CUPERTINO, California- It is a fully-accepted fact that children cost money. Raising a child is impressively expensive. For 37,000 parents, this past year was unexpectedly costly due to unauthorized in-application purchases through Apple applications and games. The unauthorized perpetrators are not thieves or hackers, but rather the parents’ own children.
The scenario is ripe for accidental or careless buys. Games offer shortcuts or bonuses in exchange for actual money, the amount of which is then charged to the App Store account. Unlike most online purchases, the user is not prompted to verify or authorize the charge, resulting in many parents only finding out when looking through their bill.
What was the total damage of children’s in-application purchases? Over $32.5 million.
Luckily for the parents, especially one whose daughter spent $2,600 in a single application, Apple has agreed to refund in-app purchases in a settlement with the United States Federal Trade Commission (FTC.) Apple already had this practice in place in the United Kingdom, but the FTC agreement takes the issue one step further: Apple must have an in-application authorization procedure in place by March 31.
For Apple, the FTC arrangement was not especially damaging. The new requirement will cut down on consumer complaints but, more importantly, the amount of money being refunded is far from damaging. In 2012, Apple sold over 35 million iPods, 125 million iPhones, and 50 million iPads. Apple’s grand total in net sales rose from $108.2 billion in 2011 to $156.5 billion in 2012. The $32.5 million being spent on refunding customers barely reaches 0.00021 percent of the previous year’s sales.
It must be acknowledged that Apple is not merely a business providing technology and entertainment. Apple and its products also aid children in educational ways through learning aids and general access to information whether via technological programs or the internet. To compare, the Save the Children Fund is another group providing help to the world’s youth.
Save the Children works in 120 countries, extending across the globe from the U.K. and the U.S. to Pakistan and Chile. In 2012, the organization helped 10.8 million children in the Middle East, particularly those affected by the turmoil in Syria. In the same year, the Fund helped over 51 million children in Asia, particularly those affected by Super Typhoon Haiyan. The organization runs a wide variety of programs in addition to disaster and emergency relief: HIV and AIDS prevention and care, access to education and the necessary supplies, agricultural improvements, nutrition and food security, abuse and neglect activism. Individuals can sponsor children so that they are guaranteed school supplies, food and basic necessities. Another program gives livestock to families, including goats, chickens, sheep, bees and even donkeys.
In order to continue all its services, Save the Children receives funds from a combination of private donors and governments, including the U.S. and the United Nations. Approximately $283 million and $174 million came from donations and government grants or contracts respectively. In total, the 2012 operation revenue was $597.2 million though total expenses topped $617 million. On the other hand, Apple’s average revenue per store for the same year was $51.5 million, meaning twelve stores could cover Save the Children’s total expenses. For comparison’s sake, the state of New Jersey hosts 12 Apple stores.
For Save the Children, $32.5 million would pay for a year’s worth of management services, or a year’s worth of program development and public policy support. Such supporting and administrative costs are essential to continuing programs and ensuring their quality and efficacy. As the organization fights to improve the lives of children around the world, a behemoth refunds money for careless purchases.
– Katey Baker-Smith
Sources: CNN, Save The Children, Save The Children, BBC
Photo: Okyanus Koleji