Creator Refunding Change - Coming Soon

GuardianRob · Joined: 02 Jan 2008 Posts: 2800 Location: USA - TX

Greetings Everyone,

I’d like to tell you about a new process called Creator Credit Refund that we’ll be rolling out.

In brief, anytime a product made by a creator is re-rated to Unsuitable for IMVU, the credits which normally would come from IMVU as a refund will now come from the creator of the product. Also, if a product is re-rated to Access Pass, and the owner of that product is not an AP account, the creator will also be responsible in refunding the credits to the people who purchased the product.

Here is some history on why we are doing this:

For the last year IMVU has been processing all refunds itself. Over the course of this time we've added 100s of Millions of credits to the economy as refunds. The majority of these credits are due to items being re-rated UFI.

These "free" credits are bad for the economy. They add in excess supply that shouldn't be there, and thus work against Creators being able to trade credits at a higher exchange rate. This “free” excess supply punishes all Creators for the bad-behavior of one Creator. It also deprives IMVU of future revenue, which is bad for us. We need to be able to keep our lights on, and this situation is not sustainable for our business.

When our business leaders sat down to discuss and find a solution to this problem, it was clear that the ownership of responsibility should be on the creators who make these products, and not fall onto the shoulders of just IMVU or the everyone else in the community. Furthermore, buyers of the products shouldn’t have to bear the brunt of the experience of having a product taken away and if so they should be compensated, by the person who caused the issue.

The following are the mechanics on how the new refunding system will work:

• When a refund is called for (ex. a GA product re-rated to UFI) a refund will be issued with the Creator who owns the product paying back their profits to their customers. Keep in mind this is the profit, not the entire cost of the product.
• IMVU will cover all derivation charges and IMVU's costs
• If someone has the credit balance in their account, great. They will be charged their portion of the refund.
• If someone doesn't have the credit balance, IMVU will cover their balance, but put their account into debt.
• When an account is in debt, any credits earned will go to paying off debt first. Any credits purchased, or transferred in will go to paying off debt first.
• If a debt isn't paid for after a period of time Customer Service will be notified and the account reviewed.
• Creators will be notified when a refund is issued, how many credits were issued, and how many people were impacted.
• Users will continue to get notification when they are issued a refund.
• Creators will only be charged for a refund that actually takes place. For example: A refund is issued because a product is re-rated AP, then the creator will only pay for the refunds for the products taken from users who don’t have an AP pass, all AP holders will keep that item.
• In the event Customer Service is mistaken in their re-rating, than customer service will refund the credits back to the creator. The creator will need to follow the existing process of disputing a re-rating to get this changed. The email for that help can be sent to ratingdispute@imvu.com.

The refunds system should not impact the majority of our creators. It will primarily impact those who don’t follow the VGP, or submit product that have a high chance of getting re-rated.

This is a business decision that is being moved forward so IMVU can improve the economy and ensure our long-term revenue, while improving the customer experience around refunds.

Also it is important to keep in mind that this is just refunds. Refunds could be issued for more than just a re-rating of a product. The flagging process is separate from refunds, and is being redesigned as we speak to improve the overall process, and make the issuing of a refund a last resort option.

This new process is planning to go live in a couple of weeks, so we are giving everyone a chance to prepare for this, as well as provide any constructive suggestions which we may need to consider for this new process.

At the bottom of this note you’ll find a quick FAQ with some further answers.

Thanks,
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Rob "Guardian" Quick
Creator Community Manager
IMVU Inc.

FAQ

Q. Will everyone in the derivation chain have to pay the refund?

A. At this time, only the Creator will pay their profits and IMVU will cover all costs. We can’t say never, because we honestly don’t know if there will need to be a change in the future. Let’s use a quick example to explain: Let’s say a refund is issued for Product A. Creator 101 sold 10 of them for a total cost of 1,000 credits. Their profit was only 100 credits per Product A. The total amount of credits paid for the 10 Product as is 10,000 credits (1,000*10), but since Creator 101’s profit was only 100 credits, they are only responsible for 1,000 credits in refunds (100*10). IMVU would cover the other 9,000 credits (10,000-1,000).

Q. Doesn’t IMVU covering all of the remaining cost only going to continue putting extra credits into the economy?

A. In a small way yes. IMVU will be covering the derivation costs of other Creators (or their profits), but these are generally pretty small compared to the profit of the final product Creators. IMVU should bare its burden equally as well, and make sure we fully refund our costs (IMVU’s derivation and retail mark up fees) as well. We are just as accountable as the final product maker.

Q. How do I make sure I don’t have a refund issued?

A. Well nothing in life is 100%, but listed below are the top X ways to ensure you don’t have a refund issued:

1) Stick to the VGP! If you are concerned at all that a product might violate the VGP, then don’t make and submit that product. If you have any doubts, then so might others.
2) Ask your peers. The creator community at IMVU is pretty nice, and asks them to review your product idea/designs to determine if it might have a problem with the VGP.
3) Submit your product to Peer Review, but keep it hidden. If it fails, nothing happens. Your product doesn’t get sold, and can’t be charged a refund. If it passes, then you stand a pretty good chance of not having to ever issue a refund.
4) Don’t try and go into any “gray area” of the VGP. The VGP isn’t a set of hard and fast rules; it is a flexible living document. It is designed to adapt to situations, however purposefully pushing a product into a gray area, could work against you, so don’t do it if you are concerned. Ex. Having 1 single pixel of red showing in the minimum coverage guideline might not get you into trouble, but pushing it have only 1 red pixel covered, will probably not work in your favor.

Q. How will the refund process work?

A. • When a refund is called for (ex. a GA product re-rated to UFI) a refund will be issued with the Creator who owns the product paying back their profits to their customers. Keep in mind this is the profit, not the entire cost of the product.

• IMVU will cover all derivation charges and IMVU's costs
• If someone has the credit balance in their account, great. They will be charged their portion of the refund.
• If someone doesn't have the credit balance, IMVU will cover their balance, but put their account into debt.
• When an account is in debt, any credits earned will go to paying off debt first. Any credits purchased, or transferred in will go to paying off debt first.
• If a debt isn't paid for after a period of time Customer Service will be notified and the account reviewed.
• Creators will be notified when a refund is issued, how many credits were issued, and how many people were impacted.
• Users will continue to get notification when they are issued a refund.

Q. Will I always pay out a full refund to everyone who bought my product?

A. It depends. If your product has a refund issued against it, then you will pay the refund for everyone who has your product taken away that shouldn’t have it. If your product is re-rated from GA to AP, then everyone without an AP pass will have a refund issued. If any product is re-rated to UFI, then everyone will have a refund issued.

Q. Will a refund only be issued because of a re-rating?

A. Not necessarily. This is the most common scenario, but there are times when it could issued because a product is broken and the creator won’t fix the product, or other reasons. In these cases a refund could be issued.

Q. Can’t IMVU issue the refunds without touching my credits?

A. We could, but this isn’t fair to the entire Creator community and IMVU. For the entire creator community it is putting the burden for one Creator’s mistake on everyone. This can have repercussions on every Creator, and just isn’t fair to those who aren’t contributing to the problem. For IMVU it isn’t fair because it can hurt our ability to make money. If IMVU can’t make money we can’t keep the lights on. In economics this is called Tragedies of the Commons problem, and we won’t bore you with the details, but essentially, it means: If you put something out there for free with not repercussions people will unfortunately abuse it until the situation is ruined for everyone. We would like to avoid that.

Q. What does refunds have to do with flagging?

A. Not necessarily. A refund could be issued because of a flag; it could be issued for other reasons. It is important to remember that refunds only happen after a flag has been issued.

Q: What happens when a buyer uses Promo Credits and Refund is issued?
A: The buyer will receive a full refund from IMVU in Promo Credits. Creators do not pay anything.

Mercuria · Posted: Tue Aug 05, 2008 1:21 pm Post subject:

I only have one question about this so far, more like an observation.

We have occasionally seen a flagged item upheld and rerated by CS when it actually complies with the VGP.

An appeal subsequently replaces the product to it's original rating.

With refunding, if a compliant product is flagged and moved, and the CC charged 1000's of credits for refunds, will the credits be returned to the CC when the product is rated back to it's original status?

What about grief flaggings on such items? We've seen compliant products flagged for no reason and CS has upheld the flaggings.

Will CS now be more accurate in their review? As this can possibly affect people's income (RL bill paying, groceries, etc) we have to be confident that we can trust CS to review any flagged product and make an accurate decision.

Remember the great underwear flagging before the VGP was changed yet again? How do we know that IMVU is not going to change the VGP yet again, and that we'll lose thousands or RL dollars only to find that IMVU changes their mind back and our products are no longer against the VGP?

Will we be reimbursed or will IMVU shrug and say, "oh well, pay your rent late".

This decision scared the crap out of me.

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Pete · Joined: 02 Feb 2007 Posts: 205 Location: United Kingdom

So Basicly next time you guys change the rules again the creators get to pay the cost of it because Imvu have turned there items ufi

sounds great (not)

Pete
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"live every day like its your last and have fun Wink

"

Mercuria · Posted: Tue Aug 05, 2008 1:21 pm Post subject:

double post removed
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Hexair · Joined: 07 Oct 2007 Posts: 359 Location: United Kingdom

So now you guys get to play with our very REAL money, does this mean that you'll be hiring staff that actually understand the vgp? They really don't have a good reputation at the moment.

I may have missed it, but I saw no mention of predits, what happens in that situation?
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IamSparticles · Joined: 28 Jul 2007 Posts: 2406 Location: USA - OH

May I suggest a 5 (just for the sake of the suggestion) waiting period between when the refund is ordered and when it is set to be taken from the CC's account? That gives the CC time to file an "appeal" or whatever may be needed to potentially correct the situation.

I'd also like to know what happens when an item is re- rated, then put back. That's an awful lot of credits changing hands over and over.

EDIT: -looks at the post above me- Yes, that too. What about predit sales?
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Kimi · Joined: 04 Nov 2007 Posts: 2571 Location: USA - SC

• In the event Customer Service is mistaken in their re-rating, than customer service will refund the credits back to the creator. The creator will need to follow the existing process of disputing a re-rating to get this changed. The email for that help can be sent to ratingdispute@imvu.com.

You will only be issuing refunds if you are in the wrong. If disputed and you are found to be right, anything you may have refunded will be issued back to you. Smile

I believe if I am not mistaken, there is a grace period (tho I believe that isn't the proper wording for it - please excuse me on that point). You have time to dispute the re-rate by following the regular dispute format that Rob posted in the above selection I took from him.

There will always be case by case scenarios. Nothing is perfect. The only people who will be grossly affected by this are the people trying to slip AP products into GA and UFI in at all. They are the ones who will pay dearly. If you follow the VGP, you aren't likely to have any problems at all. Small slip ups and malicious flaggings can be easily disputed.
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Pete · Joined: 02 Feb 2007 Posts: 205 Location: United Kingdom

Im just wondering the same as everyone else is at the moment

Why are Imvu so concerned with saving money all of a sudden is the company going down the pan ?

Thats what i have heard alot of users asking right now and i realy think if this is why we should know

Also with the cataloge problems and the recent issues with staff People have lost alot of faith in imvu at the moment and i think this is a real bad time to be saying this to the content creators here unless imvu realy want to cripple there economy

Pete
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"live every day like its your last and have fun Wink

"

IamSparticles · Joined: 28 Jul 2007 Posts: 2406 Location: USA - OH

Ah, thanks, Kimi. I just skimmed the OP and wanted to get my questions written before I forgot them. Embarassed

Kind of OT, but this post was much better planned than the last grenade you dropped, Rob. LoL.
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Nightfahl · Joined: 08 Mar 2006 Posts: 275 Location: USA

Not a bad change to make, and should have some positive effects.

A couple comments...
First... please, please, please make this a homepage message to all creators! And in that message, direct them to the VGP. Again. While I agree with this policy change, you MUST make sure that any VGP changes now and in the future are well known by every creator. Looking back to this past year, with all the rating/rerating/re-rerating...it would have been a refund and refunding-refunds nightmare. A bit of education and news broadcasting can go a long way to headache prevention.

Notify notify notify

I appreciate the effort to make creators more responsible for the content they put in the catalog. And I'm glad that those refund credits will be returned to the creator should it be decided that their item was rerated incorrectly.

I appreciate the idea of not putting quite as many free credits into the system....although I think the change in free credits is not going to be nearly as big as some believe. For example, I have some items that have a 200 credit mark-up...but 80-ish% are only marked up 1-50 credits. I'm far from alone in my pricing techniques. Although..I don't know...perhaps the CC's that habitually misrate things also price their items with higher mark-ups? *shrugs* I still think it's a good step.
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Kimi · Joined: 04 Nov 2007 Posts: 2571 Location: USA - SC

Sean · Joined: 24 Sep 2006 Posts: 2649 Location: USA

I have a question regarding derived items and refunds.

If a texturer creates a derived version of a GA product, and thereafter the parent product is rerated to AP (or God forbid, UFI) who is charged with the refund? The originator whose mesh was found to be misrated or the deriver who issued a version in good faith?

I see no mention of the liability for the refunds in re texturer vs mesher.

May we have some clarification?
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Kimi · Joined: 04 Nov 2007 Posts: 2571 Location: USA - SC

Pete · Joined: 02 Feb 2007 Posts: 205 Location: United Kingdom

If imvu make nothing from credits why do they charge us to submit products and do they just right those credits off ?

Sorry if i sound dumb just this has never that i know of been exsplained properly on the site

Pete
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"live every day like its your last and have fun Wink

"

IamSparticles · Joined: 28 Jul 2007 Posts: 2406 Location: USA - OH

Submission fees are just another way to "sink" credits out of the economy. IMVU kills credits as soon as they get them back from us.
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