China Justice Observer

中司观察

EnglishArabicChinese (Simplified)DutchFrenchGermanHindiItalianJapaneseKoreanPortugueseRussianSpanishSwedishHebrewIndonesianVietnameseThaiTurkishMalay

SPC Issues Prepaid Consumption Rules & Typical Cases

Thu, 08 May 2025
Categories: China Legal Trends

On 14 Mar. 2025, China’s Supreme People’s Court (SPC) issued the “Interpretation on Several Issues Concerning the Application of Law in the Trial of Civil Dispute Cases Involving Prepaid Consumption” (关于审理预付式消费民事纠纷案件适用法律若干问题的解释, hereinafter the “Interpretation”), clarifying judicial rules to address rampant issues such as “merchant absconding with prepayments” and “unfair contract terms”. Six typical cases have also been published.

Prepaid consumption is widely used in China’s catering, fitness, and education sectors, but has been the subject of frequent disputes.

The Interpretation specifically regulates “unfair contract terms”. Clauses such as “no refund after payment”, “no replacement of cards if lost”, and “restrictions on transferring membership cards” will be deemed invalid by courts. In addition, contract terms that require arbitration, but whose arbitration fees far exceed the amount of prepayment, are considered invalid as they unreasonably increase the cost of protecting consumer rights. For “absconding with prepayments”, businesses that maliciously shut down to avoid debts will be subject to punitive damages, and suspected criminal activities will be referred to the police.

Additionally, the Interpretation affirms consumers’ right to terminate prepaid contracts and claim unconditional refunds within seven days of payment, except in cases where identical goods or services have been used.

The six typical cases include scenarios such as “professional store closure facilitators” aiding debt evasion and gyms restricting membership transfers.

The SPC has emphasized its collaboration with administrative departments to combat prepaid consumption abuses and standardize the market through case guidance.

 

 

Photo by Christian Lue on Unsplash

Contributors: CJO Staff Contributors Team

Save as PDF

You might also like

China Enacts Landmark Private Economy Promotion Law

China enacted its landmark first Private Economy Promotion Law, effective May 20, 2025, to guarantee fair competition, streamline market access via a unified negative list, and bolster private enterprises through financing, innovation, and service support.

China Strengthens Criminal IP Protection with New Rules

In April 2025, China’s top court and procuratorate jointly issued a new judicial interpretation to clarify standards for handling criminal intellectual property infringement cases, aiming to strengthen IP protection, particularly in the service sector.

SPC’s 2024 Typical IP Cases Include AI Face-Swap Ruling

In April 2025, China’s Supreme People’s Court released eight typical IP cases, highlighting judicial responses to emerging issues in AI, gaming, and biotech, including a landmark ruling on AI face-swapping copyright infringement.

China Eases Tax Refunds to Boost Inbound Tourist Spending

In 2025, China has lowered its departure tax refund threshold from 500 RMB to 200 RMB and doubled cash refund limits to 20,000 RMB while expanding eligible stores and streamlining processes, aiming to boost inbound tourism spending and promote Chinese products.

Chinese Courts Bolster Pregnant Workers' Rights Protection

In April 2025, China's Ministry of Human Resources and Supreme People's Court released typical labor dispute cases emphasizing stronger protection of pregnant employees' rights, including a case where unlawful job reassignment and salary reduction were ruled illegal.