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April 22, 2021
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Steam Refund Experience: Majority Outside of 2-Week Window

by Kevin Geisler on 06/08/15 06:05:00 pm   Expert Blogs   Featured Blogs

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With Steam announcing a new refund policy, there was an expectation by many that this would cause shorter indie games to get abused by this system.  Octodad: Dadliest Catch can be a fairly short experience for many players, making it possible for people to play and quickly return.


Our general opinion at Young Horses is that the refund system is a positive change, even with the current time requirements, though perhaps there shouldn't be a time limit at all.  The hope is that the vast majority of players will not abuse the system to get free games (and that Valve cracks down on those who do).


Many of the 'Steam Refunds Harming Developers' reports going around are based on gross revenue charts that don’t include refund data.  Other developers, including us, have had no noticeable changes in gross revenue.  In order to get more detailed information, developers have to download a .csv file and tabulate the data manually.


Since June 2nd, 30% of Octodad units sold have been returned. (i.e. for every 10 units sold this week, 3 returns have been made.) This is somewhat alarming, but I would think that pent up refund demand / fascination and Valve's large focus on the new system would naturally encourage an initial boom of refunding.


Since Steam does break down the data by sale price, we are in a position where we can have some certainty on when a returned game was purchased.   For instance, we participated in the winter sale in December at 50% & 75% off, and in a 'Midweek Madness' sale in April at 66% off.  It turns out that 80% of our refunds match the sale price for these periods, putting the purchase dates between 2-5 months ago.  The other 20% of refunds at full price could have been purchased at any point in the last 6 months.  Despite total refunds being 30% of units, it ends up only accounting for a loss of ~13% net revenue when looking solely at this week. These numbers sound high, but consider that we've sold a lot of units in the last 6 months and our current week is at our typical 'tail' rate (much lower) when the game is not on discount.


We did not expect that the vast majority of our refunds would come outside of the advertised 2-week window guarantee.  Upon figuring this out, we were able to find a good number of anecdotes of people on Reddit successfully getting refunds outside the limitations.


It's unknown if this 6 month allowance is part of a transitional period or will always be present, but I'm not especially worried that it'll be abused long term.  I think a large number of refunds are because of the spotlight on the system.  I would expect it to naturally contract or Valve to naturally tighten up over time.


As to why people are refunding the game, that's unknown.  We can speculate that it's mostly people who impulse bought it on sale, either didn't play it or played it a bit and didn’t enjoy it, and discovered now that they can refund the game more easily.  Purchases made in the last 6 months do show up in a list when applying for a refund, so they may as well try.  It's also possible that these are people who bought the game in order to resell as a gift (I believe that unredeemed gifts can still be refunded).  Or it could be people who have long since had a reason to play the game again and mostly want it cleared from their library (with money back).  Of course, this kind of speculation isn’t entirely helpful.  What we hope for in the future is to have more data provided to us on why players may have asked for a refund. Currently, we don't know.


My hope with sharing our initial refund experience is that we avoid jumping to conclusions on how exactly the system is broken.  Our experience in particular doesn't necessarily negate others' experience.  There are many factors at play here and really only Valve has the best picture.

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