iTunes Mystery: Where Do the Pennies Go?

bizarre, this exact thought crossed my mind yesterday. although i didn't go so far as to calculate that if i buy 7 $15 cards i'd still be left with six cents. perhaps ask apple about this, lodge a complaint or something :p

you do use the leftovers and pay the rest

actually..the songs arent 99cents each..there is tax after downloads.

I think the better mystery is why you actually get paid for this drivel.

This is called "breakage" by the retail industry...which also includes all of the money left over on unused gift cards when you lose the gift card your Auntie Marge gave you to a store you never frequent. It adds significant money to the coffers of Home Depot, Starbucks, iTunes and thousands of other retailers every year. Why else do you suppose they would spend all that money printing pretty plastic cards?

Actually, a $15 gift card will NOT buy you 15 songs on iTunes because you do have to pay sales tax on each song. Where I live, the cost per song is actually $1.07 including tax, so that $15 card will only buy you 14 songs, and you'll have 2 cents remaining in your account afterwards.

The next song I buy if I don't buy any more gift cards will then be charged to my credit card, and it will cost me $1.05 ($1.07 - .02). It's rather simple really. Apple isn't keeping anyone's pennies...

Were do you people live that you have to pay taxes on the downloads? I just downloaded three albums last week and paid exactly 9.99 for each one with no tax added. I live in VA, maybe that has somthing to do with it.

I hesitate to devote any more brain cells to this, but here's the scoop on iTunes taxes, straight from the Apple site:

"Applicable sales tax is charged for music download purchases where required by local law. The estimated tax noted on your Music Store invoice is estimated and may not reflect actual charges. When this page was last updated, the following states charged tax on music downloads: AL, AZ, CO, DC, HI, ID, IN, KY, LA, ME, NM, SD, TX, UT, WA and WV. "

I'm now curious about whether these states' laws specifically cover music downloads. (I live in California, also home to Apple and not a state without a sales tax...but iTunes downloads aren't taxed here.)

Maybe they send them to sendmepennies.com ?

What are you complaining about?
We in Europe pay exactly ?0,99 per song, which might seem fair, but an euro is worth $1,19, so don't mind the pennies, we overpay by 20%
Even worse is the apple store, we pay more euros than you pay dollars.
Just thought I'd let you know, but I don't blame Apple, it's just our governement.

With napster downloads the pre-paid card does't give you a money credit towards your account, you get song download credits. Kinda sucks because you can't use that to download an album.

Stop complaining, pu-lease! At least you have access to iTMS, which is more than we have in New Zealand. One or other of the big Musicos is digging his heels in here, blocking our store.

Anyone know of a place who sells the Gift Cards by mail order? Lucky local kiwis with state-side contacts have used them to download.

Somebody call Richard Prior and recycle the plot from Superman II.

Huh, funny, in New York State we pay 4% tax, so each song costs $1.03. Yet, we're not on the above list of states that tax downloads. Still, it's less than the combined state and county sales tax that we pay on everything else. (I'm still peeved that we pay tax on bottled water, but not on diapers or condoms!)

What fools are "buying songs" ?????

It's still a FREE for all out here!!!!!

Ian O, get a paypal account. Then it doesn't matter where you live in the world!

Aaaaaaaa... it stays in your account. Which is pretty easy to see next to your name when you log into iTunes. I guess it will ad up if you keep purchasing. Did you even attempt to do some research? I would like to apply as an editor for your mag. I can make crap up & use the excuse that I'm writing on a blog as some sort of tech expert.

Why not this? I buy 14 songs, or however many, but i still want to use up that last 8 cents or so, so i buy another song, its still giving money to apple, right? Because i just charge the rest to my credit card thats set up with the account

4% tax in New York? Wow. 8.4% where I live... but this state (WA) has no income tax.

"I think the better mystery is why you actually get paid for this drivel."

How about the reporter come up with a question, research the answer and then write about that. What are you guys smoking?! Since how is this news?!

"I think the better mystery is why you actually get paid for this drivel."
lol, yes

This is a brilliant well written article. I was just wondering the other day when I went into Target the other day. Why do they sell $25 dollar gift certificates, when clearly it's nearly impossible to spend exactly $25. Where does THAT extra money go? This holds true for most gift certificates. Even round dollar amounts! Obviously, there must be a world wide conspiracy by all retailers around the world! Why didn't I see this sooner? WHY!!!!

A better question would be, 'Is Harry McCracken really the name of the editor in chief?' who's the assistant editor, Pat McGroin?

Redeeming a prepaid card in iTunes transfers the balance from the prepaid account (associated with a sixteen digit "credit" card number) to an Apple account (associated with an email address). Once redeemed, the card is of no further value and may be discarded.

My recent experience with the prepaid cards indicates that purchase costs are deducted first from the available balance on the purchaser's account, then from the user's preferred payment mechanism (Paypal, in my case). The balance is shown any time the user is browsing the Music Store through iTunes.

At one point my available iTMS balance was $0.74 - more specifically, it was $25.00 minus 25 songs @ $0.99 each. My next album purchase resulted in a $0.74 deduction from my iTMS balance and a $9.25 charge to my PayPal account.

Amusingly, repeat buyers of prepaid cards will receive one free song for every hundred songs purchased through prepaid cards. Those pennies do add up.

Apple iTMS accounts may store both song credits and a cash balance. Song credits were given away as part of recent iTunes-Pepsi promotions, and were clearly indicated in both iTunes and iTMS support with an expiration date. "iTunes Music Store Cards" have no expiration date that I can identify indicated either in iTunes or in iTMS support.

what moron buys the cards anyways. i've been given over 1,000 free itunes downloads from pepsi (my brother works at the can return), coffee tabs (i waitress at coffee shop), and others and it didn't cost me a cent.