Itch.io updates refund policy following fraudulent game sale scam (Updated)

Update: In the wake of this incident, Itch.io has updated its refund policy, which founder Leaf Corcoran said was "extremely out of date." It now states:

"itch.io will process refunds on request if the purchased item cannot be run, some other issue prevents access to it, the purchase was made by accident, or the product does not represent what was advertised. For technical issues, we'll put the buyer in touch with the developer first to try and resolve these issues. Please contact support with your purchase information if you need to make a refund request.

For products selling third-party external keys (eg. Steam keys), we may require the seller to confirm cancellation of the key before a refund can be processed due to itch.io’s inability to disable access. Contact support if you have any questions."

"Our refund policy has always been pretty open," Corcoran said. "Since we act as an in-between for developers and buyers we always try to bring both sides into an email thread about refunds to make sure any issues or misunderstandings are resolved. We even offer tech support on behalf of the developer when appropriate."

The scammer in this case took advantage of an older payment model that enables sellers to accept payments directly into their Paypal account. That system is no longer available to new sellers, meaning that they must wait for payment until the sale is properly verified. Corcoran also emphasized that this isn't a "rampant issue" on Itch.io.

"We actively watch and respond to content uploaded to our site. We've identified and banned scammers before in the past. Today's events stemmed out of a deal site sending out a mass email notification to a lot of people before we had a chance to ban the account," he explained. "This all happened within a few hours. Coupled with the scammer taking advantage of the old payment mode, it turned into a huge mess. An event like this, although unfortunate, helps us move towards the right direction in improving itch.io for everyone."

Original story:

Itch.io is an indie-focused digital distribution platform, similar to Steam and GOG but much friendlier to developers in some significant ways. Devs can set their own profit-sharing percentages, for one thing, and it also doesn't require approval for publishing: As we explained in this digital storefront comparison, developers can upload builds and make them available immediately by way of a command-line tool or through cloud service integration.   

Unfortunately, that approach leaves the door open to a certain amount of abuse, and as reported by Kotaku UK, people have taken advantage of the system by using the service to sell pirated games. One user told the site he'd purchased a copy of Rimworld after being alerted by the isthereanydeal.com website that it was on sale for 75 percent off. But it turned out to be a .RAR archive of the Rimworld folder from Steam. And you will no doubt be shocked to learn that subsequent efforts to contact the seller have gone nowhere. 

Itch.io reportedly moved quickly to remove the fraudulent listings, but as Kotaku pointed out, as long as the system allows this sort of thing to happen, then it's bound to continue happening. The site acknowledged that fact in a statement, but said that it has begun to take steps that will make jerking the system around more difficult. 

"A scammer created a handful of accounts on our system and uploaded pirated games to it. Due to the nature of being an "open marketplace" we don't have a forced review before allowing people to publish. We were made aware of the scammer by the community and through our own internal review, and we removed the content as soon as we discovered it," the site said. "As with all scammers we suspend their accounts immediately, ban their payment information from the system, and ban those files from being sold." 

"This particular scammer is also taking advantage of a 'direct payment' mode that we originally offered that allows a seller to skip itch.io and sell directly into their PayPal account. Although this might be nice for some some sellers, it means they're essentially getting away with the money without allowing us to intervene. We're going to be heavily restricting this feature of the site for the foreseeable future." 

It really is up to Itch.io to fix this problem. A cautious approach to "too good to be true" deals is warranted, but it only goes so far in a business where 70, 80, or 90 percent discounts are not all that terribly unusual. And unfortunately, Itch.io doesn't offer a Steam or GOG-style "no questions asked" refund policy: Its terms of service state that the site "is not responsible for refunds of sales of your game. You are the primary receiver of the payment and thus are responsible to handle the refund."   

There's apparently some degree of flexibility there, as a rep said last year on Github that "we'll process any refunds requested by buyers with confirmation from the developer." But this more recent Reddit thread indicates that it remains largely situational, which is not a good situation for end users.