Apple must have the sweetest distribution deal in the entire retail universe, if a report published Wednesday at TechCrunch is to be believed.
The AppStore refund policy allows purchasers a full refund up to 90 days from the date of download of any application purchased in the iTunes AppStore. Which seems questionable enough in the light of, say, the Android Market’s 24 hour return policy.
But a clause in the developer’s contract all iPhone developers must sign in order to have their apps sold in the AppStore indicates that in addition to a three month return policy, “Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the end user.”
In effect this means Apple will charge 100% of the sale price to a developer for every refund given, even though the developer only got 70% of the price of the sale in the first place.
Many iPhone app developers are on the record as having no problem with Apple’s 30% sales commission for applications sold through the iTunes AppStore. The thinking goes that independent developers gain access to many more potential customers by having their products in the widely visited venue, save tons of money on marketing and transaction costs and generally benefit from being associated with the legitimacy of the Apple brand.
When consumers get wind of this policy, which may be a new development, according to the TechCrunch report, developers of some widely purchased though basically useless apps could be in for a rude awakening.
UPDATE: No developer is likely to go bankrupt in the real world, according to a level-headed explanation posted Thursday by Erica Sadun, a developer/blogger for ArsTechnica.
The reason, which makes perfect sense when you think about it, is that Apple never gives refunds, except in extreme circumstances and then, only after causing the customer many headaches.
All the Fart app people can rest easy now.