Nick@ereniroh
apple has paused my payouts
because of a suspected DPLA violation, citing guideline 5.6.4 (app quality)
which basically means i got enough refunds / bad reviews to trigger an investigation
it’s scary, but i think i know what caused it
there are three (3) contributors…
i’ll share so you guys can learn too, tldr:
1) i offered users 100% refund guarantee
2) high ticket price testing internationally
3) the app was BROKEN for 16 days
#1 - Encouraging Refunds
from day 1 of this app, we explicitly advertise a “no questions asked, 100% refund guarantee” on the paywall. i did this with the best intentions, because that is truly our policy. if our users don’t love our app, i WANT them to get their money back. and i make sure they know they can.
but this comes with a tradeoff. it instills trust at the paywall moment, which brings in more users who will go on to enjoy the app and happily pay. but it’s also a magnet for people who *will* refund, that otherwise wouldn’t have subscribed.
and of course, the biggest “tradeoff” is that it makes our refund rate look much higher than industry average. from a business perspective, i didn’t mind this. because i knew excess refunds were from our guarantee. but from Apple’s perspective, this puts undue stress on the system and just makes your app look shady (even if it’s not!)
#2 - Testing High Prices
i’ve been testing prices upward of $69.99
…what I wasn’t paying much attention to is how that price translates outside the US
$69.99 in the US is ~$100 for a lot of European countries after VAT & fees
this had an outsized impact on our refund rate in $$ terms, because the people in Europe who were charged that price were more likely to refund
#3 - App Breaking Bug
we fell asleep at the wheel on a devastating bug that broke our app for 18 days
our D1 retention is currently 75%
but for two weeks in May, it was ~35%
with refund guarantees + high price tests in the backdrop, a broken app is a disaster
Lessons:
a) i’m your guinea pig on refund guarantees. and my conclusion is: don’t do it. as a business practice i love it, but it *will* inflate your refund rates. i did it to ensure customer satisfaction, but understandably, Apple has to interpret it as customer DIS-satisfaction.
b) be careful with your early price discovery. start low, not high. increase prices slowly, and monitor their FULL funnel - paywall view, paid conversion, AND REFUND RATE. even if a higher price is getting you better proceeds per install, if it comes with a high enough refund rate, you might just want to accept lower profitability to be safe. lastly, know what your prices materialize to internationally. don’t charge outrageous $$ on accident.
c) always check that your app is working. it’s easy to let sales/profitability become a proxy that your app is doing fine - especially when you’re focused on marketing. don’t do that. check your mixpanel every couple days
Am I Worried?
our app has >1k reviews in US @ 4.8 stars and >5k reviews globally @ 4.7 stars
tons of glowing written reviews, tons of happy people using it every day
our refund rate is a result of me trying to *help* our users and brief *mistakes* on price tests + product that we resolved a while ago. refund rate has already come down -50% since the May bug, and i removed the refund guarantee from paywalls this morning which will have a giant impact
i’m optimistic that Apple will find the truth in their investigation - that our refunds are of a different nature / we have good intentions / things already improving
but yes, i am worried
if you can vouch for me, show support on this post, or help in any way, i’d appreciate it so much
