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Product warranties and refunds are essentially non-existent when importing goods from China, and many other countries. In this guide, we explain why this is the case. We go into detail on why some warranties are not actually warranties, and why your supplier may not be able to provide a refund even if they want to.
Further, we also explain other – and more realistic – ways to get compensation from your supplier. More specifically, this often takes place in terms of repairs, remakes, or spare parts.
Can I expect a warranty when importing from China?
In short, there are no warranties when importing products from China, or other countries in Asia for that matter. Once you’ve paid the balance, the supplier has no incentives to offer any form of warranty that allows for free returns and replacements of defective products.
There are exceptions, but at best you can expect a “warranty” including free spare parts while you still have to cover the air freight costs. It’s also important to mention that most manufacturers in China don’t have the margins to offer warranties.
It’s part of the risk that keeps the unit cost low, and it’s ultimately up to the buyer to ensure that they have a proper quality assurance program in place. Assuming that you can fall back on a supplier warranty is destined to fail. In the very rare case that you do get some sort of compensation, you should consider it a bonus.
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Why do some suppliers claim to offer product warranties?
Some suppliers claim to offer product warranties simply because many buyers fall for it. However, what many buyers forget to do is ask the supplier to present their warranty policy.
The problem is that they usually don’t have a warranty policy, even if claiming that they do offer some form of product warranty. In short, the warranty means whatever the supplier wants it to mean – depending on whether you’re about to place an order or are filing your first claim.
But, if you do ask, then the supplier will likely tell you that they only cover replacement parts.
Can I get a refund from my supplier if I’m not satisfied with the products?
Refunds from Chinese suppliers are rare, almost unheard of. There are a few reasons for this. First of all, most factories cannot simply refund tens of thousands of dollars because “you are not satisfied”. Many buyers fail to provide clear product specifications, which results in misunderstandings and quality issues – and it’s absurd to expect the suppliers to transact large sums to “unhappy buyers”.
Further, you cannot expect refunds even if you can clearly demonstrate that the supplier is to blame. This is simply because they have no reason to refund you once you’ve paid the balance.
But, let’s assume that your supplier is at fault and is actually willing to issue a refund. Well, they might not be able to do so. China has capital controls in place. They cannot simply log in online and send money to bank accounts anywhere in the world. Hence, they may not be able to do so even if they want to.
I have dealt with situations in which Chinese factories offer refunds, but it’s so rare that you should not even consider it a possibility.
Can we contact our bank to get a refund?
No, you cannot get wire transfers refunded. Contacting your bank will not change anything and they cannot do anything to get your money back.
How can we get money back from suppliers in China?
The simple answer is that you can’t get your money back from suppliers in China once it’s transferred. It’s therefore critical that you always ensure that your products are quality controlled and – if necessary – lab tested before you pay them.
Once the money is sent, it’s never to be seen again.
How do I get my money from Alibaba.com?
Alibaba.com has a payment service called Alibaba Trade Assurance. In short, Alibaba releases the funds once the supplier has shipped the items. However, it is rare that Alibaba can make any judgment when it comes to products not matching your expectations.
As such, Trade Assurance should not be seen as a “money-back guarantee” or a “warranty”.
Is it possible to return products to suppliers in China?
It happens, but only if the supplier allows the return to happen. We have dealt with product defects that could only be resolved by the factory. However, they’ll ask you to pay the freight cost at least one way.
Who is responsible for warranty claims from consumers?
Consumers are protected by consumer protection laws, that may entitle them to free repairs, replacements, or a warranty within a certain time frame.
In practice, the importer is always responsible for such claims, and cannot shift this responsibility to manufacturers in faraway lands.
It’s unfair, right? You’re left dealing with replacements, returns, and warranty claims while your supplier walks away scot-free.
Well, the way I see it, this is simply part of the risk involved when importing products from China, and Asia overall. Manufacturing products cost less in China, and one reason for this being the case is that the risk is higher.
It’s up to you as an importer to manage the risks, which can only be done by implementing a quality assurance program.
What are some ways to get compensated by a supplier?
Here are a few examples of more realistic ways you can get some sort of compensation from your supplier in case you receive defective or damaged products:
Option 1: Remake Defective Items
It’s a lot easier to make a supplier agree to a remake, rather than a complete refund. However, there are a number of things to consider when drafting the ‘remaking terms’ on the Sales Agreement:
1. When shall a supplier remake the products? Remaking, and reshipping, piece by piece (as defects are reported) is not viable for either party. Instead, I suggest that you specify a certain limit, that when exceeded, requires the supplier to remake the defective quantity right away. When the reported number of defective units is below this limit (e.g. 100 pcs), the supplier is allowed to remake the items when the next batch is ordered.
2. The supplier must comply with a certain time frame, counting from the date a compensation claim is filed to the date of shipping the items.
3. Don’t expect the supplier to cover the additional shipping costs, duties, and taxes. For duties and taxes, you can claim request a deduction from the local tax and customs authorities (there are regulations in most countries concerning international replacements), while the shipping may be compensated by your insurance company.
Option 2: Product Repairs
Warranty terms of many manufacturers are not much more than a written statement that they will ‘repair all defective items. Now, that is a slight problem. They are in China, and you are likely very far from China. Thus, the first step is to get the items returned. As such, the following questions must be answered:
Who is covering the return freight? (Most likely the importer)
What if the items are not allowed to pass through customs in China? (The Chinese customs, ‘Hai Guan’ often acts in mysterious ways)
How much time will the supplier have to repair the products?
What if the products can’t be repaired?
Some defects are just beyond the point of return. The same thing can also be said about items that are non-compliant with product standards and directives. You simply can’t repair a piece of clothing to magically become compliant with substance regulations, such as REACH (EU) or CA Prop 65 (US). That said, ‘the repair’ is often the compensation term of choice for many suppliers, as it leaves them in complete control over the process.
Option 3: Send Replacement Parts
When buying machinery and vehicles, for example, from suppliers in the United States, Europe, and Australia, you can be somewhat safe to assume that they have secured the replacement part supply chain. Machines, LED screens and many other products do need replacements on a regular basis.
Many suppliers, especially in the LED display industry, provide extra parts together with each order – thereby enabling the buyer to replace malfunctioning parts, e.g. fans and power supplies, while the supplier ships additional replacements. When you draft the replacement part terms, you need to take all of the following into consideration:
Will the parts be provided free of charge by the supplier? If yes, for how long is this valid?
Will the buyer, or the supplier, pay for the delivery cost? (The buyer, in most cases)
How many days does the supplier have to ship the replacement parts?
Reporting Defective Items
It’s crucial to quickly report defective products as fast as possible. That said, you must provide a complete overview that details the types of defects and the number of defective items. Without this, neither you nor the supplier can quantify the extent of the quality issues and the potential value of the defective items.
Many inexperienced buyers tend to overreact by sending angry and emotional emails or Whatsapp messages. Meanwhile, the supplier is left wondering if it concerns a handful of defective units or the entire batch.
Photos and video
Quantity of defective items
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Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
Hey there, I’m Fredrik!
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