E-Nightmare: Minors May Not Have To Pay For Downloads

Written by Evan Schuman
April 25th, 2012

In Mark Rasch’s legal column this week, he points out that online purchases by minors are a potential legal nightmare and that a federal judge is now deciding the retail issue. But what if the case goes against retailers? Frighteningly, the way many digital purchases are processed makes it all but impossible to comply with the law.

How could iTunes refund an already listened to song or an already played game? That’s not merely a business/profit question. From an IT perspective, there is often no mechanism to do it. What might start out as a legal problem will almost instantly morph into an IT problem.

The very nature of how E-tail has handled digital purchases—songs, games, apps, stories (such as what you are reading right now), videos, e-books, ringtones, etc.—will make refunds difficult. On a 99-cent download, how can a customer prove that the item wasn’t received or that it was in bad condition? At a low enough pricetag—and sub-one-dollar certainly gets there—few consumers expect it and just about no retailers are prepared to do it.

Once they have the game and play it—or the song and listen to it—then a refund turns this into a free rental. This is triply so when the refund is not for a non-delivery or glitch issue but a “Now that I see it fully, this isn’t what I expected or what I want,” the so-called buyers’ remorse situation.

Let’s take it to the next level. If we assume that a refund is enabled and granted, how is the product returned? If it’s a song in iTunes, for example, it could be deleted from a user’s iTunes account. But what about the copy on the phone? A retailer could wirelessly reach out to the phone and delete it but, as Amazon discovered, that can generate some decidedly nasty customer reactions.

Also, a lot has advanced technologically since that 2009 Amazon effort. It’s likely today that someone intent on “returning” a digital purchase would take the time to make a copy—somehow—on a piece of equipment the retailer couldn’t access. In short, the method of deleting the customer’s copy may not even work today. (To be clear, it would still work with the masses. But its effectiveness against the small subset of customers who would want to return digital goods with the intent of still keeping and using the digital content, that is very much in doubt.)

Everything we’ve just discussed, though, is a logistical issue: the technical issues surrounding compliance with a court decision about minors’ ability to make purchase agreements that can be enforced. So what about the practical business implications?

For many types of digital content (especially music, TV shows, ringtones and games), teenagers and younger children are not peripheral shoppers. They represent a huge percentage of these types of purchases. So any IT thoughts about, “we’ll simply not sell to minors” or “we’ll now make it much more difficult for a minor to buy from us” will be met with sales and senior management thoughts such as, “You and what army?”


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