Online Terms, Refunds and Chargebacks: What Hong Kong E-Commerce Businesses Must Know

Online Terms, Refunds and Chargebacks for Hong Kong E-Commerce

Hong Kong has no statutory cooling-off period or right of return for online purchases. Refund policies are a matter of the trader’s own contract terms. The legal framework that governs online terms, refunds and chargebacks in Hong Kong e-commerce spans the Trade Descriptions Ordinance, the chargeback mechanism, and the Personal Data (Privacy) Ordinance obligations that apply when collecting customer data during online transactions.

Hong Kong Online Refund Policy Requirements

Hong Kong has not enacted a mandatory cooling-off period or a statutory right of return or refund for e-commerce. A refund policy is purely contractual. The trader decides the terms. The customer agrees to them at the point of sale.

The general law still applies. A refund policy that is misleading or that the trader does not honour may fall within the Trade Descriptions Ordinance (Cap. 362). The Customs and Excise Department enforces that ordinance. A trader who advertises a refund policy but refuses to honour it without a valid reason may be committing a misleading omission or an aggressive commercial practice.

There is no legislation in Hong Kong specific to online retail. The trader’s own terms, clearly displayed before payment, form the contract. If the terms promise a refund within 30 days, the trader must comply. If the terms say all sales are final, the customer has no right to a refund unless the goods are defective or the trader has committed an offence under the Trade Descriptions Ordinance.

Chargeback vs Refund Hong Kong

A refund is the trader returning the customer’s money under the trader’s own terms or as a goodwill gesture. A chargeback is different. It is a card scheme mechanism between the cardholder’s issuer and the merchant’s acquirer under the scheme’s own rules. It is not a statutory remedy in Hong Kong and it is not the same thing as a refund under the trader’s terms.

When a customer disputes a transaction, the cardholder issuer may initiate a chargeback. The merchant acquirer then debits the merchant’s account and may impose a fee. The merchant can represent the transaction with evidence, but the process is governed by the card scheme rules, not by Hong Kong legislation.

A chargeback does not require the trader’s consent. The customer may seek a chargeback even if the trader’s refund policy says no refunds. Common chargeback reasons include non-delivery, goods not as described, or unauthorised use of the card. Respond promptly to chargeback notifications. Provide evidence: delivery confirmation, order records, and the customer’s agreement to the terms.

Trade Descriptions Ordinance Online Selling Hong Kong

The Trade Descriptions Ordinance (Cap. 362) is the generic consumer protection statute in Hong Kong. It prohibits false trade descriptions, misleading omissions, aggressive commercial practices, bait advertising, bait-and-switch, and wrongly accepting payment.

The Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012 came into force on 19 July 2013. Enforcement is by the Customs and Excise Department.

For online sellers, the most relevant offence is wrongly accepting payment. This covers a trader accepting payment for goods or services while intending not to supply them, or with no reasonable grounds to believe it can supply them within a reasonable period. A shipping promise a business cannot keep is the ordinary way an online seller meets this offence.

Bait advertising and bait-and-switch are also relevant. Bait advertising is advertising goods or services at a specified price without a reasonable intention to supply them at that price. Bait-and-switch is advertising goods or services at a specified price and then refusing to show or demonstrate them, or refusing to take orders for them, with the intention of promoting a different product.

A misleading omission is failing to give material information that the average consumer needs to make an informed transactional decision. For online sellers, this could include failing to disclose delivery charges, delivery times, or the existence of a refund policy.

Personal Data Privacy Ordinance and Online Transactions

Taking a customer’s name, address, contact details and payment details makes the company a data user under the Personal Data (Privacy) Ordinance (Cap. 486). The six data protection principles apply.

Data protection principle 1 requires the data user to collect personal data lawfully and fairly, for a lawful purpose related to a function or activity of the data user, and to tell the data subject the specified information at the time of collection. Give a Personal Information Collection Statement at or before the time of collection.

Data protection principle 2 requires the data user to keep personal data accurate and no longer than is necessary. Do not retain customer data indefinitely after the transaction is complete.

Data protection principle 3 requires the data user to use the data only for the purpose it was collected for or a directly related purpose, unless the data subject gives prescribed consent. Using the customer’s email address for marketing without consent breaches this principle.

Data protection principle 4 requires the data user to take all practicable steps to protect personal data against unauthorised or accidental access, processing, erasure, loss or use. Put appropriate security measures in place.

Data protection principle 5 requires the data user to be open about the kinds of personal data held and the policies and practices for handling it.

Data protection principle 6 gives the data subject a right of access to their personal data and the means to correct it.

The PDPO’s obligations sit on the merchant as data user regardless of which payment provider processes the card. Arranging matters so that card details reach the provider rather than the merchant’s own systems reduces what the merchant holds. It does not remove the merchant’s duties over the customer data it does hold.

Direct Marketing Consent

Personal data may not be used for direct marketing without the data subject having been informed and having given consent. A data subject may require the data user to cease using their data for direct marketing at any time. The data user must comply without charge.

For online sellers, the checkout process must include a clear opt-in for marketing communications. Pre-ticked boxes are not compliant. Provide an easy way for the customer to opt out later.

Practical Steps for Compliance

An online seller should:

• Display clear refund and return terms before payment is taken.
• Ensure shipping promises are realistic and can be fulfilled.
• Respond promptly to chargeback notifications with evidence.
• Give a Personal Information Collection Statement at the point of data collection.
• Obtain explicit consent before using customer data for direct marketing.
• Retain customer data only as long as necessary for the transaction and any legal obligations.
• Secure customer data against unauthorised access.

The Customs and Excise Department enforces the Trade Descriptions Ordinance. The Office of the Privacy Commissioner for Personal Data enforces the PDPO. A breach of either can result in investigation, enforcement action, and reputational damage.