Reading the Developer's description of the app, it clearly states that it is "for entertainment purposes only" and "does not return a true iPhone location".
It is for fun, because your friend will be standing next to you when you demonstrate this to them. You enter their number, but the app only displays your iPad's location, which is the same as your friend's location, because they're standing right next to you.
You can easily get a refund, though, for the app. Just call the Apple Support line (it's free) with the transaction reference number and they will refund your entire purchase price as a credit to your iTunes account.
I agree, though, the Developer's description could have been much clearer.
Tim