Its only for purchases of Sync for Lemmy not for Reddit. You will have to buy Sync for Lemmy Ultra or just the remove ads option for it to work.
this post was submitted on 04 Aug 2023
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Thank you this is probably it. I for some reason thought it was intended to be a way to transition customers who paid for the reddit version. My bad
Be sure that the account that downloaded the app through the play store is the same account that purchased the ad free version. This is usually my problem when I get an error like this.