By Michael Santo
Editor-in-Chief, RealTechNews

A close look at the refund policies clearly written into the developer agreement that devs must sign before being able to sell applications in the App Store shows that if it wanted to, Apple could demand a developer refund the entire amount of a sale to the company, if a customer managed to persuade Apple to give them a refund.

It’s no secret that Apple takes 30% off the top of each sale at the App Store. The problem, according to TechCrunch’s source, could occur if someone manages to pry a refund out of the company (emphasis mine):

In the event that Apple receives any notice or claim from any end-user that: (i) the end-user wishes to cancel its license to any of the Licensed Applications within ninety (90) days of the date of download of that Licensed Application by that end-user; or (ii) a Licensed Application fails to conform to Your specifications or Your product warranty or the requirements of any applicable law, Apple may refund to the end-user the full amount of the price paid by the end-user for that Licensed Application. In the event that Apple refunds any such price to an end-user, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. 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.

So, let’s say an app sells for $10 (yeah, yeah, I know, not too many that expensive). Apple gets $3 off the top. The dev gets $7. If they give the buyer $10 back, they want that same $10 from the dev, meaning Apple still makes a $3 profit, and the sale actually ends up costing the developer $3.

However, is this really blown out of proportion? First, Apple is providing a service of billing, collecting and distributing funds to the developer, much like a credit card. They could claim that all that infrastructure still requires a fee.

That doesn’t means it’s good for the developer; I’m just playing Devil’s advocate here.

Also, let’s look at the iTunes Refund Policy, can we?

REFUND POLICY

All Sales and rentals (as applicable) are final.

It doesn’t sound like too many people could pry a refund out of them.

On the other hand, this points out a missing piece that people have been asking about for a long time: trial versions. Many downloadable applications allow trial versions to be downloaded, but Apple still doesn’t provide that capability at the App Store.

Perhaps, as they roll out the iPhone OS 3.0, they will finally do so.