Chinese supplier refuses refund: an illustrative scenario

Identify the basis for the refund

Write down what the supplier promised, what you paid and what has happened since. Was there an agreed shipment date? Did the seller accept cancellation in writing? Have you rejected goods, and why? A message asking for a refund is less useful than a chronology linking the request to specific obligations and records.

Review refund conditions, cancellation charges, inspection periods and any agreed dispute procedure. Under the Civil Code, available remedies depend on the breach and the contract. A refund claim can require a termination or other legal basis; non-performance does not make every requested amount automatically recoverable. Check this before declaring that the contract is cancelled.

• Source: PRC Civil Code — contract obligations, remedies and limitation rules

Check what the payment actually represents

Buyers often use ‘deposit’ to describe a first instalment, a sample fee, tooling costs or a separate security payment. The invoice label alone may not establish its legal treatment. Match the payment to the contract wording and the supplier’s acknowledgment. Record whether it was credited toward goods, reserved for development or linked to an agreed cancellation provision.

If the supplier claims to have bought materials or completed production, ask for dated records tied to your order. Distinguish costs it says it incurred from goods actually delivered or accepted. Avoid accepting an unexplained deduction simply because the supplier calls it a production cost. Equally, do not assume costs are irrelevant when the buyer changed specifications or stopped an order.

Confirm who owes the money

Compare the supplier’s Chinese registered name, contract stamp, invoice issuer and bank beneficiary. A trading name on a website may refer to a factory, an export company or an agent. If payment went to a different entity, obtain the instructions authorizing that arrangement and any confirmation that the seller received the money.

Keep a simple party chart showing the buyer, contracting seller, payment recipient and manufacturer. Do not replace the contracting company’s name with the name of a salesperson. A demand sent to the wrong business can produce weeks of circular correspondence and leave the actual defendant unclear when legal action is considered.

Prepare a refund evidence file

Preserve full records, including messages that are inconvenient to your position. A buyer’s approval of a revised delivery date, sample or cancellation deduction can affect the dispute. Keep original emails and export chat history where possible; isolated screenshots may omit participants, dates or attachments. Explain any missing records instead of filling the gaps with assumptions.

• Signed contract, accepted purchase order, order confirmation and terms available when the order was placed.
• Payment instructions, bank transfer confirmation, beneficiary details and supplier acknowledgment of receipt.
• Agreed delivery dates, specifications, inspection reports and records showing what was or was not supplied.
• Complete cancellation and refund discussions, including proposed deductions or repayment dates.
• A calculation separating the requested principal, amounts already returned and any separately claimed loss.

What to do before sending another payment

Ask the supplier to state its refusal and proposed solution in writing. If it says a processing fee or new order is required before a refund, request the contractual basis and verify the recipient independently. Do not assume that paying another charge will unlock repayment. A change of bank account or contact person warrants a separate verification step.

Notify a platform or payment provider promptly if that route is available, and preserve its deadlines and decision records. A provider’s process depends on its own terms and the payment method. A wire transfer, card transaction and escrow payment should not be treated as having the same reversal rights. Ask the provider what it can actually do.

When a negotiated refund is practical

Negotiation may be useful when the supplier acknowledges the order, remains contactable and can explain a genuine disagreement about costs or performance. Send a focused demand identifying the parties, order, payment, refund basis, requested amount and response date. Attach the key records rather than an unsorted archive. Keep the response deadline realistic for the issue.

If repayment is to be staged, specify amounts, dates, payment account and the effect of a missed instalment. Address whether releases take effect only after funds clear. Have any proposed settlement checked before signing, particularly if it replaces the original contract or contains a new forum clause. A promise to refund ‘when cash flow improves’ leaves the central risk unresolved.

When China-side legal review becomes useful

Seek review early if the supplier repeatedly changes its explanation, disputes the contracting party, asks you to sign a broad waiver or appears to be closing its business. The immediate task may be verifying the company and preserving evidence, rather than sending a more aggressive letter. Include any indication of asset disposal or an existing court notice.

A lawyer can examine the refund basis, notice requirements and dispute clause, then compare the likely work and costs with the amount and recovery prospects. Possible asset or evidence preservation needs a legal basis and a proper application; it is not a routine consequence of making a complaint. Discuss what information is available and what remains unverified.

Arbitration, litigation and actual recovery

Review the dispute clause before choosing where to file. A valid arbitration agreement can determine the route. The revised Arbitration Law took effect on 1 March 2026; advice should use the applicable law and institutional rules rather than an old online template. The governing law, forum and location of assets are distinct questions.

The claim must explain why the supplier owes a refund and support the amount with records. If a decision or award is obtained and the debtor does not comply, enforcement can become a separate stage. Evidence of liability is not evidence that money is available. Ask for an assessment of both the claim and the practical prospect of collecting it.

• Source: PRC Arbitration Law — revised law effective 1 March 2026

Common mistakes in supplier refund disputes

Avoid threats, public accusations or statements that you will abandon all claims merely to obtain a reply. Do not delete chats after a salesperson blocks you. Keep the order references consistent and identify the person authorized to negotiate for your company. Parallel demands from several departments can create contradictory settlement offers.

Before the assessment, agree internally whether you would accept a partial refund, replacement goods or a repayment schedule. Explain the commercial reasons for that preference. HAIYU can review the documents and China-side route, discuss the scope of any further engagement and help identify the next decision. Sending an inquiry does not itself begin representation.