The LeanPub Black Box: Problems with the payment and returns platform

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There is a saying: "Have someone handle your money, and that's when you'll truly know them."

In my experience as a content creator, I have already discussed issues with Udemy (policies and support) and Gumroad (catastrophic failures in their file upload system). Now, unfortunately, it is LeanPub's turn, which joins the list of problematic platforms.

This video is purely my opinion on an internal LeanPub situation that directly affects me as an author.

What is LeanPub?

LeanPub is a platform whose main purpose is to help authors write and publish their books using a markup system (similar to Markdown).

My Approach: I do not use their internal editor. As an advocate for always having my content under my control (after the experiences with Udemy), I prefer to write my books on platforms like Google Docs. This guarantees that, if the website explodes or I decide to migrate, I can download the content and continue working.

The Problem: A Veiled Accusation from LeanPub

Two days ago (September 7, 2024), I received an email from LeanPub that started the problem. The email reported that they had detected a delay and an issue with royalties (the payments they make to authors) related to certain purchases.

1. The Inappropriate Expression

The email begins with wording that I find quite out of place, implying that the fault lies with the author:

"We are writing to you because we discovered an issue on our platform with the royalties in question... You can decide to keep all the money and act as if nothing happened."

The use of the phrase "act as if nothing happened" sounded to me like a complaint or an indirect accusation. The responsibility for the payment process is 100% the platform's; I, as a creator, only have access to my content, not the payment backend.

2. The Payment Platform Conflict (December 2021)

The email details that the problem has existed since December 2021.

• The Nature of the Failure: According to LeanPub, the problem is due to two scenarios that suspiciously coincide on the same date (December 2021):
• Innocent Errors: Customers who entered invalid credit/debit cards, and yet the purchase was still authorized.

Fraudulent Exploits: Issues with fraudulent payments that occurred from that date onward.

My Critique: I find it incomprehensible how a system that communicates with payment gateways (like PayPal or Stripe) can authorize a purchase from an invalid card. A payment system should be simple: the order is sent, and the bank/gateway returns a status. If the status is not COMPLETED (or succeeded), the purchase is not recorded. The failure is entirely the platform's.

3. The Abuse of Refund Policies

The most murky part is that LeanPub takes advantage of their payment gateway problem to add a complaint about their refund policy.

• Excessive Policy: LeanPub allows 90 days (3 months) to return a book. I consider this amount of time absurd for a 300-400 page programming book; with a quick look, an experienced reader knows whether it is useful or not.
• Premium Policy: Such a premium refund period would only make sense if the resource were very expensive (like $1,000 courses, in the style of Romuald Fons), or if the platform guaranteed it. Selling a book for $20 or $30 with a 90-day refund policy makes no sense.
• Pleading for "Help": LeanPub is using the payment issues (their responsibility) and the abuse of their refund policies (a policy that many authors do not support because it is too long) to essentially ask authors for help.

4. The Lack of Detection: Three Years Without Reconciliation?

Finally, I don't understand how it took them 3 years to notice this problem.

• Lack of Reconciliation: Any company, no matter how small, must perform an account reconciliation (registered sales vs. deposited money) on a monthly or quarterly basis. It is unacceptable that a platform of this type, which handles money, did not notice this discrepancy in its numbers for so long.
• Total Responsibility: The fact that these were "failed" payments (there was payment intent) means the person got the book for free due to a failure in the LeanPub system. The responsibility is theirs, not the author's.

⚖️ Conclusion: What Would You Do?

I know I went on for a while, but I like to analyze these points step by step.

They give me until October 7 to decide what to do (apparently, they have enabled a system for me to decide whether to "return" the money to them or not, although the affected amount is less than 1% of my sales).

My position is that the responsibility is 100% LeanPub's. I don't see why a content creator should pay the price for an error in the payment gateway and an excessively long refund policy.