New measures for e-commerce goods return: what is going to change?

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We are witnessing almost on weekly basis  how fast China is upgrading its legal system in the area of e-commerce; just few weeks ago the draft e-commerce law was published. Now, we see another important piece of regulation ready to enter into force, covering the so-called “unconditional return of goods” which e-commerce consumers are allowed to do within 7 days from purchase without specific reason.

In our opinion, the importance of this new regulation stays not only for the general fact that it provides more details on how this “unconditional return” shall apply, but also because hopefully it will help addressing unconditional return for cross-border e-commerce.

As of today, in practice it is rather difficult/almost impossible to handle returns for products imported through crossborder e-commerce channel, due to lack of clear regulation in this sense.

Hopefully this new piece of legislation will help addressing this issues.

Summary of the content

On March 15, 2017 Interim Measures for Seven-day Unconditional Return of Products Purchased Online will enter into force, thus implementing the provision of art. 25 of the 2013 Consumer protection law which grants consumers the right to return products within seven days without need to provide any reasons (the “Return”) in case of purchase via Internet, television, phone, mail order.

The new regulation should help clarifying several issues that – so far – have affected the actual implementation of the Return.

Besides the products already excluded from the Return under the Consumer Protection Law (i.e.: tailor-made goods; fresh and perishable goods, audio-visual products, digital products downloaded by the consumers online or whose packages have been unsealed by the consumers; newspapers and periodicals), the new regulation excludes the Return for:

(1) Products which – after being unsealed – are likely to affect the personal safety or life and health of consumers, or whose quality is likely to change;

(2) Products whose value will greatly depreciate after being activated or used on a trial basis; or

(3) Products for which it has been clearly indicated upon being sold that they are near their expiration date or that they have defects.

Consumers on their side have the obligation to return the products in good condition (i.e. with same original quality, functionality; accessories and logo shall be intact), failing which the Return can be legitimately opposed by the seller.

Products are considered in not acceptable condition for instance when they have been used beyond the mere purpose of inspection/verification of their quality, thus causing the value of the product to greatly depreciate. In particular, food products cannot be returned after their sealed packaging is damaged.

The Return procedure is activated by the consumers through a written notice sent to the seller within seven days counting from the signature of the delivery receipt; then, the seller shall cooperate by providing the exact details for the Return of the product.

Products shall be returned together with any accessories and/or gift (such as physical items, bonus points, cash vouchers, discount coupons and other free-of-charge gifts).

Consumer shall get refund of the price paid (rather than total cost borne, which might also include transactions fees, delivery fees, etc..) through the same method (i.e. wire transfer, bonus points, vouchers, etc..) that the consumer had used to pay, unless otherwise agreed.

Upon Return, sellers can still re-sell as brand-new those products that can be fully restored to their original state, while for other products their actual condition shall be clearly and prominently indicated.

The regulation provides several sanctions against sellers that try to dodge their obligations to accept the Return: for instance, the seller cannot extend the scope of products excluded by the Return, or refuse/omit to provide to the consumer with real and accurate, information on the address, contact person and other valid contact details for implementing the Return.

Sanctions for non-compliant sellers can be not negligible – up to 500,000 RMB.

For sellers and e-platforms, it is very important to set clear procedures that make crystal-clear the exact scope of the acceptable Return; while the type of products excluded by the Return cannot be extended, sellers shall (i) adopt suitable measures to clearly specify the products not eligible for the Return as well as (ii) introduce notable verification procedures to allow consumers confirmation of each purchase, failing which the seller will be limited in its right to refuse the Return.

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