Law revision gives new rights to online customers

Online customers are allowed a seven-day cooling-off period to return goods for refund after a revision to the consumer rights law was passed by China's top legislature on Friday.

The revision to the Law on the Protection of Consumer Rights and Interests was passed by the Standing Committee of the National People's Congress after three readings since April. It states that people can return goods seven days after they receive them through online, telephone and television shopping.

The revised law, which will take effect on March 15, came at a time when the country is trying to further boost domestic consumption. One of the major purposes of the revision is to give more protection to non-traditional shoppers, Jia Dongming, head of the civil law division under the Commission for Legislative Affairs of the NPC Standing Committee, told a news conference on Friday.

"If people feel safer and are more willing to spend, business will see more revenue and profit and domestic demand will expand. The whole country will benefit," he said.

The consumer rights law before the revision failed to cover new business areas and models that have emerged over the years, such as online shopping, which now accounts for 6.3 percent of total retail sales of consumer goods in the country, a total sales volume of 1.3 trillion yuan ($213.5 billion).

Wu Jingming, a professor of consumer rights law at China University of Political Science and Law, said the new clause on the cooling-off period for online shopping is a "revolutionary breakthrough" in legislation.

"It is a practice common in the United States and European countries. People can simply give the excuse ‘I don't like it' and return it. It protects them from impulsive and irrational purchases," he said.

The buyer is required to pay for the return costs of the refund process.

In order to prevent people from abusing the clause, the revised law has also listed four kinds of merchandise that people cannot return, including customized products, fresh and perishable products, digital products such as software and online downloadable products, and newspapers and magazines.

The revision, the first since the consumer law was enacted in 1994, also stated that business owners should take strict measures to protect the personal information of buyers and they must take remedial action immediately if such cases happen.

Advertisers should not send commercial information to consumers without their approval.

In order to solve the long-lingering problem that people have faced difficulties in claiming their rights, the revision has clauses stating that business owners of durable commodities, such as vehicles, computers and washing machines, are legally liable to provide proof of the integrity of their products if buyers find flaws in the products within the first six months of use.

The revision also provides higher compensation for customer losses because of quality problems. Business owners will not only have to compensate purchasers for economic and psychological losses but also pay "punitive" compensation totaling a maximum of twice the amount of the loss. The revised law also added clauses covering mental damage caused by flawed products.

"It is big progress because business owners will have to not only pay compensation for their flawed products but also for all the damage the products have done," said Wu, the law professor.

Another major amendment to the law is that consumer associations at provincial levels and above have been designated as the only party that can file public interest litigation.

"The party that can file public interest litigation was restricted to provincial levels and above to protect against regional protectionism," said Liu Junhai, a professor of economic laws at Renmin University of China, who was involved in the legislative process.

It could also help prevent the misuse of public interest litigation, he said.

The revision is expected to boost the role of consumer associations at regional levels because it means they could receive government funding.

"Consumer associations in many areas are struggling to exist because of a lack of funding. The new law will ensure that they will play their role in the protection of consumer rights in the future," said Wu, the law professor.