Are Chinese Consumers Overprotected?

Are Chinese Consumers Overprotected?Overall, consumer protection in China is not excessive, but rather still insufficient."Returnless refund" has recently become a hot topic on social media

Are Chinese Consumers Overprotected?

Overall, consumer protection in China is not excessive, but rather still insufficient.

"Returnless refund" has recently become a hot topic on social media. Rumors are spreading: "Wool-picking parties" are rampant, causing great hardship for merchants; merchants are collectively seeking redress against consumers who use "returnless refund," and some sellers are said to have driven thousands of kilometers to find those who have exploited the system. While these may be isolated cases, the amplification of this issue creates a perception that all consumers are potential "wool-pickers," putting normal consumer rights protection at risk of demonization. Meanwhile, merchants are positioned on a moral high ground of forbearance, as if there are no unscrupulous merchants in the world. Consumers and merchants are being artificially pitted against each other.

Are Chinese consumers truly "overprotected"?

"Returnless Refund": A Chinese Specialty or a Global Trend?

In public opinion, "returnless refund" seems to be a Chinese characteristic. Domestic merchants are said to bear a unique burden of after-sales service pressure globally, making it unfair. However, in reality, "returnless refund" wasn't even originated by Chinese e-commerce platforms. In October 2017, Amazon, the world's largest e-commerce platform, officially launched "ReturnlessRefund." However, Amazon's presence in the Chinese market at that time was already weak, so it did not generate much buzz. Almost four years later, in 2021, domestic e-commerce platforms began to introduce "returnless refund" policies. By 2023, it has become a standard feature on mainstream e-commerce platforms.

Many people who claim that Chinese consumers are overprotected are either completely unaware, or pretend to be unaware, of the extent to which after-sales service policies in the retail industry in developed countries have evolved. A prominent feature of after-sales service in American retail is the generous and extended return and exchange policy. For example, while domestic e-commerce platforms generally offer a 7-day no-reason return policy, the return period for American e-commerce platforms is significantly longer. Amazon, for instance, provides a 30-day return period for most products, and a 14-day return period for electronics like cameras. Compared to e-commerce, return policies in the U.S. offline retail industry are even more competitive: Walmart offers a 90-day return policy, while Costco offers unlimited return for standard goods and 90-day returns for electronics like televisions, computers, and cameras.

It can be argued that it was the rise of e-commerce platforms that led to a significant improvement in after-sales service policies in the Chinese retail industry. However, compared to the advanced level in Europe and the United States, it is only a pale imitation. It is the "emergence" of "returnless refund" that has allowed Chinese consumers to truly enjoy the highest level of after-sales service globally.

Many of us have short memories like goldfish, quickly forgetting what it was like to be cheated by large companies and how difficult it was to seek redress. These were the norms in the domestic retail industry before the rise of e-commerce. The concept of "customer is king" was often only practiced during the annual "3.15" consumer rights protection day. It hasn't been long since domestic consumers have enjoyed better treatment. Before they can even settle in, some people are already worried about "consumers being overprotected," a situation that is almost comical. Do Chinese consumers really not deserve to enjoy top-tier after-sales service globally?

More importantly, the so-called favoritism towards consumers only occurs on a few domestic e-commerce platforms, visible above the surface. What about consumer rights below the surface? They are likely still struggling in silence, with no avenue for appeal.

The Silent Majority, Their Voices Suppressed

The current media climate easily creates the impression that there are no unscrupulous merchants, only unscrupulous consumers. Cases of consumer rights violations occur constantly, but perhaps because they are so commonplace and normalized, they lack traction on social media. On the other hand, the collective action of merchants seeking redress against consumers using "returnless refund" is rare and newsworthy, making it a trending topic on social media.

Curiosity is human nature, and there's nothing wrong with that. Individual merchants facing challenges with "wool-pickers" is a reality. However, the problem lies in the tendency to always focus on the supposed losses of merchants and the practice of "wool-picking," obscuring the basic fact that consumers are generally in a weaker position.

Last May, Huang Minxia (a pseudonym), a woman in her early twenties from Jiangsu province, purchased a pomegranate tree online. After carefully nurturing it, the sapling failed to bloom. Upon researching, she discovered that the seller had sold her a flowering pomegranate instead of a fruit-bearing one. Huang Minxia sent at least twenty messages to the seller, but they all remained unread. Out of desperation, she contacted the seller through the 12345 hotline, the seller's local complaints platform, and the local forestry bureau, finally reaching the seller. The seller's arrogant attitude shocked Huang Minxia. "First, he admitted that I had placed an order at his shop, but couldn't prove that the fake tree I had bought was from his store. Second, he suspected that I had used the wrong method to plant it, which is why the sapling wasn't blooming." Huang Minxia said that apart from these, the seller refused to negotiate a "three times the price compensation" solution. Finally, the seller hung up and blocked Huang Minxia after saying, "There's no way I'm paying compensation. If you want to, go sue me." Huang Minxia could only accept her losses.

Huang Minxia is not alone. If you ask her whether consumers are now overly favored, resulting in "businesses dying out," she would undoubtedly find it unbelievable. The isolated cases circulating online are merely that - isolated cases. They don't reflect the everyday experience of ordinary consumers like Huang Minxia.

Huang Minxia and others like her represent the silent majority. Their voices, however, are being silenced and replaced by those of the merchants in a merchant-driven media landscape.

Overall, consumer protection in China is not excessive, but rather still insufficient. That is why, in April this year, the State Administration for Market Regulation announced that it would work with all sectors of society to fully launch a "safe consumption" campaign, establishing a policy orientation that prioritizes consumers. The very fact that we are unable to achieve completely "safe consumption" and comprehensive "consumer priority" is the driving force behind this campaign.

The notion of overly protecting consumers is a false proposition. We should not demonize consumers, as it will make it even harder for them to exercise their legitimate rights in the future. Even those consumers who never use "returnless refund" will become victims of this demonizing trend in public opinion. Without "returnless refund" as a shield, "unconditional refund and return" would also be in jeopardy.

The Business Logic Behind "Returnless Refund"

This is not to say that "the weak have the right" - we should always be reasonable and logical. However, when merchants are clearly in a dominant position and consumers are in a weaker position, it is pointless to artificially create a media narrative where merchants are being bullied and helpless.

Why did Amazon become the first to introduce "returnless refund"? While it was indeed to attract customers and a market competition strategy, Amazon also explicitly stated that it was done "in response to strong demands from sellers." This may sound illogical, but it is actually aligned with business logic. For some products with a low unit price, the logistics and labor costs incurred due to returns and exchanges can actually exceed the value of the returned goods themselves. In some cases, the returned goods may not have any resale value, making it unnecessary for merchants to incur additional costs.

Some people argue that China and the United States have different national conditions, and the cost of returns and exchanges in China is much lower than in the United States. This is true, but "national conditions" cannot be mentioned only for one side. Isn't it also true that the prices of some small commodities in China are significantly lower than those in Europe and the United States?

Perhaps someone will argue, "Why does China have to learn from the U.S. in terms of after-sales policies?" I can't help but say to them, "Why should Chinese consumers not be able to enjoy the same rights that American consumers enjoy?" However, they might not be interested in grand pronouncements, so let's talk about "small points."

In recent years, Chinese e-commerce has been storming the global market. But whether due to regulatory compliance or market competition, businesses have to meet the local after-sales policies of the countries they enter. If a Chinese e-commerce company adopts the higher standards of after-sales service seen in overseas markets, and the merchants participating in it agree and implement these standards, shouldn't the domestic business of this e-commerce company also be upgraded to the same standards, both for reasons of fairness and standardized supply chain management? What would it look like if there were two sets of standards, one for overseas and one for domestic? The "double standard" controversy involving Haitian soy sauce in 2022 should still be fresh in people's minds. For

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