Wednesday, June 3, 2015

Steam's New Refund Policy

Originally posted June 3, 2015; updated June 7, 2015 and June 8, 2015.
A shorter version of this article was also published on Gather Your Party on June 3, 2015. Read it here.


Original Post (June 3, 2015)


Just in time for the impending Steam summer sale — which is said to be starting next week — the Steam store has adopted a new policy regarding refunds and returns. In short, with a few very reasonable restrictions, you can get a refund on any game within two weeks of purchase as long as you've played the game for less than two hours.

Steam has, in the past, taken a lot of heat for its lack of a return policy. While many brick-and-mortar stores (at least in the United States) have incredibly lenient return policies (some not even requiring a receipt and thereby potentially opening the door to abuse), online stores selling digital content generally have a less-than-stellar track record when it comes to consumer rights. Actually, before now, Steam might have been one of the worst. Steam's customer support has a well-known reputation for being awful, and Steam developer Valve Corporation has had, for some time, an F rating with the Better Business Bureau. Pressure to implement a return policy has been especially strong from customers in the European Union (who have claimed, though perhaps erroneously, that they are legally entitled to refunds of Steam games according to EU laws).

The new refund policy is a huge step in the pro-consumer direction, and likely a much needed one after the paid mods debacle (which was so poorly received that the decision was quickly reversed). Personally, I don't think the idea of allowing mod developers to charge money for their work was such a fundamentally awful idea; free mods would surely continue to exist. Even if free mods had vanished completely as a result of Valve's meddling, it would have been more sensible to blame the modding community itself, rather than the company which merely provided what the mod developers were evidently so happy to use. In any case, Steam's reputation was damaged by that embarrassing fiasco. It's probably not wrong to speculate that the new refund policy is, in part, an attempt to repair some of that damage.

You can read the announcement and other details of the new policy on Steam's web site, but the key points (and their implications) are as follows:
  • Refunds can be requested "for any reason" (including general dissatisfaction).
  • You can get a refund within two weeks of purchase if your total playtime is less than two hours.
  • Failing to meet those requirements? Valve says "you can ask for a refund anyway and we'll take a look." So try it, and you might get lucky.
  • Pre-purchased products can be returned "any time prior to release" and up to fourteen days after release if your playtime is less than two hours.
  • Refunds on in-game purchases are up to the developer.
  • Some DLC might be non-refundable for various reasons (e.g., consumable DLC having already been consumed).
  • Money is refunded using the original payment method, if possible. Otherwise, the money goes to your Steam Wallet by default.
    • This means, in most cases, you can in fact get a "real" refund after paying with "real" money. Fears that customers will always be reimbursed in Steam credit, which must then be spent again on Steam, are largely unfounded and inspired by poor reading skills.
    • It also means, if you do make a purchase using your Steam Wallet, you will be reimbursed in Steam credit. The return policy is not a trick to turn Steam Wallet funds back into regular money. If that were allowed, they would simply allow Steam Wallet withdrawals instead. You can, however, request a Steam Wallet refund, and get your money back out of the Steam Wallet if you placed it there yourself in the past fourteen days.
  • Refunds are not allowed for anything purchased outside of the Steam store.
    • If you're concocting a stupid plan to acquire inexpensive or free Steam keys from third-party sources like Humble Bundle and then return them to the Steam store for a refund of the full retail price in order to get free money, it's not going to work.
  • Refund privileges will be revoked from individual users if the system is abused.
    • If you're thinking you can get away with buying and returning a game repeatedly in order to play it for free indefinitely, you're wrong. Valve isn't that incredibly stupid, and they will shut you down.
  • If you bought a game for full price right before the start of a sale, it's totally okay to return it for a full-price refund and then immediately buy the game at the discounted price.
    • Obviously, this means the refunded amount for any purchase is the amount that was originally paid. If you think you can get free money by doing the opposite of the above — that is, buying a game on sale and then requesting a refund when the price goes back up — you're out of your mind. Steam has a record of what you paid.
This looks pretty great, especially in comparison to the old policy of refusing refunds outside of extraordinary circumstances. Some might wish that refunds were not limited to purchases in the past two weeks or games played less than two hours, but at least this is a step in the right direction. There are some additional restrictions, as well, but they're all rather predictable and understandable, so it's hard to imagine this policy causing a lot of grief to consumers as long as Steam upholds its end of the deal.

However, while the response from Steam users has been mostly positive despite the restrictions, some independent developers of very small games (and those sympathetic to their situation) want the policy to be more restrictive. Allowing two whole hours of playtime before a full refund, they claim, is too much. As one indie dev puts it:

At least one games writer has also voiced her support of this viewpoint by suggesting a petition to change the policy:

While I can understand the concerns of those who develop very short games which might be completed in less than two hours and then returned, I also want to say "welcome to a real economy for the first time ever" and stress that refunds are a normal part of most business. The video game industry (or, at least, the biggest digital store on the PC end of it) is late to this party. Other industries have to deal with returns, and they do so without complaining. People wear clothes and then return them all the time. Of course, most people do buy clothes to keep them, which brings me to my next point: Not every customer is malicious.

Sure, customers can play through the bulk of an incredibly short indie game within the allowable refund time frame and then get a refund, but they can also engage in straight-up piracy with a negligible chance of getting in any real trouble at all. It doesn't mean they'll actually do either of these things. A satisfied customer probably isn't going to return a game that he or she enjoyed, even if doing so is legal. That's the action of a dissatisfied customer who doesn't want the developer to have any money. If indie developers (who seem to have so much faith in community-driven tools like Kickstarter and Steam Greenlight) can't get people to keep their games without asking for a refund, they might have bigger problems than the exact playtime cut-off point in Steam's return policy.

Three things still do concern me about the return policy:
  1. Steam only allows the actual players of a game to review it, and this is great because it prevents bogus reviews. However, the new refund policy makes it easier to abuse the review system. Someone who wants to write a bogus review can now do so without losing money. Just buy the game, play for a few minutes, review it and return it. I'm not sure what Steam can do about this, though. I certainly don't think people should be unable to review and return the same game. Whatever prompts a customer to request a refund might be exactly the kind of information which belongs in a review.
  2. Some games don't use Steamworks and can be launched from the .exe file without using Steam. In these cases, one could copy the game files elsewhere and keep the game even after uninstalling the Steam copy and requesting a refund. Again, however, I'm not sure what Steam can do about this. It's an inherent risk of selling DRM-free software. Humble Bundle and GOG both sell DRM-free games, and both have return policies which could be abused.
  3. Less importantly, as far as I know, there's nothing to keep someone from buying a Steam game, playing for a couple of hours to get its trading cards, selling those cards on the Steam market, and then returning the game for a refund. I'm not sure if Valve would even see this as a problem, considering that they make money from every Steam market transaction, but developers probably wouldn't like it. I'm guessing this is included in the types of abuse for which a person's refund privileges would supposedly be revoked according to the policy. (Update: It seems trading cards no longer drop within the first two hours of gameplay.)
Developers might worry about the first issue, but the potential for this kind of abuse only makes Steam's review system almost as unreliable as one which makes no effort to weed out non-customers, such as the user reviews on Metacritic. I'm not even convinced that Steam reviews were ever taken more seriously than Metacritic user reviews in the first place. Any developer worried about the second issue should already be using Steamworks or some other DRM, and the third issue is probably (update: now definitely) a non-issue. In any case, none of these things create a convincing argument for flushing consumer rights down the toilet.

Update (June 7, 2015):


Want more Twitter drama? Today is your lucky day. Yesterday, independent developer Qwiboo tweeted a graph showing a dramatic drop in sales of the game Beyond Gravity, occurring around the time that Steam introduced its new refund policy.

https://twitter.com/qwiboo/status/607234539262373888

This looks pretty bad. Perhaps the refund policy is hurting independent developers more than I expected. Then again, this particular graph doesn't prove much. If you look up the game's Steam store price history on the third-party price-tracking site SteamPrices.com, you'll see that a special offer ended at approximately the same time:


The full price of the game is only $1.99, but this 50% discount knocked it down to only $0.99 (which is pretty significant). This information was omitted from Qwiboo's tweet, which also fails to show sales data from before the special offer began. So, wait a second, is this indie dev seriously misrepresenting the sales data to argue more convincingly that Steam's new refund policy is bad for developers? I mean, sure, we would expect sales figures to drop a bit when a refund system is put into place, but the graph originally tweeted by Qwiboo does nothing to prove that the decline in sales is the tragic result of a new return policy rather than the predictable result of a special offer coming to an end.

Bored and unable to sleep in the middle of the night, and not really bothered by the possibility of making enemies, I went and pointed this out on Twitter:

What I had stupidly failed to realize was that, hours earlier, Qwiboo had actually posted additional data which is much more informative, as it shows the recent sales decline in comparison to other times when a discount went away:

https://twitter.com/qwiboo/status/607269536623042560

Their sales always rise and fall as discounts come and go, as expected, but this game's sales do seem to go lower than ever at the very end of the graph (which is when the refund policy was introduced). When I saw this newer graph, I posted a correction to my Twitter feed:

Unfortunately, I doubt Qwiboo ever noticed it; almost immediately after my first tweet, this happened:


Oops! Sadly for Qwiboo, the act of blocking my account didn't really do anything except hide my tweets from Qwiboo and prevent me from seeing their page while signed in. It prevented no one else from seeing my criticism, and in fact only made it slightly harder for me to find out about that second graph which led me to post a correction. I'd feel worse about the whole situation if not for Qwiboo's reaction.

Anyway, I guess the takeaway here is that some independent developers might have been right to fear the new refund policy on Steam. At least some of them, Qwiboo included, really are losing sales.

I still do, however, stand by what I wrote before. The new policy is a strongly pro-consumer move. Steam might need to work hard to prevent abuse of the refund system, and they might even need to add more restrictions regarding what can and cannot be returned in order to make this work for everyone, but I won't be convinced that allowing refunds is a fundamentally bad thing just because developers had gotten used to an economically abnormal situation which was truly bad for paying customers.

While it was unfair of me to imply bad things about Qwiboo before doing enough research to see their updated sales graph, I'm still not sure if anyone should feel bad about their current sales predicament. Here's why: I haven't played Beyond Gravity. I don't know what it's like. How long is the game? How fun is the game? Is it well made? Does it suck? Sure, maybe the game is so short that people really are able to abuse the system by playing every bit of the game within the allotted two hours and then requesting a refund. On the other hand, maybe the game is being returned simply because it's bad, and maybe those previously higher sales figures represent a lot of dissatisfied customers who would have returned the game if they could have done so. I can't rule out that possibility. I just don't know.

Furthermore, I'm sure a lot of people are currently using the refund system as a risk-free way of trying a game, but I still don't know that this is a bad thing. There should be a risk-free way of trying a product before putting down the money. More specifically, I believe every game should have a playable demo, and certain people in the industry disagree but their reasons for disagreeing are thoroughly anti-consumer. They are afraid that players will no longer want to buy their games after playing demos; in other words, they want to prevent customers from having the ability to avoid products with which they would ultimately be dissatisfied.

If people are trying and returning full games as a substitute for playable demos which don't exist, the developers or publishers are to blame for not supplying playable demos. If people aren't keeping the games after trying them, it's only because they're able to make more educated decisions about their purchases, and wishing to deny your customers this opportunity is the same as hoping that your customers get tricked into buying things they don't like. That's pretty terrible.

A person who likes a game is still going to keep it. A person who returns a game for a full refund obviously didn't like the game and is dodging a bullet. A developer who complains about refunds, and who has no evidence that the system is truly being abused, perhaps needs to focus on making a better game instead of complaining.

My advice to developers is this: Make good games that won't be leaving customers with a desire to get their money back, and (although I hate to say it) make sure you implement some kind of DRM if you're uncomfortable with the risk of not doing so.

Update (June 8, 2015):


I'm a little disappointed that people keep on retweeting and quoting my first tweet about Qwiboo (in which I hastily made a judgement based on limited information) while my second tweet about Qwiboo (in which I corrected my erroneous implications) is being ignored. But I guess that's just how Twitter works sometimes.

Anyway, I'd like to mention another independent developer now. They've gotten quite a bit of attention after reporting a dramatic loss in sales following the introduction of Steam's new refund policy:

https://twitter.com/puppygames/status/606391655483211776

They had more to say as well:




Puppy Games is the developer of stylish faux-retro/arcade-style games Revenge of the Titans, Droid Assault, Titan Attacks!, Ultratron, and the upcoming Basingstoke. I've played the first four of these games, which I bought back when Puppy Games was featured on Humble Bundle, and I actually like this developer's work. I really enjoyed Titan Attacks! and Ultratron, the latter of which I've played for a few dozen hours in total. Because of this, I'd be a little surprised if Puppy Games' recent drop in sales were truly the result of returns by legitimately unhappy customers. Then again, I realize that this developer's games are not everyone's cup of tea.

In any case, despite how I feel about their products, I'm finding it really hard to feel bad for Puppy Games no matter how low their sales go. Long before the new Steam refund policy was announced — in August of last year, to be exact — Puppy Games posted a truly idiotic and somewhat self-contradictory anti-consumer rant on their blog, followed by an only slightly believable and still obnoxious "just kidding, it was all just a ruse for attention" post two weeks later. Regardless of how serious they were when they called their customers worthless, and regardless of what hidden intentions prompted them to write such intentionally inflammatory garbage, the whole ordeal pretty much cancels out any sympathy I might feel for them now.

To make matters worse, in regards to refunds, they tweeted this yesterday:


Personally, I like their games, as I mentioned already. However, this doesn't mean I agree with the way they've rudely dismissed the very sensible notion that perhaps developers who don't want to see their games returned should try harder to make games which people want to keep. At least they were being more sensible earlier today:


So, regarding implementation: Even if the refund policy recently introduced on Steam could use some fine-tuning, any revenue lost due to legitimate refunds is not something for which anyone should apologize. Happy customers typically don't request refunds at all, and unhappy customers deserve to get their money back, so refunds are justified almost always. The system can be abused, but I doubt this is the case for Puppy Games. It almost certainly isn't a case of players returning the games after finishing them, because (with the possible exception of Titan Attacks!) the games have more content than one is likely to see in only two hours. Maybe people are buying games to try them, and maybe Steam will eventually come out and say that this counts as abuse of the refund policy, but I still think it's fair when no playable demo of a game is made available.

I doubt I'll be updating this post again unless Steam's policy changes, so to close it out, I'll post some more tweets. First, here's some evidence that the refund policy isn't so bad for every independent developer:




Finally, some wise words from the HuniePop Twitter account:

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