Re: Why should they feel obligated to refund anyone?
Probably depends on the terms of the contract. Was the app fee sold as a maintenance fee, a one-off purchase fee, a promise to access free upgrades fee, access to a better twitter experience fee or something else?
Some of the above terms suggest a refund while others do not. Largely it depends on whether they sold a finished product or future delivery of a product/service. It also might depend on the accounting treatment that the app vendors took with their sales.
Compare the difference between selling a book and selling a magazine subscription. When selling a book, the revenue is realised immediately and the vendor moves on. When selling a magazine subscription the subscription fee is actually a liability in that the vendor has to deliver future product.
Importantly, a vendor should *not* spend a liability before delivering the promised product/service otherwise they risk creating an unfunded liability which can send a company broke.
Bizarrely, Icon Factory, seem to have one foot in each camp. By pleading with customer's not to seek a refund it is admitting that they treat the sale as, at least in part, a delivery of a future service/product. But in their next breath they suggest refunds will send them broke which implies that from an accounting perspective they did not treat their sales as a liability.
In short, Icon Factory appear to have created an unfunded liability that has now come back to bite them.
If this surprises them they must not have received any financial advice of any kind over the life of the company. If this doesn't surprise them then they always knew they were running a risky "hand to mouth" business.
Biting the hand that feeds IT
