Temu Faces Regulatory Pressure Over Controversial Refund Policy

Chinese authorities urge PDD Holdings to address 'refund without return' practices that strain small merchants' profits.

China's State Administration for Market Regulation and Ministry of Commerce have called on PDD Holdings, Temu's parent company, to revise its refund policy, which allows customers to claim refunds without returning products.
The refund policy has been criticized for disproportionately harming small merchants by cutting into their profit margins and creating market imbalances.
Earlier this year, merchants protested at PDD's Guangzhou office, citing significant financial losses due to fines and unresolved post-sale issues linked to the refund policy.
Temu's rapid growth in the U.S. and its competitive push to rival Amazon have intensified scrutiny, with potential changes to customs de minimis rules threatening to increase costs for sellers.
PDD Holdings has not commented on the regulatory meeting, though it previously stated it was working with merchants to address their concerns.