An unfortunate part of Android app sales is getting declined payments, refunds, and even chargebacks. It can be discouraging when you find that income you could have earned is snatched back from you, so it’s best to arm yourself with knowledge of how the system works.
Each market has different rules for refunds, which can play a big part in how many refunds you get. Of course, the refund policy can affect how many people choose to buy in the first place, but it’s harder to measure that.
I’m going to cover a few of the Android app markets that I include in my Android Market Alternatives report and which I also sell my own apps on.
I get updates on my Android Market sales, using the Appmonger app. Since each sale can be refunded within 15 minutes, orders are pending for that period of time. In addition, if there is a problem with the transaction (such as a declined credit card), the transaction is also cancelled.
I haven’t checked to see if these declined cards turn into sales later, but I don’t get the impression that these people come back.
So far, I’ve seen a return rate of just over 10%, and a declined rate of about 5%. That means that out of the people that tried to buy my app, under 85% of those transactions resulted in money in my pocket. Your results may vary, but expect at least a little bit of loss due to the above.
Luckily, I see this information as the month progresses so I’m not surprised when I get my payout from Google.
Until I sent a message to their support team, I was concerned that the Amazon Appstore was neglecting to pay me for some of my app sales. The first month I was missing the income from one sale, the second month was missing four. It looked like the problem was getting worse, not better.
The discrepancies continued, so I contacted the Amazon support team. I got this reply:
The Earnings Report in your Developer Portal account does not include adjustments made after an order is processed. Adjustments include amounts deducted due to declined credit card, charge backs or price changes. The Payments Report is the actual amount payable to you after all the adjustments are included.
So, basically, the amount they send in the “Remittance Advice” email is indeed all they intend to pay me. No further adjustments will be made. This does make sense, though. Although Amazon doesn’t allow returns on Android apps, it does have to deal with chargebacks and declined credit cards. My main complaint is that this data isn’t obvious. Your first warning is when your payment arrives and it’s a little smaller than you expected.
How much has been missing? It has varied, but overall it is just over 6.6% for me. That’s certainly better than the combined 15% that I see with the Android Market, but who knows how much those no-return policies reduce buyer purchases.
Since Amazon delivers your payments about a 30 days after the end of each month (making payments 30-60 days from the date of purchase), I had gotten used to thinking that the figures I saw were how much I would be getting. Now I know to expect a bit of reduction.
This app store hasn’t done well for me at all. I believe the refund period is still 24 hours. I don’t know why, but I have had very few sales on AndroidPIT and a disproportionate percentage of them have been refunds. Despite being sent here by another developer, I’m certainly considering these guys a tier-2 app store.
You can see the purchases and refunds as soon as they happen, but due to the low sales rate I don’t really pay close attention to the sales and returns from AndroidPIT.
The SlideMe Android market has shown better sales as well as a better return rate than AndroidPIT. I’m not sure if it combines refunds and declined payments into one, but the ‘cancelled’ category shows just under 15%. That’s very close to the combined rate for Android Market returns and declined payments. It’s still not awesome, but it is within expectations.
SlideMe also gives you updates fairly quickly after the transaction occurs. Since I don’t have a huge number of sales on SlideME, I haven’t received my first payment from them yet. As such, I don’t really pay as close attention to the sales and refunds on SlideME.
What to do?
So what can you do? There isn’t a silver bullet to prevent all returns, chargebacks, and declined payments. You can, however, do your best to make your app exceed their expectations.
My upcoming guide will cover some ideas to help ensure that your app is of the best quality it can be. Sign up for my email list now to make sure you know just as soon as it is released!