Apple’s refund policy for iPhone applications sold from its App Store is coming under heavy criticism from developers, with some blogs writing in Chicken Little language of how it could “bankrupt them.” Several blogs have picked up on a seemingly new passage—paragraph 6.3 to be precise—in Apple’s contract with app developers, listed below:

In the event that Apple (NSDQ: AAPL) receives any notice or claim from any end-user that: (i) the end-user wishes to cancel its license to any of the Licensed Applications within (90) days of the date of download of that Licensed Application by that end-user; or (ii) a Licensed Application fails to conform to Your Specifications or Your Product warranty or the requirements of any applicable law, Apple may refund to the end-user the full amount of the price paid by the end-user for that Licensed Application. In the event that Apple refunds any such price to an end-user, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the end-user.”

In other words, if a user wanted to return an app for a refund, they have 90 days in which to do so. More importantly, if the refund goes through, Apple still “retains the right” to take its 30 percent commission. If, for example, a user returned a $0.99 application, the developer would not only have to refund the $1 to the user, but still pay Apple its original $0.297 cut. This has sparked understandable criticism from developers.