In-app purchases (IAP) can seem like complicated, confusing things, especially if you're a parent new to the iPhone, iPod touch, iPad, and App Store, and trying to figure it all out, not only for yourself but for your kids. If you're already concerned about spending, if you're already stressed by technology, if you're already juggling as many things as you can, as fast as you can, then in-app purchase can sound downright scary. Sadly, part of the reason for that is stories, needlessly sensationalistic stories, portraying IAP as scary. Stories that, instead of empowering parents to take control, paint them as hapless victims whose families are completely out of control. Luckily, Apple provides tools for any parent to effectively manage their children's App Store activities, including in-app purchases, and there are even more on the way soon.
So what's an in-app purchase? Just that — a purchase you make inside an app or game after you've already downloaded it from the App Store. An IAP can be consumable, like game coins, where you buy them, use them, and then they're gone and you have to buy more if you want to use more. They can be non-consumable, like extra levels, where you buy them and keep them effectively forever. They can also be renewable, like monthly subscriptions that repeat until you cancel them.
There's a lot of jargon thrown around. An app or game that is free to download but charges for in-game content is called "free to play" or "freemium" (a portmanteau of free and premium) while a game that costs money to download and also charges for in-game content is called "paymium".
Some developers do it right, by providing a great experience whether or not you opt for in-app purchases, and simply make it even better if you do. Others do a terrible job, doing everything they can to frustrate and manipulate you into handing over as much money as possible. (Think casino in app form.)
So, what can you do to make sure you're both informed and empowered when it comes to your kids and in-app purchases?
In-app purchase options
Apple provides for a variety of hardware, software, services, and resources to help parents learn more about and better manage in-app purchases.
On the App Store home page, at the bottom, are prominent links to "Learn More About In-App Purchases", and "Parents' Guide to iTunes". The first explains what IAP are, the different kinds, and what parental controls are available. The second also explains IAP, but also passwords and Touch ID, allowances and gift cards, parental controls, age ratings, and passcodes. There's also "About Kids Apps and Games" which explains the content and categories.
On the Top Charts of the App Store, right beneath the price badge, Apple puts an "In-App Purchase" label below any app or game that contains IAP. That way you can know what you're getting before you download or buy.
On the App Store, there's a special Kids section that's even more stringently regulated than the general App Store so you can be confident only appropriate material, sorted by age, can be found there.
On an app or game's description page, Apple has an "In-App Purchases" tab that lists all the IAP inside and what they cost.
In Settings, there are Restrictions (parental controls) where you can complete turn off Installing Apps and making In-App purchases.
In Settings, there are also Restrictions where you can choose Don't Allow Apps, or only allow age levels from 4+, 9+, 12+, or 17+.
In Settings, you can choose to have a different iCloud account (for device management) from the iTunes account) for purchases so you can keep your kids on separate accounts.
In Settings, Touch ID can be disabled for iTunes account purchases, so even if your child's fingerprints are registered to unlock your phone, it can't be used to buy things.
In apps, Apple informs you of what in-app purchase you're making and how much it will cost before it asks you to authorize it with your iTunes password.
In iTunes, Apple allows you to load gift cards and even set a recurring allowance from your own iTunes account into your child's iTunes account so there's an absolute limit on what they can spend at any one time.
In iTunes, Apple allows you to request a refund for any unauthorized purchases your child may have made. (Though given all the above, that should be nigh-impossible.)
Taking control of in-app purchase on the iPhone, iPod touch, and iPad
Given the above, there are several ways to make sure you never, not ever have unwanted in-app purchases of any kind on your account.
Put your child on your iTunes account, don't give them your password
Whether your child is using your iPhone, iPod touch, or iPad, the easiest way to keep them from making unauthorized or unintentional in-app purchases is to simply not give them your iTunes password. That way your child has no way to buy anything without your express consent (you entering the password). There is one additional step to perform, however, to make sure they can't quickly buy anything else once you have entered your password.
Launch Settings from your Home screen
Tap on General
Tap on Restrictions
Tap on Enable Restrictions
Enter a 4-digit Passcode
Confirm the Passcode
Scroll down to Allowed Content
Tap on Require Password
Tap on Immediately
Now a password will be required, immediately, for any iTunes purchase, and you'll never have an unwanted charge again. (If you have any App Store restrictions in place, including age restrictions, the password will automatically be set to immediate.)
Note: Your iTunes password is different from your device passcode, password, or Touch ID. You can give your child the passcode to your device if you really want to, and can even register their fingerprint for Touch ID (and turn it off for App Store purchases), and still not give them your iTunes password.
Give your child their own iTunes account, teach them how to manage money
If your child has their own iPhone, iPod touch, or iPad, you can choose to give them their own iTunes account as well. When you set up their iTunes account, don't attach a credit card to it. Buy an iTunes Gift Card instead and use that to create the account. That way there's a hard limit on how much money your child can spend. When the gift card runs out, no more purchases, in-app or otherwise.
You can then choose to give them additional iTunes Gift Cards or you can set them up with an iTunes allowance so a set amount of money is delivered from your account to their regularly. Then, again, when that runs out, that's it until the next time.
That not only prevents accident or abuse, it teaches a valuable life lesson.
When Apple originally introduced in-app purchases they had a rule that "free apps have to stay free". In other words, you couldn't have a free app and then make money off in-app purchases. You had to make a paid app. No "freemium" only "paymium".
It was a new system, however, and Apple, developers, and customers were all learning and trying to figure it out. For example, "free apps have to stay free" didn't allow developers to make, and customers to benefit from, free apps as demos or trials. Even though $0.99 doesn't sound like much, it all adds up, and many people just wouldn't or couldn't pay it over and over again, sight unseen. So, Apple dropped the "free apps have to stay free" and developers who chose to could make games that cost nothing up front but offered compelling in-app purchases in an attempt to get customers to upgrade.
Unfortunately, every system is subject to abuse. Some developers decided to make the "free" part so utterly frustrating and the in-app purchases so enticing that many people would pay them just to get their car back on the track faster or have a higher crushing score than their friends. Likewise, some customers were content to download a free game and even if they loved it, never make any in-app purchase at all, which made it hard for developers to stay in business.
Inevitably, before anyone knew any better, some kids racked up huge bills for in-app purchases, most famously "Smurfberries". Apple refunded a lot of money, the U.S. Federal Trade Commission got involved, and the European Union is still getting involved. They'd like Apple — and Google, and Amazon, and every company with an app store — to make in-app purchases and their costs even more clear.
Not surprisingly, the EU is singling out Apple — nothing gets bigger headlines that Apple — despite Apple changing and improving the in-app purchase system on the App Store over and over again, and on a global basis. (The EU obviously cares only for the EU, just like the FTC cares only for the U.S., but parents have children all around the world.) What the EU wants also seems, at least based on the coverage, to be ill-defined.
Could Apple label freemium apps as "FwIAP" instead of "Free"? Could they show the theoretically limitless cost of casino-style games? Perhaps, but it's hard to see how that wouldn't add to the confusion and fear rather than reducing it.
There's also a chilling lack of respect for personal and parental responsibility in the language being used. Trying to protect children by infantilizing parents is seldom a effective solution. Instead, informing and empowering parents allows them to not only protect but also inform and empower their children is what typically works.
Apple — and Google, Amazon, and others — should absolutely implement the features needed for parents to control when and how any purchase, in-app or not, by their children or anyone else — is made on their devices. Apple, based on everything outlined above, seems to be not only doing that, but consistently doing and improving it.
iOS 7, the current version, added a Kids category to the App Store. Apple regulates the Kids category even more strictly than the general App Store and provides age ratings so you can find only age appropriate material for your kids.
iOS 8, scheduled for release later this year, will further increase parental control by introducing Family Sharing with Ask to Buy, so parents can keep children on their iTunes account, give them the password, and still be notified and be able to individually approve or deny, an purchase. Apple showed it off this past June at WWDC 2014 to millions and millions of people around the world, including the EU.
Developers also have to shoulder their fair share of responsibility. Apple is already damned if they do, damned if they don't — castigated for being too controlling and yet not controlling enough.
Instead of demanding that every potential vector for abuse be eliminated at the platform level — an impossible task — developers who are clearly abusing the system by deliberately targeting children and misleading consumers should face direct attention from the FTC and EU, and from customers who feel cheated. That would put the fear where it really belongs.
In-app purchases can seem like complicated, confusing things. That's a problem that needs to be solved by platform owners like Apple, and also developers, and customers. Without everyone taking responsibility for their parts and working together to make the system better, there's no solution, regulated or not, that'll work.
At the end of the day, however, every system can be better, every developer can be better, but it all comes down to the parent. Parents are the last, best line of defense. If you're a parent, get informed and take control. If you do, there are already more than enough tools to keep both your iTunes account and your children safe.