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Re:When a customer refunds your paid app, Apple refunds its ... by gerdesj on Wednesday July 29, 2020 @06:48PM (#23992415)
"where losing $2 at volume is fine."

Sorry, when is this fine?

A dev flogs an app at 10 and pays 3 to Apple. Then on a refund they lose 3 and the end user has no incentive to even delete the app. Nope, I won't entertain that nonsense.

The only way that I can see for that model to play out is for the dev to factor in a lossrate x 1.3 uplift for their app. That means owners of shiny iStuff are paying Apple an additional unannounced "tax" based on their app churn. Use and discard more apps, then you pay more for the privilege. A dev would have to become a loss adjuster as well: "Hmm assume a 10% return rate" - so the upcharge on my app will have to be:

* My app should cost 10, assuming a fair market. * I lose 3 on a refund, which happens on 1/10 sales (I was paid 10 on sale, I paid 3 to Apple, I refunded 10 and hence lost 3)

So my price adjustment would be 10 + (0.1 x 3) = 10.30. Yes, it looks like a simple uplift will deal with this. Sales: x, churn rate: c, Apple tax: a. => s' = s + (c.a)

That is anti-competitive behaviour on a gigantic scale. Apple are making the apps that are developed for their platform automatically more expensive by a process that looks suspiciously like stealing.

I call that parasitic.

Re:When a customer refunds your paid app, Apple refunds its ... by waheoo on Wednesday July 29, 2020 @09:36PM (#23993421)
You're forgetting development and marketing costs.

If there is a sunk cost component that number skyrockets.

Try adding a $5 customer acquisition and $1 developer time.

Thats a $1 profit, you need to sell 3 apps to cover the cost of apples fees. You also need to sell another 6 to cover the sunk costs you don't get back.

So 1 refund costs you 9 sales.

To cover the 1/10, you'll need to charge 10.90, or more likely 11 to cover the moving 30%.

But this is just to break even with your original $1 profit margin.

Re:When a customer refunds your paid app, Apple refunds its ... by jachee on Wednesday July 29, 2020 @10:11PM (#23993680)
I'd argue that if 10% of your paying customers are refunding your product, you have a product problem.
Re:When a customer refunds your paid app, Apple refunds its ... by waheoo on Wednesday July 29, 2020 @11:47PM (#23994430)
Depends on your product, model, and demographic.

At work our refund rate is like 30% for Japan. Investigating this, it turns out there is a cultural behaviour where converting at a higher rate early and refunding if it's not a good fit is the normal way of doing things.

And in a past life, general 4% refund/return rate is pretty common across most ecom markets.

Not saying apps are in this boat but if you ignore refunds in business you're in for a bad time.

Re:When a customer refunds your paid app, Apple refunds its ... by jaifraic on Wednesday July 29, 2020 @11:51PM (#23994451)
Or a userbase that for some reason dislikes and abuses you. Maybe you have made enemies because of some random political statemant. A large enough group could ruin you.
Re:When a customer refunds your paid app, Apple refunds its ... by gerdesj on Thursday July 30, 2020 @07:21PM (#24003882)
I deliberately simplified things. My "10" is the costed price of the app.

Ignoring all other factors, flogging the app on Apple automatically introduces a parasitic "tax". That is the hallmark of a monopoly.