 game, then get a refund and keep playing.

It's that people buy $100 in in-game "currency" using an in-app purchase, then get a refund, and keep the $100 of in-game "currency". Then do this again. And again. And again.

Oh, you want to have the best fort in Clash of Clans? $100 in in-game gold, and you can do it quickly! Then get a refund on that in-game gold. Want to get good Pokemon faster? $100 in in-game gold and you can lure more Pokemon to you (for a long time.) Then get a refund on that in-game gold.
Not quite true. In clash of clans, if you request a refund in $100 worth of gems, the game takes the gems spent from you and you end up with thousands of gems in debt. You can still earn gems the normal way but it goes to offset that negative gem count.

Don't know how clash of clans can do this but Koreans can't figure out what the refund was for...
 

69Mustang

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Jan 7, 2014
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Very true. I wish these Korean companies would get a life and wake up. They are probably losing far more money from employee theft and laziness than a few app users.
This is a dumb and insulting conclusion to make. What are the employees stealing... 1's and 0's from the app code? :rolleyes: Laziness? Did you just pull that out of your butt to disparage the Korean's? Considering the vast, vast, vast majority of app developers don't make much to begin with, weeding out abuse of the return policy seems pretty darn important.

Every business has shrink built into their monthly costs. Shrink is everything from stuff people return that they cannot get credit for, employee theft, customer theft, stuff that gets broken on the floor, etc. You have to expect these things to occur and build it into your costs.
We're not talking about a grocery, electronics, or any other type of physical goods store. It's an app store. There should be no shrink. The only shrink occurs within the return process and when that process gets abused, it's a problem. @Anonymous Freak gave a good example at post 11. Not sure if the process works exactly like that, but at least his example makes sense. Laziness. Hahahaha
 
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dantastic

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Jan 21, 2011
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A non issue really. The developer has access to the receipt for each purchase and can check if it is still valid at any point in time.
They just need to keep track of the receipts, basic in-app programming ffs.
 

Romy90210

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Sep 18, 2013
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These Korean developers whining about this issues are no real developers, if they can't figure it out a away to take away whatever people get a refund for... They sound like scripts kiddies to me...
 

Nramos33

macrumors newbie
Aug 16, 2014
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It took me a while to figure out what the big deal was.

It's not that people buy a $1.99 game, then get a refund and keep playing.

It's that people buy $100 in in-game "currency" using an in-app purchase, then get a refund, and keep the $100 of in-game "currency". Then do this again. And again. And again.

Oh, you want to have the best fort in Clash of Clans? $100 in in-game gold, and you can do it quickly! Then get a refund on that in-game gold. Want to get good Pokemon faster? $100 in in-game gold and you can lure more Pokemon to you (for a long time.) Then get a refund on that in-game gold.
That is an issue, but if you see this has happened under an AppleID, you'll see case notes. There are 2-3 different ways something can come into the iTunes department. You can get a refund once, maybe twice, after that it will get declined.
 
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Anonymous Freak

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So... Commenters, we don't need to be specifying "Korean developers" or calling them out by their nationality. This is a problem to *ALL* nationality of developers, it just happens that this article was in a Korean newspaper, so the developers they interviewed are Korean. Saying things like "These Korean developers whining about..." or "I wish these Korean companies would..." is unnecessarily adding nationality (and by proxy race) in to a complaint. Would you have made the same comment if the developers had been from California? Or Texas? Would you have specified "These Californian developers..." or "I wish these Texan companies..."?

If not, then leave "Korean" off the description you post. Their "Koreanness" has nothing to do with the issue.
 

benjitek

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Sep 23, 2012
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I always assumed that Apple was able to remotely delete refunded apps.
Is this not the case?
No, but they can make an app stop working. Happened to me with Navigon -- I'd requested and received refunds for the app and IAP's -- it continued to work for about 6 months, then suddenly wouldn't launch. I'd actually forgotten about asking for a refund and contacted the AppStore's support, they replied with the refund request info.
 

M2M

macrumors 6502
Jan 12, 2009
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I am lazy to look everything up, but you can of course validate in-app purchases (and surely also app purchases programmatically)

https://developer.apple.com/library/content/releasenotes/General/ValidateAppStoreReceipt/Introduction.html

Hey Korean developers I guess you owe me now 5% of your income as I showed you how to do it ;)

Having said that it may be impracticle for a simple tool app (i.e a flashlight app) to track the purchase status as you need Internet connection to talk to apples servers - but surely online games can do it.

I fail to see how googles 2h timeframe for refunding is of benefit. Let's say I get Pokémon go in-app purchases. Surely 2h is enough to buy whatever I need and then refund. Same if I talk about a fraudulent refund of a full app.

I remember however a friend of mine had the issue that the download of a game (GTA) took him longer then 2h and later it didn't work on his android. He didn't get a refund. He switched to Apple (not the only reason)
 
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thisisnotmyname

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Oct 22, 2014
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No, but they can make an app stop working. Happened to me with Navigon -- I'd requested and received refunds for the app and IAP's -- it continued to work for about 6 months, then suddenly wouldn't launch. I'd actually forgotten about asking for a refund and contacted the AppStore's support, they replied with the refund request info.
I bought Quicken a few years ago through the Mac App Store and then found out it wouldn't do something simple (log in under my Intuit account I think but it's been a while) so I requested and received a refund. About a month later I started receiving App Update notifications for it. I couldn't figure out how to get them to away, they kept coming back, so eventually I tried to do the update to stop the notifications. At that point I found out two things, I couldn't update because the system was smart enough to know I had returned it and I was getting the notifications because I wasn't smart enough to realize I didn't delete the app off the system after getting the refund :p

(no I wasn't using it, it didn't work, just hadn't removed it and it wasn't locked to the dock yet because I couldn't get it to work)
 

Brian Y

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Oct 21, 2012
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This is a dumb and insulting conclusion to make. What are the employees stealing... 1's and 0's from the app code? :rolleyes: Laziness? Did you just pull that out of your butt to disparage the Korean's? Considering the vast, vast, vast majority of app developers don't make much to begin with, weeding out abuse of the return policy seems pretty darn important.


We're not talking about a grocery, electronics, or any other type of physical goods store. It's an app store. There should be no shrink. The only shrink occurs within the return process and when that process gets abused, it's a problem. @Anonymous Freak gave a good example at post 11. Not sure if the process works exactly like that, but at least his example makes sense. Laziness. Hahahaha
And what exactly are people "stealing" by "returning" 100 gold coins in an app - a couple bytes of database space?

I operate my own small business, a small hardware device with an online system connected - getting in on the "smart home" craze. Manufacturing is outsourced, so we don't have to deal with manufacturing shrink, we just pay a per-unit contracted cost. The online service, as with any of these games, is practically zero cost-per-unit. If someone cancels a service, or asks for a refund (which we always offer). Yes, hardware space and bandwidth cost money, but there is no "direct cost" per-user.

Hardware-wise, in the past month, we've had $2388 which I'd classify as shrink at retail price, $912 at cost price. That includes:

- 1 unit damaged in warehouse
- 3 units lost by couriers shipping to customer
- 4 "change of mind" hardware returns that couldn't be re-sold
- 1 unit that was bought via PayPal with a stolen credit card (we had to swallow the cost)
- 3 units that were returned as being faulty, which we determined was fraudulent - 1 had a smashed screen which couldn't have happened during qa/shipping (impact mark), one which was obviously dropped and cracked but otherwise seemed to work fine, and 1 which was returned because apparently only the accessories were in the box, not the unit itself (even though we could see the unit was online, and connected to our service - not for long though!)

At cost price, for us that was around 0.9% shrink vs revenue, and around 1.4% vs per-item profit margins (not taking into account operating costs here). That's something we have to budget for - we *know* it's going to happen, and we take that into account. 100% of our shrink costs come from hardware, not software. Out of that, only a third of shrink was down to "fraud".

Saying shrink can't happen with a digital product is silly. Of course it's going to happen. If you're dealing with people, at some point you're going to deal with fraud. Fact of life. The only difference is the physical cost behind it doesn't scale the same way as with physical products.

Here's two examples:

1. Company A sells a video streaming service for $10/month. Someone purchases a subscription uses a stolen credit card, and watches 50 films. The credit card company (rightfully) does a chargeback 14 days later, and the company cancels the service. A movie averages at 1.5GB, using 75GB bandwidth. They pay AWS $0.06/GB for bandwidth, which equates to $4.50. They also have to pay the rights holders $0.10 per viewing as part of their agreement. That's $5, meaning that the total cost of the fraud is $9.50 - that's $9.50 worth of shrink.

2. Company B offers a mobile video game for free on the App Store, and sells packs of "100 gold coins" for $5. When a user buys coins, they can use them to buy items in the store - the transaction is purely in the game, and the only result of buying the coins is a database entry to tell the game "hey, user X bought 100 coins". Somebody buys 100 packs of coins for $500, buying all sorts of virtual items for their character, again, all database entries. The user claims their child accidentally bought the coins, and Apple refunds the $500. Company B hasn't lost money, other than perhaps a couple of cent in bandwidth costs. Shrink is effectively 0.

That's why I don't understand them chasing so much - unless there is a physical per-unit cost behind it, it's really not worth it. So what if someone buys a game or coins and returns them, they've lost a sale, sure, but they haven't lost money.
 
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Ma2k5

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Dec 21, 2012
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Very true. I wish these Korean companies would get a life and wake up. They are probably losing far more money from employee theft and laziness than a few app users.

Every business has shrink built into their monthly costs. Shrink is everything from stuff people return that they cannot get credit for, employee theft, customer theft, stuff that gets broken on the floor, etc. You have to expect these things to occur and build it into your costs.
You are wrong, you see, if I know that they won't do anything if I abuse the system, as word goes around, more people will do it.

As you can see in this thread, a lot of people, including me, didn't know about this abuse. If you don't add preventative measures, people will abuse it.

In every business, there are counter-measures put in place for fraud, to de-incentivise them. If you do nothing, it will just spiral out of control.

You must be living in wonderland to think they should just ignore it and put it down to "cost of business". You mention silly examples like employee theft when every company has measures to prevent/minimise them. That is all the companies want to do, add preventative measures for the fraud, why not? Nothing wrong.

I've worked extensively in the financial and insurance industries and believe me, they invest a lot into preventive measures, and for good reason. There are large crime syndicates who abuse any little loop-hole they can, it must be actively fought. This app-refund policy is just another one - as you read, there are services which do the fraud for you now!
 
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