10 Tips to Prevent In-App Purchase Chargebacks
Chargebacks, or forced payment reversals resulting from a customer dispute, are becoming an epidemic within the software and development sector.
Part of the problem is the overall upward trend in chargeback issuances across the board. On the other hand, key aspects of the electronics industry make it particularly susceptible to disputes. High-purchases, billing errors, and ease of access are all factors. This can create substantial challenges for app developers.
Video game developers, for instance, are especially susceptible to in-app purchase chargebacks. That’s because in-app purchases make up as much as 80% of a gaming platform’s revenue, making chargebacks that stem from these digital purchases far and away the primary threat.
But, let’s start with the basics first. How do in-app purchase (IAP) chargebacks work? Why do they happen, and how can merchants prevent them?
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In-App Purchase Chargebacks: At a Glance
In-app purchase (IAP) chargebacks happen when users dispute a digital purchase they made in-app or in-game.
An in-app purchase chargeback, or IAP chargeback, is the reversal of a payment made through a software application. The customer usually initiates the dispute through the bank that issued the card.
This action is typically taken in response to an issue reported by the cardholder. Receiving a defective product, unauthorized transactions, or other dissatisfaction with the purchase can all trigger chargebacks.
When a customer initiates a chargeback for an in-app purchase, the customer’s issuing bank investigates the claim to determine its validity.
Suppose the issuing bank finds the claim valid. In that case, they will file an in-app purchase chargeback against the merchant’s acquiring bank. They’re essentially reversing the transaction, refunding the customer, and debiting the seller's account. In this case, the merchant will be charged a fee, regardless of whether or not the chargeback is warranted.
Users spent $270 billion on in-app purchases in 2025, Video games alone are expected for $78 billion — or about 30% — of that total.
Why Do In-App Chargebacks Happen?
We’re in an age where online shopping dominates and shapes customer expectations. Against that backdrop, chargebacks are a stark reminder of the importance of product quality, customer service, and overall transparency. App developers must recognize these potential pitfalls and work proactively to mitigate them.
On that note, here are some common reasons customers file for in-app purchase chargebacks:
It’s hard for developers to prove that in-app purchases were delivered as described. This makes IAP chargebacks difficult to challenge in representment.
There are several reasons for this. The first is the common misconception that deleting an app automatically ends a subscription. Free trials exacerbate the problem. When free-to-paid conversions happen without a direct re-authorization prompt (or when a promotional pricing period ends and a full-price subscription kicks in), frustrated customers may head straight to their banks to file a dispute.
How Do Chargebacks Impact the Software and Development Industry?
In-app purchase chargebacks can result in customer churn, reputational harm, operational disruption, compliance challenges, and acquirer scrutiny. It can also harm in-game economies and result in player base erosion.
The more disputes that are filed, the riskier the brand appears. That leads to higher processing fees, stricter operating limitations, and more. There’s a ripple effect as well; in-app purchase chargebacks hurt the software industry as a whole.
Chargebacks can lead to:
Learn more about chargeback costsIn-app purchase chargebacks hurt everyone involved in the process, sometimes even the customers who file them. This is why it’s so important for app developers to keep ahead of the curve by implementing a few best practices to limit overall industry exposure.
In widely-played games like Counter-Strike: Global Offensive (commonly known as CS:GO), rare rifle skins can sell for tens of thousands of dollars.
How Do In-App Chargebacks Work on the Apple App Store & Google Play?
As merchants of record, Apple and Google will re-present in-app chargebacks on behalf of developers. However, those developers remain on the hook if the chargeback is not successfully reversed.
Both the Apple App Store and Google Play serve as a merchant of record (MoR) for app developers that sell on their platforms. This means that Apple or Google is directly responsible for re-presenting chargebacks — developers themselves aren’t involved in the chargeback process.
This isn’t a “get out of jail free” card, though. If the issuer rules in favor of the cardholder who filed the chargeback, Apple and Google will forcibly claw back funds from the developer. And, if a specific app experiences too many chargebacks, it can get banned from the App Store or Google Play, respectively.
In March 2022, Google launched a user-choice billing program, which allowed Android app developers to collect payments through third-party payment processors. Developers who elect to use alternative billing methods become responsible for handling chargebacks on their own, but receive a 4% fee discount. Developers who wish to avoid Apple’s 30% cut can likewise sell directly to customers (D2C) through web stores, but similarly become responsible for managing chargebacks on their own.
Here’s how the App Store and Google Play stack up in terms of chargeback management support:
| Topic | Apple App Store | Google Play |
| Refund Process | Sign into reportaproblem.apple.com and navigate to Request a Refund | Go to play.google.com, navigate to Order History, find the item, and click Report a problem |
| Refund Window | 90 days recommended | 48 hours for most, 120 days for unauthorized transactions |
| Who Handles Chargebacks? | Apple handles on behalf of developer | Google handles on behalf of developer |
| Third-Party/User-Choice Billing Availability | Limited (EU DMA) | User-choice billing program (India, Australia, Japan, EEA) |
| Chargeback Fees | Developer loses proceeds | Transaction fee refunded on chargebacks |
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Family Fraud & In-App Purchases: An Overview
Unauthorized in-app purchases conducted by family members can result in chargebacks once discovered by the primary cardholder, leading to lost revenue for developers.
As mentioned above, unauthorized in-app purchases made by family members are a significant problem for developers.
For example, picture a child purchasing hundreds of dollars of in-game currency using a parent’s credit card. When the parent discovers the charge, they dispute it to get their money back, leaving the developer on the hook for the lost revenue.
In 2023, the BBC reported that a 10-year-old girl used her mother’s credit card to spend £2,500 on Roblox across dozens of small £20 purchases.
Exacerbating this issue is the fact that gaming and application platforms make it frictionless to make recurring purchases, thanks to card-on-file payments and a lack of re-authorization prompts. Another factor is that many cardholders don’t understand the difference between chargebacks and refunds, a misunderstanding that elevates the number of family fraud disputes developers receive.
To guard against family fraud, both Apple and Google offer parental controls that merchants should encourage. These include:
Apple Screen Time
Google Family Link
To encourage uptake, developers can include a parent portal or an “Information For Parents” knowledge hub. App developers can also put into place stricter in-app purchase authorization standards — augmented by protocols like multi-factor authentication — to create intentional checkout friction and prevent family fraud from occurring.
Why Are In-App Purchases So Hard to Fight?
In-app purchases are not tangible, so allegations of non-delivery are more difficult to combat.
Unlike physical products, IAPs also lack shipping manifests, tracking numbers, or signed delivery receipts.
This makes “non-receipt of goods” disputes exceptionally difficult for developers to challenge, and banks will often side with cardholders who make these claims. However, developers can give themselves a fighting chance by going the extra mile to produce compelling evidence. For example, app developers can:
10 Tips to Prevent In-App Purchase Chargebacks
Software and app developers must proactively address chargeback issues. The keys to this are improved communication, enhanced customer satisfaction measures, and effective dispute resolution when necessary.
Developers need to embrace a customer-centric approach focused on transparency and satisfaction. This proactive approach fosters trust, prevents misunderstandings, and ensures customers make informed purchase decisions.
To that end, we recommend these 10 best practices to decrease overall chargeback issuances:
#1 | Enforce Server-Side Purchase Validation
Bypass client-side verifications and instead validate cryptographic receipts with Apple or Google directly. Doing so can help you avoid spoofing and subsequent chargebacks by ensuring that only authentic purchases are credited.
#2 | Implement Server-to-Server (S2S) Notifications
Subscribing to real-time webhook updates from app stores allows your backend to instantly detect when a transaction is refunded, revoked, voided, or disputed. You can then react immediately to these notifications by revoking access to the digital goods disputed by the cardholder, which can help you curb both cyber shoplifting and criminal fraud.
#3 | Use Device Fingerprinting Tools
Tracking hardware identifiers can help you identify emulators or devices associated with malicious behavior. Blocking or flagging transactions from these high-risk sources proactively stops bad actors before they can initiate illicit payments using stolen data.
#4 | Deploy Velocity Checks
Set limits on the frequency and volume of purchases allowed so that you can automatically flag or block repeat micro-transactions. This can help you detect and thwart card testing attempts before they result in unauthorized charges that later turn into disputes.
#5 | Enforce New Account Purchase Delays
Implement a cooldown period so that new accounts cannot make purchases immediately. Because fraudsters rely on speed, this deliberate friction blocks bad actors from churning through burner accounts to make unauthorized purchases.
#6 | Lock Progression With Strict Account Linking
Tying purchased digital assets to a single, non-transferable account can prevent users from moving, trading, or reselling loaded accounts on secondary markets, then subsequently disputing the original charges.
#7 | Monitor User Patterns With Behavioral Analytics
Analyze in-app behavior to distinguish between human users and bots. Banning non-human profiles can help you pre-emptively cut off automated, unauthorized activities before they result in chargebacks.
#8 | Integrate Anti-Tamper Mechanisms
Scammers may try manipulating the local client to simulate purchases and trigger fake receipts. Embed security features at checkout to prevent bad actors from bypassing your payment gateway in this manner.
#9 | Require Biometric Authentication
Defaulting to payment methods like Apple Pay or Google Pay means customers are required to use biometric authentication (Face ID or Touch ID) to approve their purchases. This creates a cryptographic record of intent, which you can leverage as compelling evidence against “unauthorized transaction” claims.
#10 | Implement Device-Level Blacklisting
Track device hashes and IP addresses associated with previous chargebacks and blacklist serial abusers at the device level. Preventing repeat offenders from creating new accounts on the same device can stop fraudsters from continuously exploiting your app’s checkout environment.
Learn more about chargeback preventionChargebacks Require a Better Solution
Combining the best practices outlined above can help your company create a solid framework to minimize in-app purchase chargebacks. You can also enhance customer satisfaction and ensure a smooth and secure experience for customers in the process.
All that said, a piecemeal strategy won’t be effective. True fraud prevention and risk mitigation require a more comprehensive approach. Fortunately, we can help.
Chargebacks911® offers a true end-to-end technology platform that prevents more disputes, wins more reversals, and maximizes your ROI. Contact us today for more information on improving customer service to prevent chargebacks.
FAQs
Will Apple refund in-app purchases made by a child?
Apple generally offers refunds for in-app purchases made by a child without parental consent, provided the issue is reported in a timely manner. Parents can request a refund by going to their Apple ID account page, reviewing the purchase history, reporting the unauthorized purchase, or contacting Apple Support directly. However, it's essential to act quickly, as delays in reporting could affect eligibility for a refund.
Can I get a refund for unauthorized purchases made by my child?
App sellers typically refunds in-app purchases if a child made them without the approval of a parent or guardian. To request a refund through Apple, for instance, parents can either navigate to their Apple ID account page to find the transaction and report the issue or directly reach out to Apple Support. Prompt reporting is crucial, as waiting too long may limit refund options.
What happens if a buyer does a chargeback?
If a buyer initiates a chargeback for an App Store purchase, their bank or credit card provider contacts the payment processor, which in turn informs Apple. If the financial institution approves the chargeback, the funds are returned to the buyer, and the app developer may incur additional fees. Excessive chargebacks can lead to higher transaction costs for the developer and could even risk the app's standing in the App Store.
Can I get my money back from in-app purchases?
Yes, but only if you have a legitimate reason for requesting a refund or filing a chargeback against an in-app purchase you previously made.
Can you dispute an in-app purchase?
Yes. However, you can only dispute an in-app purchase for a valid reason, such as a billing error or service defect.
What if my child accidentally made an in-app purchase?
If your child accidentally made an in-app purchase, you’re typically not eligible for a refund or a chargeback claim. If you do dispute the charge, you may be committing family fraud, a form of friendly fraud.
