The US Federal Trade Commission (FTC) has ordered Apple to refund 37,000 of its customers a total of $32.5 million (£19.9m).
The agreement comes after complaints over in-app purchases (IAPs) made by children without their parents’ permission.
Apple will also change its billing procedures to make sure customers have given consent before they are charged for IAPs.
At the moment, when the first password is entered, the user can make password-free purchases for 15 minutes. Starting shortly, passwords will have to be typed every time a purchase is made.
The FTC said new restrictions must be in place by 31st March.
"In all, we received 37,000 claims and we will be reimbursing each one as promised," said Apple chief executive Tim Cook.