Perspective | Article-by-Article Interpretation of "Interpretation on Several Issues Concerning the Application of Laws in Trying Civil Disputes over Prepaid Consumption" (Full PDF Download Attached)

(1) Clarifying the scope of application of this judicial interpretation

Specifically clarifies the types of consumption areas to which the judicial interpretation applies, including but not limited to retail, accommodation, catering, fitness, travel, hairdressing, beauty, training, elderly care, tourism, and other industries. It can be understood as covering common service types that use a prepaid model in daily life.

(2) Excluding one-time full payment transactions

"Collecting prepayments and then repeatedly or continuously delivering goods or providing services to consumers" indicates that it is not a one-time transaction, but a model where consumers prepay, and the operator provides goods or services in installments or continuously, such as gym cards, beauty cards, and training course fees. If the operator delivers goods or provides services only once, or if it's merely a deposit or purchase contract, it does not fall under the scope of this interpretation. "Multiple or continuous" is the key limitation here.

(3) Filling the legal gap in prepaid consumption and unifying legal application

In recent years, there have been differences in the application of the law and judicial standards in the handling of prepaid consumption disputes by courts across the country. This article unifies the prerequisite for the application of this interpretation when such cases enter judicial proceedings from the outset.

(1) Cardholders of anonymous prepaid cards have the right to sue the operator

Anonymous prepaid cards may be transferred between consumers, but if the actual cardholder requests the operator to bear the responsibility, the people's court shall not refuse to accept the case because it cannot prove a direct identity relationship between the actual cardholder and the operator. This lowers the threshold for consumers to protect their rights in terms of procedure and provides more protection for consumers using anonymous cards.

(2) Rights protection is also available when the prepaid card holder and the actual user are different

If the person registered on the named prepaid card is not the same as the person who actually exercises the consumer rights, as long as the actual user can provide "preliminary evidence of being a legitimate cardholder" (such as a legitimate transfer agreement, family certificate, shopping voucher, etc.), they can also sue the operator. This is great protection for those who have legally obtained or actually hold the prepaid card.

(3) Consumers can also sue the operator with other preliminary evidence

If consumers can provide preliminary evidence proving a prepaid consumption relationship with the operator (such as bank transfer records, consumption records, chat records, etc.), they can also have their lawsuit against the operator accepted by the court. In practice, some consumption scenarios may not have physical cards or clear naming information, and consumers and operators only have WeChat chat records and bank transfer records. However, as long as the evidence provided by the consumer is sufficient to preliminarily prove a prepaid consumption relationship with the operator, they are also protected by law.

(1) Distinguishing the plaintiff between the guardian and the person under guardianship

When a guardian pays a prepayment for the person under guardianship, and a dispute arises, if the guardian wants to claim expenses related to contract performance, the guardian should sue as one party to the contract, not directly in the name of the person under guardianship. The court should also explain the correct way for the guardian to file a lawsuit to avoid dismissal due to lack of standing.

(2) The person under guardianship can independently seek legal redress if their person or the goods or services received are harmed

If the person under guardianship suffers harm to their physical or mental health or other rights during the service, they can sue the operator as the plaintiff. The people's court should accept this in accordance with the law, reflecting the special protection of the person under guardianship. However, this article does not directly clarify whether the basis of the claim brought by the person under guardianship is based on contractual claims or claims for damages. Based solely on the literal meaning of the provisions in the second paragraph of this article, it is inclined to believe that the person under guardianship brings the lawsuit based on the claim for damages. However, combined with the provisions in the first paragraph of this article and the relevant provisions of the "Civil Code of the People's Republic of China" concerning contracts for the benefit of a third party, the person under guardianship should be able to choose between the two types of claims. Therefore, this issue may cause some discussion in the future, and it cannot be conclusively determined at present.

(1) "Shell operation" does not affect the protection of consumers

Some operators "lend" their business licenses or Brand names to others to operate, while they collect fees but are not responsible for the actual operation and management. Once a dispute arises, consumers often cannot find the person truly responsible. This article stipulates that once an operator allows others to use its name, it must bear the responsibility to consumers and cannot evade responsibility by claiming that "I am not the actual operator".

(2) Reasonable reliance of consumers deserves protection

Consumers have reasonable reliance because of the operator's name, believing that it is a legal or qualified entity. This article upholds the principle of "who grants the name, who is responsible to the consumer", increases the cost of operating under a false name or shell operation, and further strengthens the protection of consumers' legitimate rights and interests.

(1) Clarifying the division of responsibility in chain brand or franchise situations

In chain operations and franchise operations, it is a common situation that consumers choose to consume due to the brand value of the headquarters, but the actual contract is signed with the franchise store. If problems occur in the franchise store, consumers will often hold the franchisor (brand headquarters) accountable. This article clarifies the conditions (choose one) under which the franchisor and the franchisee (franchise store) jointly bear responsibility: the franchisee agrees in advance to assume the contractual obligations; the franchisee subsequently ratifies the contract; the franchise agreement clearly stipulates that the consumer can directly require the franchisee to perform the debt; the franchisee's actions lead consumers to reasonably believe that it is bound by the prepaid contract.

(2) Stipulating the franchisor's obligation to reduce losses

If the aforementioned conditions are not met, but the franchisor is at fault for the occurrence or expansion of the consumer's losses (for example, insufficient scrutiny of the franchise store, serious management deficiencies, etc.), the consumer can still claim that the franchisor bears the corresponding fault liability. By imposing an obligation to reduce losses on the franchisor, it helps to regulate the irregularities in the market where "only franchise fees are collected, regardless of whether the franchise stores are standardized".

(1) The mall venue lessor has a duty to review

The lessor of a mall or other commercial venue should conduct basic reviews of the business qualifications of the operators who move in, such as business licenses and business permits. If it neglects its review, leading to an unqualified operator collecting prepayments from consumers and causing damage to consumers, then the lessor shall bear the corresponding compensation liability. However, it should be noted that if the mall venue lessor has fulfilled the relevant obligations, or if a qualified operator leases the venue to collect prepayments from consumers and causes losses to consumers, then the consumers cannot request the mall venue lessor to bear compensation liability based on this provision.

(2) The mall venue lessor has the right to seek recourse

After the lessor assumes fault-based compensation liability to the consumer, it can then seek recourse from the actual operator. This not only helps protect the legitimate rights and interests of consumers but also balances the interests of the lessor and the operator. This measure can also encourage mall or venue management to pay more attention to the qualification review of the operators who move in and strengthen the protection of consumer rights and interests in commercial practice.

(1) Clarifying the handling methods of operational difficulties and broken capital chains

When an operator encounters operational difficulties and is unable to perform a prepaid consumption contract, it should conduct liquidation according to law and fairly handle the issue of refunding consumers' prepayments. In reality, many prepaid operators, when their business is poor, may delay or simply refuse liquidation, seriously infringing on the legitimate rights and interests of consumers. This article stipulates that the operator should conduct liquidation promptly and according to law under such circumstances. By establishing this obligation to constrain operators, the protection of consumers is strengthened.

(2) Clarifying the responsibility of the liquidator

If the operator has entered bankruptcy or cancellation procedures, liquidation should be conducted according to law. According to the Company Law, the liquidator of a company is the company's directors, who should form a liquidation team to conduct liquidation within 15 days from the date of occurrence of the dissolution event. According to the Partnership Enterprise Law, the liquidator should be the enterprise partners. For individual industrial and commercial households, it is even clearer, because its essence is a natural person engaging in industrial and commercial operations, and the relevant natural person should be the liquidator stipulated here. If the relevant liquidator violates the liquidation obligation, causing losses to consumers, it will need to bear civil liability according to law. Therefore, this provision has positive significance for protecting the legitimate rights and interests of consumers.

(1) Improving the rules for filling contract loopholes

In practice, many prepaid consumption contracts do not have detailed written contracts, or only provide consumers with a card or receipt, with vague key clauses. When the two parties have a dispute over the specific content of the contract and there are different interpretations, an interpretation that is beneficial to the consumer should be made.

(2) Connecting the provisions of the Civil Code and relevant judicial interpretations

Articles 510 and 511 of the Civil Code stipulate the principles of contract interpretation, including textual interpretation, purposive interpretation, supplementing trading customs, and the principle of good faith. The judicial interpretation of the contract chapter of the Civil Code further refines the rules for filling contract loopholes. By emphasizing the spirit of consumer rights protection, this article actually connects the provisions of the Civil Code and relevant judicial interpretations, actively filling relevant contract loopholes, maintaining the construction of the civil law system, and further implementing the "beneficial to consumers" principle in the Consumer Rights Protection Law.

(1) Listing invalid standard clauses

This clause lists common, obviously unfair standard contract clauses, such as "no refund", "no replacement", and "the operator can unilaterally change the material content". These all belong to the types of standard contract clauses that are obviously detrimental or unreasonable to consumers. Therefore, this clause emphasizes the principle of priority protection of consumer rights and interests, and by identifying the relevant standard clauses as invalid, it better protects consumers.

(2) Interpretation of the listed situations clause by clause

◆ 1. Exclusion of the consumer's right to terminate the contract according to law or to request the return of advance payments

Such standard clauses deprive consumers of their right to terminate the contract and their right to a refund of advance payments. For example, clauses prohibiting refunds ("advance payments are non-refundable", "card returns are prohibited"); clauses that place excessively strict restrictions on consumers' right to return cards and refunds (for example, "all amounts must be deducted for refunds"); such clauses severely infringe on consumers' autonomy and property rights, constitute unreasonable restrictions on consumers' right to terminate contracts, and should be deemed invalid. After all, the right to terminate a contract and the right to a refund that consumers are legally entitled to are statutory rights, and the operator may not unilaterally exclude them.

◆ 2. Unreasonably restricting the consumer's right to transfer prepaid consumption contract receivables

This situation is often seen when a consumer has already paid an advance payment but cannot continue to consume and wishes to transfer the balance or contract rights to a third party, but the operator prohibits the transfer through standard clauses; sets overly strict transfer conditions; or imposes excessively harsh restrictions on the transfer object. Such clauses constitute an unreasonable restriction by the operator on the consumer's right to freely dispose of contract receivables and should be deemed invalid. Therefore, unless there are special and reasonable reasons (such as services involving personal attributes), consumers have the right to freely transfer contract receivables.

◆ 3. Stipulating that no replacement will be issued for lost named prepaid cards

Such clauses are often manifested in the operator unilaterally stipulating: "No replacement will be issued for lost named cards" or "lost cards are considered invalid." Because named prepaid cards are clearly linked to the cardholder's identity, the operator should provide a remedy for lost cards. If no replacement is provided at all, it obviously increases the burden on the consumer and violates the principle of good faith. Therefore, named cards, due to the certainty of identity, should provide consumers with reasonable remedies, and standard clauses that completely exclude the obligation to issue replacements are invalid.

◆ 4. Stipulating that the operator has the right to unilaterally change the price, type, quality, quantity, and other material terms of the contract for the goods or services to be redeemed

This situation is the most common and severely infringes on consumer rights, such as: the operator stipulates in the contract that "this company can unilaterally adjust the service price, content, number of times, or duration"; after the consumer pays, the operator arbitrarily reduces the service quality, increases the charges, or lowers product standards. Since consumers should enjoy stable expected contractual benefits when paying, operators must not arbitrarily unilaterally adjust the material content of the contract. If they arbitrarily retain this right, it constitutes an exemption of their own responsibilities, a serious infringement on consumer rights, and should be deemed invalid.

◆ 5. Exempting the operator from warranty liability for defects in the redeemed goods or services or from liability for compensation for losses caused to consumers

In practice, some operators use clauses to explicitly state: "This store does not assume any quality warranty responsibility"; "This store is not responsible for any losses"; "This store is not responsible for any accidents that occur when consumers use this service." Such exemption clauses severely violate the basic legal obligations of operators and the principles of consumer protection. According to the Civil Code and relevant laws, operators bear statutory warranty liability for the goods or services they provide and may not unilaterally exempt themselves through standard clauses.

◆ 6. The agreed dispute resolution method unreasonably increases the cost of consumer rights protection

In practice, such clauses generally manifest as: stipulating jurisdiction in a court or arbitration institution far from the consumer's residence; setting harsh pre-litigation procedures; or requiring consumers to pay excessively high dispute resolution fees. The above provisions will seriously hinder consumer rights protection and effectively force consumers to abandon their right to litigation or arbitration. Unreasonably increasing the difficulty and cost of consumer rights protection constitutes a disguised restriction on consumers' legitimate rights protection and should be deemed invalid.

◆ 7. Other unfair or unreasonable situations (catch-all clause)

This clause is a catch-all clause, and the court can flexibly apply it to unfair standard clauses that are not explicitly listed but objectively exist. For example, restricting consumers' right to complain or evaluate according to law; requiring consumers to bear excessive liquidated damages; significantly increasing the burden of proof on consumers; or restricting or depriving consumers of their personal privacy and personal information protection rights. Regardless of the specific situation, as long as the operator's clauses obviously favor themselves and unfairly harm the legitimate rights and interests of consumers, they can be deemed invalid according to this clause.

(3) Connecting the provisions of the "Consumer Rights Protection Law of the People's Republic of China" and the "Civil Code of the People's Republic of China"

Both the Consumer Rights Protection Law and the Civil Code stipulate the examination and handling of unfair standard clauses. This clause, through enumeration, directly provides clear standards for judicial trials, can unify the judicial standards of courts across the country, and is more conducive to protecting the legitimate rights and interests of consumers.

(1) Distinguishing between persons with no capacity for civil conduct and persons with limited capacity for civil conduct

Contracts for prepaid consumption entered into by individuals lacking civil capacity are naturally invalid, and their legal guardians may request confirmation of the contract's invalidity and the return of prepaid funds by the operator. The same applies to individuals with limited civil capacity, except when the legal guardian subsequently approves or ratifies the contract, or when the contract's content is suitable for their age and intellect.

(2) Handling of goods or services already delivered when returning prepaid funds

The operator may claim that the price of reasonably provided goods or services should be partially deducted, but if the operator illegally provides prohibited services to minors (such as online paid games), they may not claim a deduction. This provision provides direct guidance for handling disputes arising from minors' online top-ups, live streaming rewards, etc. It is evident that, regardless of whether the individual is incapable or has limited capacity for civil action, the law favors protecting minors or other vulnerable groups. Operators should carefully review the consumer's age, intellectual state, and the authenticity of the guardian's consent to avoid the risk of contract invalidity.

(1) Clarifying the effective conditions of receivables transfer

Consumers have the right to transfer the receivables (i.e., unused balance or remaining times, etc.) of the prepaid consumption contract to a third party. As long as they notify the operator and ensure compliance with the contract or legal provisions, it will be binding on the operator. The assignee has the right to request the operator to deliver goods or provide services as agreed in the prepaid consumption contract, and also has the right to request the operator to provide services such as prepaid card name change or Password modification. The operator should cooperate to facilitate the assignee's enjoyment of related services.

(2) Preventing unlimited transfer from damaging the operator's interests

If the prepaid consumption contract stipulates "unlimited services," but the consumer frequently transfers it to different people for use, exceeding the "conventional consumption" range that one person should enjoy, damaging the operator's interests, the operator may claim that the receivables transfer is invalid. This provision reflects the principle of fairness in the Civil Code and also helps balance the interests of consumers and operators.

(1) Operators must not arbitrarily lower service standards or raise Prices

This provision clearly stipulates that operators must not arbitrarily adjust Prices or change service standards after signing the contract. If violated, it is considered a breach of contract and requires the assumption of breach of contract liability. In practice, some operators use the excuse of "the final interpretation right belongs to the merchant" to unilaterally lower service standards or raise Prices, unreasonably increasing the burden on consumers. Therefore, this provision prevents operators from using their dominant position to "unilaterally change the contract terms," thereby protecting the expected interests of consumers.

(1) Interpretation of specific conditions for consumer contract termination

If the operator changes the business location, making it inconvenient for the consumer to receive services, or transfers contract obligations to a third party without consent, etc., the consumer may request termination of the contract, and the court will support it. The following is a clause-by-clause interpretation of the four clauses:

◆ 1. Changes in the operator's business location or service methods that prevent the realization of consumer rights

The change of business location stipulated in this provision, for example, if a consumer purchases a fitness card or beauty card, and later the operator changes stores or moves the business location to a distant location, causing significant inconvenience to the consumer and making it impossible or difficult for the consumer to continue enjoying the prepaid services. In this case, the consumer has the right to claim termination of the contract and request the operator to return the remaining prepaid funds.

◆ 2. Unilaterally transferring contract obligations to a third party without the consumer's consent

This situation is quite common in practice, i.e., the operator transfers contract obligations, transfers shops or business rights, for example: the operator transfers the store or Brand to a third party (such as franchisee transfer, shareholder changes, overall contract transfer, etc.), leading to changes in the original entity that the consumer trusts, while the consumer does not recognize or trust the third party; the operator unilaterally entrusts a third party to perform the service without the consumer's consent, etc. Because the contract is relative, the Civil Law stipulates that the change of the contract obligation subject must be explicitly agreed to by the counterparty to the contract (consumer), otherwise the consumer may claim termination of the contract and request the return of the remaining prepaid funds.

◆ 3. Promising unlimited services but failing to fulfill the contract normally (typical breach of contract)

This type of situation is common in the fields of fitness, beauty, and education and training. For example, a consumer purchases unlimited services for one year, but the operator uses reasons such as full appointments, insufficient venues, insufficient staff, etc. to prevent the consumer from making normal appointments and normal consumption for a long time, indirectly causing the consumer's rights to be lost; although the operator has not "explicitly refused," it actually makes it impossible for the consumer to enjoy the service normally (unable to book classes for a long time, unable to make a normal appointment successfully, etc.). This situation is actually a serious breach of contract by the operator, and the consumer can directly terminate the contract and request a refund, avoiding the consumer from being in a passive state for a long time and suffering continued damage to their rights.

◆ 4. Other circumstances stipulated by law or contract where the consumer can terminate the contract (catch-all clause)

This clause is a fundamental provision. For example, if the contract itself clearly stipulates that the consumer may terminate the contract if the service does not meet the agreed standards or if the operator breaches the contract within a certain period, or if other laws and regulations grant the consumer the right to terminate the contract.

Handling of significant changes in the fundamental conditions for contract performance, such as the consumer's health

If a consumer is truly unable to continue receiving services due to health reasons, they can negotiate with the operator to change or terminate the contract. If negotiations fail, they can request the court to change or terminate the contract. For example: After purchasing fitness, beauty, or educational services, the consumer suddenly falls ill or suffers an accident and is unable to continue receiving services; or the consumer was in good health when the prepaid service contract was established, but later became unsuitable to continue performing the contract due to injury, illness, etc.

In such cases, the consumer may negotiate with the operator to terminate the contract or obtain a partial refund. If the operator refuses to terminate the contract or refund the money, the consumer may request the court to terminate the contract according to law. The court generally considers this situation to be a change of circumstances. As long as the situation is one where "the consumer could not reasonably foresee it, it is not a subjective fault, and it is no longer suitable to continue the contract," the court will support the consumer's lawsuit to terminate the contract.

It can be seen that this clause reflects the special protection provided by the judicial interpretation for consumers in cases where significant changes in objective circumstances make continued performance of the contract clearly unfair. It reasonably applies the principle of change of circumstances in the "Civil Code of the People's Republic of China" and embodies the principle of fairness in civil law.

(1) Applicability of the "seven-day no-reason refund" rule in prepaid consumption

Although the Consumer Rights Protection Law mentions the "seven-day no-reason return" principle for online shopping, there is no clear provision for prepaid consumption, especially in cases where no consumption has occurred or only a small amount of consumption has taken place. This clause stipulates that consumers have the right to request a refund of the prepaid principal within seven days of the payment date without any reason, unless there are special circumstances (such as having actually consumed the same goods/services), thus better protecting the rights and interests of consumers.

(2) Other agreements that are beneficial to consumers

If the operator makes a promise to consumers to allow for a longer period of no-reason refund, the agreement that is more favorable to the consumer shall prevail. This also reflects the basic principle of autonomy of will in civil law and is conducive to strengthening the protection of consumer rights.

(1) Return of remaining prepaid funds

If a prepaid consumption contract is terminated, invalidated, rescinded, or determined not to have come into effect, the operator must return the prepaid funds corresponding to the unfulfilled portion to the consumer, and may need to pay corresponding interest. The amount to be returned shall be the total amount actually paid by the consumer, minus the amount corresponding to the goods or services already delivered or enjoyed (i.e., "deducting the amount already consumed"). The remaining part is the amount to be returned. However, it should be noted that in practice, operators often give consumers certain discounts for prepaid consumption. When deducting the amount already consumed, there is no unified view in previous practices as to whether to calculate it based on the original price or the discounted price. Through a review of some judicial cases, we find that the courts generally make a comprehensive judgment on the amount to be deducted based on the actual discount rate, the price level, the number of times of consumption, etc., rather than simply using a one-size-fits-all approach based on the original price or discounted price. In response to this situation, the Supreme Court has determined the principles for deduction in Articles 18 and 19 of this interpretation, stipulating the specific deduction rules, which are conducive to the unification of judicial opinions. Specific deduction rules are explained in detail in the following text. In addition, regarding the issue of interest, please see Article 16 of this judicial interpretation, which is also detailed in the following text.

(2) Dealing with reasonable expenses and compensation for losses

If a contract is terminated or rescinded due to the operator's breach of contract, fraud, or invalidity, the consumer may claim compensation from the operator for the relevant losses resulting from the termination of the contract. This includes reasonable additional expenses incurred by the consumer to achieve the purpose of consumption; and actual losses or other necessary expenses caused by the invalidity or termination of the contract. However, this does not include cases of change of circumstances or force majeure. If the reason for the termination of the contract is force majeure (earthquake, epidemic, war, etc.) or change of circumstances (policy adjustment, major economic changes, deterioration of the consumer's own health) that makes it impossible to continue performing the contract, the consumer cannot require the operator to bear additional responsibility for reasonable loss compensation and is only entitled to a refund of the balance and interest. This clause clearly distinguishes the responsibilities of the operator and the consumer: if the operator's responsibility is clear, and the consumer's rights and interests are damaged due to the operator's breach of contract, full compensation shall be made; if the contract is terminated due to external objective factors, the operator does not need to be responsible for additional losses, reflecting the principle of fairness in civil law.

(3) Employee prepaid funds do not constitute reasonable expenses

In judicial practice, operators often claim that the costs to be deducted when consumers refund money include commissions already paid to business personnel, sales personnel, and agents. This clause clearly denies this, emphasizing that operators cannot impose internal management costs (i.e., commissions, bonuses, rewards, etc.) resulting from their own employee incentives on consumers. The reason is that the invalidation or termination of the contract between the consumer and the operator does not affect the nature of the operator's internal payment of commissions, which belongs to the enterprise's operating costs or risks. This cost is not a cost that the consumer must bear. Therefore, this clause effectively prevents operators from seizing the opportunity to transfer internal risks to consumers, preventing consumers' rights from being unreasonably impaired. It also reminds the courts that in judicial trials, they should pay attention to reviewing the reasonableness of the amount claimed by the operator to be deducted, strictly distinguishing between "the value of services actually provided" and "prepaid funds for employees" to protect the interests of consumers and prevent operators from encroaching on consumers' prepaid funds under the guise of "commissions" etc.

(1) Distinguishing methods for calculating interest

For the return of advance payment interest, if there is an agreement, follow the agreement; if there is no agreement or the agreement is unclear, for advance payments returned due to the operator's reasons: calculate according to the one-year loan market quotation rate at the time the contract was established. For advance payments returned due to the consumer's reasons: calculate interest according to the benchmark interest rate of one-year fixed deposits announced by the People's Bank of China at the time the contract was established.

(2) Supervised accounts can be calculated based on the actual standard

In some prepaid consumption, the operator will transfer the advance payment into a supervised account as required by the administrative authorities. At this time, the consumer has the right to request interest calculation at the actual interest rate of the supervised funds, which also gives the consumer the possibility of claiming higher interest due to the actual interest rate of the supervised funds.

(1) Clarifying the starting time of interest

This article further clarifies the starting time of interest calculation: In principle, it starts from the termination or invalidation of the contractual relationship, unless the consumer and the operator have made another agreement that is more favorable to the consumer. This further strengthens the protection of consumer rights and interests.

(1) Calculation method for deducting the amount already consumed when the advance payment is returned for reasons not attributable to the consumer

This article is mainly to avoid situations where the operator deliberately exaggerates the value of goods or services already delivered to infringe upon the legitimate rights and interests of consumers when the advance payment is returned for reasons not attributable to the consumer.

If the operator previously provided discounted goods or services, the amount already consumed shall be calculated at the discounted price.

If the operator has given away an amount of money, the discount rate shall be calculated according to the ratio of the actual amount paid by the consumer to the sum of the actual amount paid and the amount given away; the price of goods or services already delivered shall be calculated according to the discount rate, and it cannot be calculated at the original price or an inflated price. It not only clarifies the deduction rules but also unifies the judicial standards, avoiding inconsistent judgments in practice.

(1) Calculation method for deducting the amount already consumed when the advance payment is returned due to the consumer's reasons

This article is mainly to avoid situations where the operator deliberately exaggerates the value of goods or services already delivered to infringe upon the legitimate rights and interests of consumers when the advance payment is returned due to the consumer's reasons.

If the refund is requested due to the consumer's own reasons, the operator can calculate the value of the goods or services already provided at the original price "before the discount", avoiding unfair behavior of consumers who maliciously use the discount and then request a refund. In addition, to prevent the operator from fabricating the original price, this article stipulates that consumers can claim that the "price before the discount is obviously unreasonable" and have the right to request the people's court to calculate the price of goods or services already delivered according to the market price of similar goods or services performed at the place of performance at the time the contract was concluded. In this case, if the operator cannot provide evidence to prove the reasonableness of its price, the court can handle it according to the market price. In summary, this article balances the interests of consumers and operators, maintains the order of transactions, and prevents either party from being damaged due to the improper behavior of the other party.

(1) Preventing operators from demanding extra fees in the name of "original price"

The purpose of this article is to prevent operators from further demanding extra fees from consumers in the name of the "original price". If the consumption amount calculated after the discount does not exceed the advance payment paid by the consumer, but the consumption amount calculated before the discount exceeds the advance payment paid by the consumer, the operator cannot calculate the price at the higher pre-discount price and cannot require the consumer to make up the difference.

(1) Whether gifts should be returned in case of contract termination, invalidation, etc.

This article addresses the issue of whether "gifts or free services" provided by the operator due to marketing activities should be returned in case of contract termination, invalidation, etc. Generally speaking, the court will combine the value of the goods or services already given away, the subject matter amount of the prepaid consumption contract, the performance of the contract, the reason for the refund, and other factors, and make a determination on whether to support the operator's claim in accordance with the principle of good faith.

(2) Analysis of specific judgment standards

So-called gifts, while formally provided free of charge, may in substance be provided only after the consumer prepays a certain amount, thus having the nature of an add-on. The key points for judgment are whether the gifted goods or services are closely related to the main contract content; whether the gift is a promotional or marketing tool, and whether the consumer's reasonable expectation has already incorporated the value of the gift into the overall consideration of the contract, etc. The comprehensive judgment standard for whether "operators gifting goods or services" can be returned or compensated in this clause needs to consider the following factors:

◆ 1. Nature and purpose of the gifted goods or services (whether they constitute part of the contract)

If the gifted goods or services are intended to promote consumer prepayment, or the consumer clearly signs the contract due to the gift, then the gift is closely related to the prepaid contract. If the gifted goods are clearly independent of the purpose of the contract transaction and are of significant value, the operator's request for compensation can be appropriately considered. Conversely, if the gift is a routine marketing small gift that does not constitute a substantial part of the contract, the operator should generally not require the consumer to return or compensate.

◆ 2. Reasons and responsible party for contract termination or invalidity (principle of fairness)

If the reason for the termination of the contract is due to the operator's breach of contract, fraud or other illegal acts, and the operator itself is at fault, it should bear more responsibility, and in this case it is not appropriate to require the consumer to compensate for the gifted goods. If the termination of the contract is due to the consumer, such as the consumer's breach of contract or personal reasons for requesting termination of the contract, then the operator's claim for the return of the gift or price compensation will be considered and supported by the court on a case-by-case basis.

◆ 3. Whether the goods or services have been actually consumed or used

If the consumer has fully consumed the gifted service (such as free courses, services have been completed), and the consumer has indeed obtained obvious benefits, the court may support the operator's request for appropriate price compensation; if the gifted goods are unused or still intact, the operator's request for return or price compensation is somewhat reasonable; conversely, if the goods or services have not been consumed, used or brought obvious benefits to the consumer, the operator usually has no right to claim return or price compensation.

◆ 4. Whether the value of the gifted goods or services is disproportionate to the proportion of the prepaid payment made by the consumer (principle of fairness)

If the value of the gifted goods is very low compared to the actual amount paid by the consumer, it can generally be regarded as marketing cost and should not be claimed back from the consumer; if the value of the gifted goods is too high and significantly inconsistent with the contract prepayment amount, the operator can reasonably claim that the consumer return or compensate appropriately to prevent the consumer from unjust enrichment.

(1) Refund calculation for "unlimited times" service prepayment

In the beauty, fitness, KTV or other industries, "unlimited use" contracts are common, generally where the operator provides unlimited services within a specified period. If the operator fails to continue providing services or the two parties terminate the contract, the consumer can calculate the remaining service payment according to the time proportion, and the court will generally support this principle.

The specific refund calculation method is to refund according to the remaining period proportion, namely:

Refund amount = Total prepayment amount × (Remaining unperformed period ÷ Total contract period).

This calculation method is intuitive and fair, and can prevent the operator from using the characteristics of "unlimited service" which is difficult to define the specific service time, to harm the interests of consumers.

(2) Refund calculation of prepayment when the operator stops service in advance

The most common situation in this case is that the operator terminates its operation in advance due to bankruptcy, closure or other reasons, and the consumer cannot enjoy the services corresponding to the prepayment. The second paragraph of this article stipulates that the remaining unperformed period proportion shall be calculated from the date when the operator stops providing services, and the consumer has the right to claim the refund of the prepayment corresponding to the remaining period. Of course, the operator does not provide services or closes down in advance, constitutes a clear breach of contract, and should also bear the resulting breach of contract liability;

(3) Consumers have no right to claim a refund if they do not use the service within the deadline due to their own reasons

If the consumer does not use the service due to his/her own reasons and has no other justifiable reasons, he/she has no right to require the operator to refund the prepayment.

(1) Regulating the operator's "malicious absconding" after receiving payment

In recent years, some operators have absconded with the consumers' prepayment and ignored the consumers' refund applications, or even escaped or deliberately lost contact, which has seriously infringed upon the legitimate rights and interests of consumers. The provision of the first paragraph of this article provides a legal basis for consumers to claim punitive damages from such operators who seriously infringe upon their rights and interests. However, the specific standard for punitive damages needs to be further refined in the future judicial practice, in conjunction with the relevant provisions of the Consumer Rights Protection Law and the Civil Code.

(2) Strengthening the connection with criminal liability

If the operator's behavior constitutes a criminal offense such as fraud, the court shall transfer the clues to the public security organ. Strengthening the connection between civil and criminal matters will create a high-pressure situation against unlawful elements and strengthen the deterrent effect.

(1) Operators should provide "activation, card replacement" and other services for prepaid cards

The provision of the first paragraph of this article applies to situations where consumers hold prepaid cards and funds are not yet used up. If the card cannot be used normally (for example, the card is damaged, the magnetic strip is invalid, or it cannot be normally identified), consumers may legally require the operator to activate or replace the new card.

The reason is that the funds on prepaid cards are essentially the consumer's property deposited with the operator, and the consumer has the right to dispose of the funds. The operator has the obligation to ensure that consumers can smoothly use the paid funds and cannot restrict consumers' use due to physical or technical problems with the card. Therefore, as long as the consumer's prepaid card has a balance and can be proved to be held by the consumer, the operator has the obligation to provide activation and card replacement services, and the operator must not set unreasonable conditions, charge extra fees, or shirk responsibility.

It can be seen that this provision clarifies the basic service obligations that operators should assume in the prepaid consumption market, prevents operators from arbitrarily encroaching on or freezing consumer funds by refusing services such as "activation and card replacement," thereby ensuring the convenience and security of consumer fund use.

(2) Operators should have the obligation to report loss and reissue for named prepaid cards.

The provision in the second paragraph of this article emphasizes named prepaid cards, that is, cards that are clearly linked to the identity of the cardholder (usually registering names, ID cards, etc.), and consumers have the right to report loss and reissue in case of loss or theft of the card.

The reason is that the ownership of funds on named prepaid cards is clear, and the rights and obligations between consumers and operators are clear. The loss reporting and reissue mechanism is a legal obligation that operators should assume and is a measure to protect the security of consumer funds. If the operator refuses to provide loss reporting or reissue services, consumer funds may be illegally occupied or misused, causing damage to the consumer's property rights. Therefore, the operator has no right to refuse to provide loss reporting and reissue services for named cards, nor can it add additional unreasonable charges (reasonable costs for reissuing cards can be charged).

(1) Clarify the burden of proof and "force" the operator to submit evidence.

In the case of prepaid consumption, contracts and consumption records are generally held by the operator. This article clarifies the burden of proof and stipulates that if the operator refuses to submit the contract text or evidence recording consumption content, consumption times, consumption amount, and prepaid balance, etc., then a presumption unfavorable to the operator can be made according to the disputed situation, and the court can support the consumer's claim. This is also in line with the provisions and spirit of the Civil Procedure Law regarding evidence and the burden of proof.

(2) Take into account the principle of good faith.

By clarifying the burden of proof, it is possible to effectively prevent operators from using their information monopoly to delay or obstruct litigation and avoid putting consumers in a disadvantaged position. This move further balances the game between the two parties and protects the legitimate rights and interests of consumers.

(1) Distinguish between single-purpose cards and multi-purpose cards.

Single-purpose prepaid cards can generally only be used at the operating locations of the same enterprise or the same Brand system. For example, gym membership cards, beauty cards, etc.

Multi-purpose prepaid cards can be used across industries, merchants, and Brands. They are usually issued by regular financial institutions or third-party payment institutions, such as prepaid cards with payment functions or general-purpose stored-value cards in shopping malls. This type of dispute does not apply to this judicial interpretation.

(2) Clarify the applicable scenarios.

This judicial interpretation regulates disputes over single-purpose commercial prepaid cards to avoid conflicts with other financial regulations or payment settlement regulations.