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Navigating in-app subscription refunds, part 1

Victoria Kharlan

January 24, 2025

8 min read

Content

What refunds are and why they matter

What refunds are and why they matter

Refund requests. If you’re an app developer, you’ve probably had to deal with them. They’re frustrating, no doubt — lost revenue, bad reviews, and the headache of trying to make sense of it all. The worst part is that you don’t even control the process. Apple does.

But refunds don’t have to be the enemy. They’re part of the ecosystem, and understanding them can help you spot opportunities to make your app better. So let’s break it down, plain and simple.

This article kicks off a series on in-app subscription refunds. Today, we’ll cover:

  • What refunds actually are.
  • How they affect your app’s revenue and growth.
  • Why handling refunds manually is such a pain.

What are app refunds?

App refunds happen when someone buys something in your app — whether it’s a subscription or a one-time purchase — and then asks for their money back.

Some refunds make sense. Maybe they clicked “buy” by accident, or the app didn’t work as it should. But let’s be honest: not all refund requests are that straightforward.

For example:

  • Use-and-refund. Someone buys a VPN subscription, uses it for one task, and requests a refund.
  • “Accidental” purchases. A user enjoys your app but insists they bought the subscription by mistake.
  • Trial abuse. They sign up for a free trial, use premium features, and request a refund the moment they’re charged.

Refunds hit harder than they seem. They mess with your metrics, like customer lifetime value. And when refund requests turn into bad reviews, your app’s reputation takes a hit too.

see what’s a good in-app subscription refund rate

The history of refunds in the App Store

Apple’s refund policies have changed over time, but one thing hasn’t changed: developers still follow Apple’s rules with little control over payments or refunds.

  • 2008. The App Store launched with one-time purchases. Refunds were informal, handled case by case.
  • 2009. In-app purchases, primarily for games, became available, leading to more refund requests.
  • 2014. Apple introduced a 14-day no-questions-asked refund policy to comply with EU regulations, leaving developers with no say in the process.
  • 2019. Apple began sending server-to-server refund notifications, but only for in-app purchases.
  • April 2024. Apple finally expanded the refund system to include subscriptions. Developers could submit data to contest refunds.

That last change was a big one. Subscriptions make up a huge part of many apps’ revenue, and having a chance to contest refunds is a step forward. But Apple being Apple, 12 hours to gather and submit all the data? That’s tight.

Apple owns the payment system (and the refunds)

Here’s the deal: when users make purchases in your app, the transaction goes through Apple. They collect the money, take their cut (15% or 30%), and handle all refunds. You don’t touch the payments or get to influence much of the process.

Here’s how it works:

Step 1. A user requests a refund

They go to Apple’s Report a Problem page, write a quick explanation, and submit their request.

Apple’s Report a Problem page, where users can request refunds.
Apple’s Report a Problem page

Step 2. You get notified

Apple sends you a CONSUMPTION_REQUEST. This is your chance to prove the user actually consumed the purchase. You have just 12 hours to respond using Apple’s API. Required data includes:

  • How long the user’s had an account.
  • How much they used the app (playtime, features, etc.).
  • Whether the subscription was delivered properly.
  • Your stance on the refund — approve, deny, or no preference.

Pulling all this data together isn’t exactly a quick task. If you miss the deadline or mess up, the refund is approved automatically.

Step 3. Apple makes the final call

Even if you provide all the data on time, Apple’s decision is final. Their system leans heavily toward keeping users happy, so refunds often get approved.

Apple refunds flow presented at WWDC21
Apple refund flow presented at WWDC21

Developers do have the option to implement an in-app customer portal where users can view subscriptions and purchase history. Yet, few bother to do so. It’s complex to set up and still routes users back into Apple’s system, offering no real control.

Why refunds are so frustrating

Refunds go beyond lost revenue. They disrupt your entire workflow.

Take your revenue, for example:

  • If your app makes $10,000 in a month and has a 10% refund rate, you’re losing $1,000.
  • It doesn’t stop there. Refunds lower your LTV, inflate churn rates, and skew your marketing ROI. It makes planning campaigns and product updates much harder.

And don’t forget the ripple effects:

  • Dissatisfied users often leave negative reviews, which hurt your visibility and downloads.
  • Your team ends up spending hours handling refunds instead of focusing on building features or acquiring new users.
A comparison of loss revenue with/without Refund Saver
Recover up to $700 for every $1,000 lost to refunds with Refund Saver!

Why managing refunds manually is tough

Handling refunds without automation is a huge time suck. You’re expected to gather consumption data from different sources, clean it up, and submit it to Apple — all within 12 hours.

For smaller teams, this can feel impossible. Every minute spent on refunds is time taken away from improving your app or acquiring new users.

And even if you do everything perfectly, Apple’s decision-making is out of your hands.

What can you do?

Handling refunds doesn’t have to be this overwhelming. Tools like Refund Saver automate the process, pulling the required data and submitting it to Apple on time.

graph fotorama refund money e1733135151296
Won-back refunds recovered over $2,500 daily for Fotorama → see the full case study

Here’s what Refund Saver helps with:

  • Cut your app’s overall refund rate by 40%.
  • Win 70% of your refund disputes with accurate consumption data.
  • Completely offset the cost of your Adapty subscription with a 400% ROI.
  • Stay away from legal consequences.
Benefits of Refund Saver

The bottom line

If it feels like Apple’s system is stacked against developers, that’s because it is. You don’t own the payments, you don’t control refunds, and you have to jump through hoops to contest anything.

But there’s a silver lining: tools like Refund Saver can help. By automating data collection and submission, Refund Saver ensures you meet Apple’s tight deadlines without wasting valuable time.

It won’t give you control over the refund process (only Apple has that), but it can protect your revenue and free up your team to focus on what matters.

If you are wondering how it works, you can book a friendly call with our team or refer to our documentation here.

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