Large Retailers Must Predefine Return Deadlines and Cost Responsibilities for 'Direct Purchase Holiday Gift Sets'

Fair Trade Commission Announces Administrative Notice on Amendment to 'Return Guidelines for Large-Scale Retailers'

Return Conditions Must Include Return Items, Deadlines, Procedures, and Cost Burden
Purchase Volume Should Also Be Considered When Judging 'Direct Purchase Seasonal Products' with Exceptionally Allowed Returns

[Sejong=Asia Economy Reporter Joo Sang-don] In the future, large-scale retailers must specifically agree in advance with suppliers on conditions such as the return deadline and cost burden when directly purchasing holiday gift sets. When judging so-called 'seasonal products' like holiday gift sets, which have a short sales period and unpredictable demand, not only monthly and quarterly sales and inventory but also purchase volume should be considered together.

On the 17th, the Fair Trade Commission announced that it has prepared a revision of the "Guidelines for Illegality Review of Return Practices by Large-Scale Retailers," including these contents, and will conduct a 20-day administrative notice period until June 7.

First, the revision newly defines "return conditions," which large-scale retailers must specifically agree upon with suppliers in advance when returns are exceptionally allowed. Return conditions must clearly and concretely state the return items, timing (deadline), procedures, and cost burden so that suppliers do not suffer unforeseen damages.

The return conditions to be agreed upon when concluding direct purchase contracts were also specified. For example, in the case of holiday gift sets, the return deadline should be "within 30 days from the end of the holiday," the return procedure should be "return products are stored at the retailer's logistics warehouse, and after confirming the returned products at that location, they are handed over to the supplier," and the cost burden should be "the cost of transporting the products to the return location is borne by the retailer, and costs incurred after that related to the return are borne by the supplier."

The criteria for judging seasonal products, such as holiday gift sets, Christmas trees, and Valentine's Day chocolates, for which returns are exceptionally allowed after purchase, were also supplemented. Going forward, seasonal products will be judged comprehensively by considering not only monthly and quarterly sales and inventory but also purchase volume.

Additionally, the revision clarified that electronic signatures are acceptable when signing written agreements regarding returns.

A Fair Trade Commission official said, "By clarifying the meaning of return conditions, which are an important standard in judging the illegality of unfair return practices through this revision, we expect to induce large-scale retailers to comply with laws on their own and prevent suppliers from suffering unforeseen damages due to unfair return practices." He added, "The Fair Trade Commission plans to finalize and implement the revised return guidelines after fully collecting stakeholders' opinions during the administrative notice period."

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