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Parents - If your kid is playing Pokémon Go, check your bank account!

Alex Cohen Alex Cohen  | 

Pokémon Go has taken off. Within a matter of days the app has reached record numbers of downloads and has more daily active users than Facebook, Twitter, WhatsApp and Instagram... and Snapchat.

The game, developed through a partnership between Niantic Labs and Nintendo, is designed to let people explore their neighborhoods while catching Pokémon along the way.

It's a truly addictive game, but with everything comes a catch. Similar to other mobile games, you can purchase virtual coins for real dollars. That means that you can spend cash to buy these virtual gold coins and then exchange them for things like more Pokéballs or other upgrades within the app.

These are called micro transactions - according to Wikipedia micro transactions are "a business model where users can purchase virtual goods via micro-payments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers." At the end of the day, it allows people to try out an app and become sticky. Then developers allow upgrades, modifications, level unlocks and more via in app purchases and people eagerly pay for these add ons.

Now - here's where we start to run into problems. Before starting Birch, I spent a year at Apple working as an At Home Advisor. We constantly got calls from concerned people asking about why they had $15 or $20 charges on their credit card bills from iTunes. It was always a common theme - someone in the household had made an in app purchase via a game. The majority of the time we received these requests, people were calling in and claiming they were unauthorized charges. 99% of the time they were not unauthorized and ultimately they were responsible for giving out their iTunes password and someone making valid purchases with it.

Here's the kicker. The majority of the time it was the person's child. Yep you read that right. They would give their kid an iPad or iPod touch for the holidays or a birthday, load up their Apple ID on the device, give that Apple ID the ability to make purchases and then off their kids went making "free" purchases from the app store and downloading the freemium models games. Our top complaints for in app purchases were Candy Crush, Minecraft and Clash of Clans. All of which gross hundreds of millions of dollars per year.

I feel for the parents in these situations because most of the time they give their child their password and let them download some free games, but they always fail to realize that their kid can literally rack up thousands of dollars from in app purchases. I will never forget the day I had a father call in and he sounded so defeated. His daughter had made over $1300 in Candy Crush purchases in a matter of 2 weeks!

To show you how it works, here's how easy it is to make a purchase in Pokémon Go:
1. Tap the Pokéball
2. Tap on "Shop"
3. Choose the number of Pokécoins you'd like to buy
4. Buy
5. You may have to put in your password depending on your settings.

And that's it. You can spend $100 in matter of seconds. And to a 5 or 7 year old it's all virtual - there is no difference between 14,500 Pokécoins and $100 in real life.

But there's always a silver lining to everything! You may be broke but you will be earning rewards on every in app purchase your child makes. It's not a recommended strategy for racking enough miles to take a free flight, but it never hurts to earn more :)

Here's an article on how you can restrict in-app purchases on an apple device. Sorry kiddos:

http://www.cnet.com/how-to/how-to-disable-or-limit-in-app-purchases-in-ios/

Alex Cohen

Alex Cohen

I run Birch by day and watch cat videos by night

San Francisco, CA