App developer or Shopify to provide refund on annual subscription cancelled

[OKOSTA]

Hey,

I'm reading here in the community about transferring from monthly to annual subscription and refunds policy and specific case - the community threads prove to be very helpful, thanks for such a great tool!

However, being an app developer and preparing our app for the launch, I'm a bit confused on the following:
- is it an app developer of Shopify team that reviews refund requests and approves or rejects the refund? 
- if the merchant has used 5 months of the annual subscription and then asks for refund, (and I know per Terms of Service there is no refund) but can the app developer (or Shopify?) review the request and provide the refund? is it the sum paid on annual subscription (for example annual discounted subscription vs monthly) or the refund is calculated as annual(discounted) sum minus monthly multiplied by 5 months?
- is there anything like Shopify app developers ethiquette about refunds - approve or reject? We want to adhere to the common practices 😉

Thanks a bunch in advance for helping us do the right steps towards our launch!
@hardik355  you already saved me a couple of times, I hope you're ok that I mentioned you here)
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[Olivia]

Hi, @OKOSTA!

Thank you for sharing your question with our network.

I'd be glad to support you through this. Before we dive in, it's important that we make the distinction between annual billing for apps vs. annual billing for Shopify subscriptions. 

If your app is listed on the Shopify App Store, it is using Shopify's Billing API. This is what makes it possible for your app's charges to appear directly on the merchant's Shopify invoice. On the surface, all charges are processed by Shopify and then funds are directly paid to you as the Partner. 

More intricately, while charges are processed by us on the Partner's behalf, refunds and billing for the subscription are between the App's Developer and the merchant. Billing for both monthly and annual subscriptions are prepaid at the start of a billing period and then pro-rated over the set amount of time. 

Shopify's Terms of Service strictly state we do not offer refunds, however, we do look at refund requests on a case by case basis. Any app listed on the App Store will have their own terms and guidelines (set out by the Partner) that merchants must agree to when purchasing the app.

Let's say for example a merchant were to contact Shopify with a refund request for an app, we then re-direct that request to the App's Developer. As far as common practice for App Developers, I suspect it may be different depending on the services provided and their own business model. While some may offer partial refunds, others may offer credits or no refund.

Therefore, I invite other App Developers to join our conversation and share their experiences and feedback with you. I trust that will give you the insight you are looking for, but let me know if there's anything else I can answer.

Warm regards,

[OKOSTA]

Hey Olivia,

thanks a lot of the context! Could you please let me know if there are formulas used for prorated subscription charges when plans change or refund is given https://shopify.dev/apps/billing/subscriptions/annual#plan-changes  ?

Thanks again)

[Olivia]

Thank you so much for getting back to me, @OKOSTA!

I am happy to hear you found that information helpful. I'm not sure if I entirely understand your follow-up question to be honest. Can you please provide me with an example of what you mean?

That way I can make sure to get you the information you are after.

Warm regards,