I. What are the common types of prepaid consumption?

Prepaid consumption generally refers to the use of single-purpose prepaid cards that allow consumers to redeem goods or services multiple times following advance payments. Most membership cards of supermarkets, hair salons, gyms and other venues alike for consumers are single-purpose prepaid cards. However, payments of prepaid decorating fees, housing rentals, furniture and other goods do not generally qualify as consumption activities by using single-purpose prepaid cards.

II. How can individuals better protect their rights and interests in the case of prepaid consumption?

For prepaid consumption, a consumer must sign a written contract with the business concerned after carefully acquainting themselves with the terms and conditions rather than the simple verbal agreement in order to prevent any potential ambiguity of responsibility in case of disputes. After payment, the consumer is advised to obtain and retain all relevant contracts, invoices or service documents from the business. Notice that money should not be transferred to individuals.

III. What issues should consumers be mindful of when signing contracts with businesses for prepaid consumption?

Before concluding a service contract for prepaid consumption, a consumer should ask the business to include in the contract the matters that are of greatest interest to him/her. According to the Regulations on Management of Single-Purpose Prepaid Cards in Beijing Municipality, the contract must at least include the following items:

1. The names and contact information of both parties;

2. The information on the collection account of the business operator, amount received in advance, payment method, and performance guarantees;

3. The content, location, quantity/amount, and quality of the paid goods or services, as well as payment calculation types, rates and charges, and deduction methods;

4. The period of fulfillment, as well as the status of the business premises (whether it is owned or leased by the business) and its lease term (if applicable);

5. Risk alerts;

6. The scope and conditions of use of the complimentary benefits and the ways to handle refunds;

7. The methods for handling advance payments in the event of changes, suspension, or termination;

8. The calculation method, channel, and service fees of refunds;

9. Methods of loss report and replacement of cards and transfer of ownership of the card;

10. Methods for inquiring about consumption records and balance;

11. Liability for the breach of the contract;

12. Methods for resolving disputes.

IV. What contract templates are available for use in signing prepaid consumption contracts in Beijing?

As of December 2023, the municipal authorities of commerce, sports, human resources and social security, civil affairs, health, urban management, transport, and culture and tourism have issued 12 sets of sample contracts together with market regulation authorities, which cover retail, catering, residential services, sports and fitness, adult fitness training, professional technical skill training for vocational qualifications, vocational skills training, elderly care, infant and child care, medical beauty services, residential heating, online bike leasing, motor vehicle maintenance, and for-profit cultural and artistic training. Consumers and business operators are expected to refer to or use these samples for subsequent written prepaid card contracts.

V. If there's a change to the ownership, name or/and legal representative of a business, can its consumers ask for the continuation of services provided by it?

The change to the name, legal representative, person in charge, or/and contractor of a business is/are not sufficient cause for it to refuse to fulfill any obligations for single-purpose prepaid card contracts. Consumers have the right to require the business concerned to continue providing services.

VI. How can consumers protect their rights when businesses collecting advance payments close their stores and/or cannot be contacted?

If the business concerned is a chain branch, consumers can contact its headquarters and demand it to continue providing service and handle refunds. In the case where the business concerned is operated independently, or its headquarters refuses to take on the relevant obligations, consumers are advised to take contracts, invoices, and other evidence to the responsible administrative authority or governing consumer organization as soon as possible or raise a lawsuit with a people's court.

VII. What should consumers do if they want to return recently purchased cards that have never been used?

According to the Regulations on Management of Single-Purpose Prepaid Cards in Beijing Municipality, every consumer is entitled to a "seven-day cooling-off period". Any consumer who has not redeemed goods or services within seven days from the date of purchase of a prepaid card has the right to request a refund from the business operator who shall be obliged to return the advance payment in full and at one time within five days from the date the request is received. The consumer must return gifts or additional services they may have received from purchasing prepaid cards or pay a price commensurate with the value. In the event the business refuses to refund the advance payment during the "seven-day cooling-off period", the consumer may file a complaint to the responsible administrative authority or governing consumer organization.

VIII. What if a consumer doesn't want to continue using the card and asks the business for a refund, but the business refuses?

Consumers and businesses are encouraged to negotiate on an equal footing and settle without interference from a third party. If both parties have concluded a contract, the contract should be followed. Consumers and businesses unable to reach a consensus may request mediation from the governing consumer organization, appeal to the responsible administrative organ, or seek arbitration, litigation, or any other proper method for resolution.

IX. How can consumers of a business protect their rights and interests when the business has announced that it is closing its doors and will entrust the provision of prepaid services to another business?

Any consumer agreeing to receive the continued services from another business must sign a tripartite contract with the two businesses to secure evidence for the protection of their rights. Consumers unwilling to accept services from another business may negotiate with the current one for refunds.

X. What should a consumer do if he/she has failed to reach a mediation agreement with a business operator on a dispute regarding prepaid consumption?

In the event the business operator and its consumers fail to reach a mediation agreement within the prescribed timeframe or both parties indicate an inability to reach an agreement through mediation, the responsible mediation authority will terminate the mediation in accordance with the law, after which consumers will be free to resolve their dispute through legal proceedings, arbitration, or any other channel.

(Source: Beijing Municipal Market Regulation Administration)