New Regulation to Protect Consumers in COD Transactions

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New Regulation to Protect Consumers in COD Transactions

Thailand’s digital economy is set to see significant changes with the introduction of new regulations governing Cash on Delivery (COD) services. Following our previous article on the Thailand Implements Comprehensive Regulations for Cash-on-Delivery (COD) Services to Enhance Consumer Protection, the new regulation, titled “Designating Goods Delivery Services with Cash on Delivery as a Business with Controlled Receipt of Payment Items B.E. 2567 (2024),” will come into effect on 3 October 2024.

Under the new rules, logistics providers offering COD services will be required to include essential details on shipping documents. These include information about the sender, the logistics company, and the name and surname of the person receiving payment, along with a parcel tracking number. This increased transparency aims to enhance accountability in online transactions.

A key feature of the regulation is the mandatory 5-day holding period for payments. Logistics companies must retain the payment for five days before transferring it to the seller. This provision gives consumers a reasonable timeframe to report issues and request refunds if problems arise with their purchases.

The regulation also empowers consumers with the right to inspect goods before making payment. If upon inspection, the items are found to be different from what was ordered or have quality issues, consumers can refuse payment and reject the delivery on the spot.

Detailed Consumer Rights for Refunds and Returns

The new regulation provides specific scenarios where consumers are entitled to refunds:

  1. If the received goods do not match the order or are defective, the business operator must accept the return from the consumer, send it back to the sender, and refund the consumer.
  2. In cases where the consumer did not order the goods but received and paid for them if it can be proven that the consumer did not place the order, the business operator must accept the return and refund the consumer.
  3. When the business operator receives payment from the consumer, they must hold the funds for five days from the date of delivery and payment. If the consumer does not request a refund within this period, the business operator can then transfer the money to the sender. However, if the consumer reports issues within the five-day period (such as receiving unordered goods, mismatched orders, or defective items), and the business operator confirms these issues after inspection, they must refund the full amount to the consumer within 15 days of receiving the complaint. The goods are then returned to the sender.
  4. If the consumer receives and opens the package in the presence of the business operator, the process must be documented through photographs, video, or other evidence. If both parties find that the goods do not match the order or are defective, the consumer has the right to refuse acceptance of the goods.

It is important to note that these refund criteria do not apply to cases where consumers request refunds for reasons other than those specified above.

This comprehensive approach to regulating COD services reflects the government’s commitment to addressing the challenges in the rapidly growing e-commerce sector. By providing clearer guidelines and stronger consumer protections, the regulation aims to boost confidence in online shopping and promote a more trustworthy digital marketplace in Thailand.

Key Takeaways:

  1. New regulation for Cash on Delivery (COD) services effective October 3, 2024
  2. Aims to address issues in online shopping using COD
  3. Requires detailed information on shipping documents
  4. Implements a 5-day holding period for payments
  5. Allows consumers to inspect goods before payment
  6. Provides clear guidelines for refunds and returns

Author: Panisa Suwanmatajarn, Managing Partner.

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