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Order cancellation and return

- In general, a consumer who has concluded an e-commerce contract may cancel the order related to the relevant contract within seven days since the date of order regardless of the content of the contract (Article 17(1) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

※ A purchasing contract with a clause that is unilaterally disadvantageous to consumers (e.g., prohibiting the cancellation of orders or return of goods) shall be deemed invalid (Article 35 of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

- However, the consumer is not entitled to cancel the order, contrary to the will of the mail order distributor, in the following cases (Article 17(2) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」 and Article 21 of the 「Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce Transactions, etc.」):

1. Where the purchased goods have been destroyed or damaged due to a cause attributable to the consumer, provided that this shall not apply where the package has been damaged to confirm the contents of the goods

2. Where the value of the purchased goods has substantially decreased due to a cause attributable to the consumer

3. Where the value of the goods has substantially decreased as to cause difficulty in their resale due to elapsed time

4. Where the package of the reproducible goods has been destroyed

5. Where the provision of services or digital content prescribed in Article 2.5 of the Framework Act on the Promotion of Cultural Industries has started. However, in the case of a contract consisting of divisible services or divisible digital contents, the portion not provided for is excluded

6. Where it is expected that allowing the cancellation of orders for goods which are separately produced upon a consumer’s order or other goods, etc. similar thereto and cancellation of the contract would cause a serious, unrecoverable loss to the online shopping business operator, and where the fact that it is impossible to cancel an order or return goods that has been separately notified in advance with respect to the relevant transaction and the consumer's written consent (including electronic documents) has been obtained.

- In the case of the goods that are impossible to cancel the order thereof under the foregoing clauses 2 through 5, an online shopping business shall employ the methods. These include clearly disclosing the information on the package of the goods or where it can be easily visible to the consumer, or supplying test goods among other methods, and take the necessary measures not to encumber the exercise of the right to cancel the order (Article 17(6) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」). When the mail order distributor fails to take the measures under the foregoing clauses, the consumer may cancel the order (Article 17(2) proviso of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

- However, if the consumer cannot cancel the order for digital content in paragraph 5 above, the online shopping business operator shall not interfere with the exercise of rights of canceling an order, etc. by supplying test goods in any of the following ways as well as marking the fact that it is impossible to cancel the order for the digital content, etc. (Proviso of Article 17(6) of the Act on the Consumer Protection in Electronic Commerce, etc. and Article 21-2 of the Enforcement Decree of the Act on the Consumer Protection in Electronic Commerce, etc.).

√ Permission for partial use: Provision of part of digital content by such means as preview or pre-listening, etc.

√ Permission for use for a limited time: Provision of digital content by setting a specific time period for use

√ Provision of digital contents for experience: Provision of digital content where only limited functions can be used

√ Where it is impractical to provide test goods, etc., by methods referred to in the above: Provision of information on digital content

Request for order cancellations of goods suspected to be counterfeit

Q. I purchased a nice-looking bag for \300,000 from an online shopping website. Two days later, the bag was delivered to me and I found it to be not my taste. I suspected it to be fake and asked the business for a refund. The business was offended by my remarks that it was counterfeit and refused to give me a refund. What should I do?

A. Under the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」, Article 17(1), a consumer may ask for a withdrawal of an order for goods purchased through an e-commerce within seven days of purchase unless the goods have been destroyed or damaged significantly due to a cause attributable to the consumer. In this particular case, it is important that you keep track of all documents for evidence, including photos. Ascertainment of its authenticity can be done at the business or a police station. As your case involves your discovery of it not matching what was advertised, you need to discuss whether you can cancel the order with the business, accepting the expense for a two-way delivery of the good.

Period for order cancellation and return

- A consumer can cancel an order and return goods purchased from an online shopping business within seven days of purchase (Article 17(1) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

- If the contents of the goods differ from those which were advertised or function differently from the contents of the contract, the consumer may cancel the order within three months from the day the goods were supplied, or within 30 days from when this knowledge was made known by the consumer (Article 17(3) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

Where goods were purchased due to an exaggerated indication or advertisement

Q. I purchased a coat that was described to be 100% wool from an online shopping business, but upon its arrival, I discovered that it was made out of synthetic wool. The business says that it cannot accept my return, pointing out that 20 days have passed after its purchase. What should I do?

A. With objective evidential materials about the business’s inauthentic indication, you are eligible to receive a refund. The 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」, Article 17(3) stipulates: “If the contents of the goods differ from those which were advertised or function differently from the contents of the contract, the consumer may cancel the order within three months from the day the goods were supplied, or within 30 days from when this knowledge was made known by the consumer.” It is recommended that you send your intention to cancel an order by contents-certified mail to the business, and ask the KFTC (www.ftc.go.kr/eng/) to take the regulatory steps against the business’s inauthentic indication of the goods.

※ Examples of information designed to block order cancellations

The KFTC stated that some information (examples) that is disadvantageous to the purchaser provided by an online shopping business in public notices or bulletin boards about the terms for exchange and refund falls under the category of illegal and unfair acts of the seller, which may be subject to corrective measures and potential fines.

· Any indication that a return or refund is made due to a change of mind is not accepted and that an order withdrawal requires mutual agreement.

→ We do not accept returns, exchanges or refunds of goods for a change of mind, goods purchased with bonus points, or goods sold during a sale period.

· Indication that a refund is not accepted and purchasers can only ask for redeeming it with bonus points

→ “All goods are exchangeable and refundable. However, where inevitable, your requests for an exchange or refund will be redeemed as bonus points.”

· Indication that order cancellations are accepted within a period less than seven days or making it required for returned goods to reach the business within seven days, where the law stipulates that a consumer can cancel an order within seven days.

→ “If you wish to return the purchased goods, you must express your intention within three days of the receipt and the goods should reach the business within seven days.”

· Indication that specified goods (e.g., knit or white-colored clothes) and those which were sold at discounted prices during a sale period are not exchangeable or refundable.

→ “Please note that white or ivory-colored clothes/knitwear/underwear/leggings are likely to be affected or damaged. Such damaged goods are not exchangeable or refundable.”

· Indication that goods whose package is opened to inspect the contents is not eligible for exchange or refund.

→ “Please note that goods whose package is opened or the value of the goods has been degraded due to handling cannot be exchanged or refunded.”

< Source: A Collection of e-Commerce-related Dispute Mediation Cases, 2021, p.56~57 >

Paying the expenses for returning the purchased goods

- The expense incurred in returning the supplied goods shall be borne by the consumer (Article 18(9) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

- However, where the contents of the goods are different from those indicated or advertised, or have been performed contrary to the contents of the contract, the consumer may cancel the order, and the expense incurred in returning goods shall be borne by the business (Articles 17(3) and 18(10) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」).

Who is to pay the delivery fee for returning the goods purchased through e-commerce?

Q. When I contacted the supplier to return a pair of shoes purchased through an online shopping business, as the shoes did not fit me, they said I should pay for the two-way door-to-door delivery fee. Is this correct?

A. Yes, the business is correct. the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」, Article 17(9) stipulates that in cases of cancellation of an order due to a reason attributable to a consumer, the expense incurred in returning the goods shall be borne by the consumer. However, where the contents of the goods are different from the contents indicated or advertised, or have been performed contrary to the contents of the contract, the consumer may cancel the order and the expense incurred in returning the goods shall be borne by the business.

Who is to pay the delivery fee for returning goods that were delivered in a bundle?

Q. I bought a T-shirt (KRW 30,000) and a skirt (KRW 40,000) from an online shopping business. The two items were delivered to me in a bundle and I did not pay a delivery fee, as the total amount of the purchase exceeded \50,000. The skirt delivered was poor in quality and I asked the business to accept my return. The business said that I should pay the delivery fee KRW 2,500 for the return. Is this legal?

A. Under Article 17(1) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, Etc.」, a consumer may withdraw his/her offer of the order within seven days from the day the document verifying the contents of the contract was received, provided that where the supply of the goods has been performed later than the delivery of document, seven days from the day the goods have been supplied, or the supply of the goods has begun.

In the case of the withdrawal under the aforesaid provision, the consumer shall pay the expense for the return of the purchased goods. In the foregoing question, unless there was a separate agreement regarding the contractual terms of free shipping at the time of initial contract entry, the contract cannot be invalidated based on subsequent breach of contract. That is, the portion of contract subject to free shipping shall be performed as contracted. And the return is required due to a reason for which the supplier is responsible (poor-quality goods). Thus, the delivery fee is to be borne by the supplier. If the return is due to the customer’s change of mind, then the delivery fee KRW 2,500 is borne by the customer.

Restrictions on the business’s request to have the consumer pay for the penalty or compensation

- In cases of a cancellation of an order, the expense incurred in returning the supplied goods shall be borne by the consumer, and the online shopping business shall not request the consumer either the penalty for a breach of contract or compensation for product damages (Article 18(9) of the 「Act on the Consumer Protection in Electronic Commerce Transactions, etc.」, 「Guidelines on the Consumer Protection in Electronic Commerce, etc.」and the KFTC Public Notice No. 2015-7 dated October 20, 2015 Ⅱ, 9, Ga).

· An online business vs. a consumer returning clothes purchased; request for payment of expenses associated with warehousing and labor in addition to the delivery fee for the return

· An online business vs. a language test applicant cancelling the application within seven days; charging a cancellation fee in an amount equal to 40% of the original payment, despite the sufficient time left until the day of the exam

Expense for the return of the goods purchased through a purchasing agent service provided by a party in foreign countries

Q. I paid KRW 300,000 for a golf club through an overseas purchasing agent. When the product was delivered to me, I was not satisfied with it and asked for a return. The expense for the return charged by the company was much higher than I had expected. What is the fee range to be paid for the return by a consumer?

A. An online shopping business in a foreign country from which a purchase was made can charge a sum of up to 40% of the price of the good for the return due to the consumer’s change of opinion. Thus, the expenses associated with the return is an important factor to consider in the consumers’ purchasing decisions. As for the business’s request for payment of the expense for the return, it is necessary to ask for evidential materials, including receipts, and review the details. Usually, the expense for the return includes transportation fees (domestic and international), import duties, import-handling fee (this item is not to be borne by the consumer), among others. If the business in a foreign country does not provide evidential materials for the returning expense, the business should return such amounts.