Refund policies on downloadable software

Cozmoslabs is a Romanian company that sells products, through an intermediary company called Avangate, for building WordPress sites. I purchased a plugin from them, subsequently decided it wasn’t for me and requested a refund. I was eventually granted a refund, but only after some frustration and confusion. Here’s the story.

Purchasing Profile Builder Pro

While researching the process of building a membership site using WordPress, I came across this tutorial, which proposes the use of three plugins — Members (free, by Justin Tadlock), Nav Menu Roles (free, by Kathy Darling) and the commercial Profile Builder Pro, by Cozmoslabs.

Since this is for a commercial project, and wanting to avoid annual renewal fees, I purchased the lifetime version of Profile Builder Pro for $299.

Discovering it's not for me

After installing the plugin, I discovered it to be a feature-rich and powerful product, but suffering in a couple of areas that were important to me:

1. I felt a lot of friction in the design and usability of the plugin. Given that I'll be passing this site off to a customer when finished, I had real concerns about their ability to maintain the site in the face of all the plugin's complexity.
2. The styling of the user-registration forms it generated looked awful, and didn't respect the default styles generated by my theme. For example, the registration submit button looked like a throw-back to HTML1. Remember these?

After some continued research, I ran across another plugin which, while providing less functionality than Profile Builder Pro, did provide all the functionality that I need for this particular project, and best of all, is free.

Requesting a refund

Able to replace three plugins with one, I set off to request a refund from Cozmoslabs, less than 24 hours after purchasing Profile Builder Pro.

The first thing I did was reply to the receipt email, which went to a company called “Avangate”. After two days of not receiving a reply, I called Avangate and discovered that they are a payment processor. They recorded my refund request, and issued a request for Cozmoslabs to follow up with me about the refund request.

The next morning, I received an email from Julianna Jozsa at Cozmoslabs informing me that they only provide refunds in the case that they confirm technical incompatibility in using their product, and that they will not issue a refund if I’ve simply decided not to use the plugin:

Due to the nature of our product (digital download), we cannot provide refunds if you simply decide not to use the plugin. We stand behind our products and will assist you in solving any problem you have, but we also expect you to adequately understand what you are purchasing and why.

Refund rights in Europe?

Thinking back to Apple’s return policy change on apps purchased in the EU, it occurred to me that EU law provides a 14 day “cooling off” period providing consumers with the right to a no-questions-asked return:

In the EU, for contracts concluded as of 13 June 2014, you have the right to withdraw from your online purchase as well as from purchases made elsewhere than in shops within 14 days. This "cooling off" period expires 14 days after the day you received your goods. You can choose to withdraw from your order for any reason within this timeframe - even if you simply changed your mind.

I emailed Julianna back, highlighting my belief that I was entitle to a refund by law.

Confusion with Avangate

When I didn’t receive a reply, I called Avangate to inform them of the absence of communications from Cozmoslabs, and to ask that they provide a refund. Avangate stated that when I made my purchase, I agreed to the Cozmoslabs terms and conditions, and that they, Avangate, are no longer involved.

However, reviewing my invoice, I noticed that the purchase contract is clearly between me and Avangate BV. I decided to walk through the purchase process again, just to double check the terms and conditions I agreed to when buying the software. As it turns out, and as I suspected, the terms and conditions governing the purchase are between myself and Avangate — not Cozmoslabs — and the applicable law is Dutch.

When I called Avangate back, and explained that the purchase contract is between me and them, and that I’m demanding a refunding from them, their response was that Cozmoslabs already has the money, and that Avangate can’t give me a refund if they (Avangate) no longer have the money.

Madness!

As calmly as I could, I explained that if I have a purchase contract with Avangate, their behind-the-scenes contracts with other companies is as relevant to the situation as the company who cuts their hair. I don’t care what Avangate did with the money — I have a purchase contract with Avangate, and I’m asking Avangate to respect the law and provide me with a refund.

They promised to “escalate” the issue, and contact me back by end of the day.

Re-connecting with Cozmoslabs

Later during the day, I received a reasoned and thoughtful email from Adrian Spiac, co-founder of Cozmoslabs. He agreed to the refund, and made a couple of arguments.

First, he acknowledged the shortcomings I’d experienced, and mentioned they are already working to improve those areas of the product.

He went on to mention that, in his view, the right-to-refund does not apply to downloadable software, as per the “digital content” disclaimer on the EU law, which states:

You also enjoy the right of withdrawal within 14 days from concluding the contract for online digital content. However, once you start downloading or streaming the content you may no longer withdraw from the purchase, provided that the trader has complied with his obligations.

My reading of this led me to believe this covers streaming media, as obviously you can’t un-listen to something once you’ve streamed it. But Adrian believes this applies to downloadable software.

He went on to mention that their conditional return policy was intended to provide flexibility in situations like my own, although they do believe some level of responsibility must be taken on by the purchaser, in terms of understanding what they are buying.

My response was that although I did go through most of their marketing screenshots, and did read those sections of their documentation which I felt to be relevant, it’s simply not possible to get a full sense of an infrastructure component’s suitability for a project without giving it a initial try, especially if it’s one of multiple components required to implement a solution.

Adrian acknowledged and agreed with this, and said he would reconsider their policy.

Conclusions

Here’s a summary the conclusions I took away from the situation:

1. Adrian is a well-mannered and reasonable person, and I wish I would have given Cozmoslabs the opportunity to clarify their position before immediately sending an unfriendly reply to Julianna's refund denial in frustration.
2. It still seems unclear whether the EU's right to refund applies to downloadable software.
3. Regardless of the EU legal question, it's very clear that the terms of service one agrees to when buying from Avangate establishes a contract between the purchaser and Avangate. It seems irresponsible, and possibly illegal, for Avangate to communicate to a customer that in disputes, their only recourse is with the software publisher with whom Avangate have a contract.
4. As I mentioned to Adrian, I don't believe the frustrations that a no-refund policy can cause legitimate customers compensate the benefits of preventing abuse, and as a result, I believe an open return policy is better for business and customers.

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