You buy an app for $10, Apple gets $3, the developer gets $7.
You refund the app (through the Apple App Store), you get your 10$ back, but that whole 10$ comes from the developer, unlike the 7/3 split when you first purchased it.
So in the end, the developer has lost money due to the refund.
https://twitter.com/twolivesleft/status/1288625617873694721
Apple does not keep the commission when an app is refunded.
I just looked at our app store connect Sales and Trends page and for a $10 item: Apple proceeds $7 to developer and takes back $7 again from the developer on a refund.
Lesson learned for me to verify claims before supporting them!
If I get a 30% commission for a sale when the customer is referred by me and at some point in the future the customer asks for a refund I don't give my commission back. Our transaction was done when the original sale was made.
The developer has no capacity to deny a customer, yet has the responsibility for the bad customers shopping someone else's store.
The ethics of this scheme are debatable but it should be assumed that some refunds are legitimate and Apple loses tangible customer $LTV from some refunds.
Compare it more to sales tax, which is a much closer comparison because it is required as part of the transaction in a monopoly ecosystem (much like a sales tax is in a country).
If a vendor adds tax to a price, and then charges the customer, and the customer gets a refund, the customer get the sales tax back, but the vendor then doesn't have to remit that tax to the government (and if they've already remitted it, they can apply for a credit).
Because that’s basically Apple’s whole thing. If you want you can just ignore their existence. You can run a very successful business on the web, Android, Windows. But getting your app on iOS and in front of their customer base is really valuable. Better than any billboard or FB ad. They know that customer acquisition is hugely expensive and that being able to sell on their platform will make you more money than not and so they charge like it.
The difference between having Spotify on iOS that can’t mention that premium exists (because that would be using iOS as a marketing vector which Apple charges for) and therefore has to do their own customer acquisition, and being able to convert customers in-app makes a big difference.
We were talking about selling in the iOS ecosystem, and the mechanics of that process.
No one said there weren't other options, and "take your ball and go home" is obviously always an option but that's not what was being discussed.
(Note that it turns out that Apple does not keep their 30% when it refunds an app, so the original point wasn't valid).