Alibaba Trade Assurance Guide (Avoid Being Scammed)

If you know anything about Alibaba, you must have heard of the Alibaba Trade Assurance. Everyone is telling you that trading through Alibaba Trade Assurance is safe for you, so what exactly is a Trade Assurance, how it works and how it guarantees your rights?

We will explain in detail for you below.

What is Alibaba Trade Assurance?

“Alibaba Trade Assurance” (TA) is a professional cross-border B2B transaction system under Alibaba.

It is committed to providing safe and efficient transaction services for global buyers and sellers, integrating resources from all parties to provide comprehensive cross-border payment, settlement, finance, logistics and other services help buyers and sellers to easily realize global buying and selling.

In traditional trade, both parties value security and credit most, but they suffer from the lack of a credit system that can be directly referenced. It is inefficient to establish and maintain cooperation to build trust by relying on their own efforts.

In recent years, the new generation of entrepreneurs has been highly dependent on Internet technology, with limited funds and weak risk tolerance, and there is an urgent need for a safe and fast transaction environment.

As a result, in 2014, Alibaba Trade Assurance developed rapidly after it went online.

The principle of a Trade Assurance order is basically the same as that of a Chinese purchase of products on Taobao.

When an overseas user purchases a product, the funds are first transferred to Alibaba Trade Assurance account, and then the buyer will wait for the seller to deliver the products.

Once the products have passed the quality inspection and shipped on or before the specified deadline, Alibaba will release the funds to the supplier’s account.

Simply put, Trade Assurance is Alibaba’s order protection service-providing a safe online environment for global trade between suppliers and buyers.

There is no ‘refund’ or “chargeback’ mechanism in place when writing money directly to a suppliers bank account. Alibaba is bridging that gap by acting as a middleman between the buyer and seller.

The following is Alibaba’s explanation of Alibaba Trade Assurance:

Alibaba Trade Assurance is a free service offered by Alibaba.com, designed to help build up trust between buyers and suppliers.

It minimizes risk by guaranteeing money back in the event of a supplier failing to meet the terms of the order contract – including delivery delays, quality and quantity discrepancies or other processing problems.

You’ll be covered if:

• Your products are not shipped on time as per the order contract
• Your products do not meet the quality standards as per the order contract

If dissatisfied with the order, you can apply for refund. If supplier agrees on your refund request, payment will be returned. If not, alibaba will step in to arbitrate.

How does Alibaba Trade Assurance Protect Buyers?

Buyers and suppliers make transactions through Trade Assurance orders, and Alibaba will provide buyers with the following supplier guarantees:

• On-time delivery: If the supplier does not deliver the goods after the date of contract confirmation, the buyer can apply for a refund from Alibaba.
• The product quality is consistent with the contract: If the product quality cannot meet the quality standard specified in the contract, the buyer can apply for a refund from Alibaba.
• Payment security: Confirm that your payment is safe, the seller will send you an order.

In short, if the quality of the product or the delivery date is inconsistent with the agreement between you and the supplier in the online Trade Assurance, you can file a dispute and Alibaba.com will mediate to achieve a satisfactory result, including getting your money back. You can learn more about what’s covered by Trade Assurance here.

How do you find Trade Assurance suppliers?

The premise of creating a Trade Assurance order is that your supplier supports Trade Assurance.

There are several methods to find suppliers that support Trade Assurance service.

• When searching for products, refine the search result by selecting “Trade Assurance.”

• Go to the supplier’s minisite to see if they have the Trade Assurance icon on their page.

Recommended reading: Is Alibaba Safe/Legit? How To Buy From Alibaba Safely?

Who can apply to be Alibaba Trade Assurance supplier?

Trade Assurance is free to apply. As long as the supplier meets the following conditions：

1.Alibaba.com account’s registered country is China or Malaysia.

This means that currently only Gold suppliers from mainland China and selected overseas suppliers can apply for Trade Assurance to receive from buyers through alibaba.com Payment.

2. Alibaba.com account is Gold Supplier Membership.

Basically all suppliers on Alibaba meet this condition. Then they just need to log in to their Alibaba.com admin account to apply.

In other words, in terms of rigid conditions, all suppliers can provide Trade Assurance services as long as they apply for.

Although Trade Assurance is a service that guarantees the interests of buyers, Alibaba also has some benefits for suppliers that support Trade Assurance.

We will explain this in detail in the following chapters.

FURTHER READING

• How To Select And Verify China Suppliers?
• Is Alibaba Legit? How to Know if Alibaba Supplier is Safe?
• How To Find a Product Mmanufacturer in China?
• Is Alibaba Safe/Legit? How To Buy From Alibaba Safely?

Can Global Gold Suppliers use Alibaba Trade Assurance?

Currently, only gold suppliers from mainland China and selected overseas suppliers can apply for trade assurance to receive payments from buyers through alibaba.com.

Is a trade margin required?

Buyers can get free Trade Assurance. Gold suppliers from China, Hong Kong and Taiwan must pay a transaction fee of between 1% and 2% of each transaction, but the upper limit is US$100. There are no other additional transaction fees.

Do all suppliers accept Alibaba Trade Assurance orders?

Alibaba Trade Assurance helps buyers and sellers to solve the trust problem in the transaction process, and protects the interests of both parties, the safety of goods, and the safety of money.

And accepting Trade Assurance orders can also help suppliers improve their store star rating.

The total transaction volume of Trade Assurance is an important indicator of star rating. The higher the store rating means that the supplier can get more traffic, and more traffic can bring more orders.

Therefore, Trade Assurance is beneficial to most buyers.

However, in the following 2 situations, the supplier may be reluctant to make a deal through Trade Assurance orders:

1. The buyer’s order amount is greater than the supplier’s trade assurance limit, and the supplier’s capital turnover is difficult.

The practice of most cross-border e-commerce trading platforms for fund protection is that the buyer confirms the receipt and then releases the money to the seller’s account to realize the guarantee.

In view of (B2B) large cross-border trade payments will seriously affect capital turnover, Alibaba authorizes the trade assurance limit of each Trade Assurance supplier based on the previous trade record.

Once the buyer’s payment reaches the bank account designated by Alibaba, the supplier can immediately receive payment within the trade assurance limit.

If the supplier’s trade assurance limit is insufficient to cover the order amount, the buyer’s payment will be frozen. After the order is completed, the frozen amount will be released to the supplier.

And an order usually takes two months to three months from the time the order is placed to the buyer’s receipt.

This means that when the buyer’s order amount is greater than the supplier’s trade assurance limit, it will take at least two months for the supplier to receive the payment.

When the supplier’s capital turnover is difficult, the Trade Assurance may not be accepted. Now the trade assurance limit of suppliers can’t be seen by buyers.

2. Suppliers have no confidence in the quality of their products.

Through the Trade Assurance order transaction, the buyer and the supplier can agree on the quality requirements of the order in the Trade Assurance order system.

For example, you write in the order that the product must meet the REACH standard. If the product provided by the supplier cannot be reached, the buyer can initiate a dispute with the order through Alibaba and ask for a refund.

In order to avoid the risk of compensation or refunds, suppliers who have no confidence in their own quality or deliberately sell inferior products will refuse to trade through Trade Assurancee. Of course, they will not tell you the truth.

How to create a Alibaba Trade Assurance order?

Both buyers and suppliers can place Trade Assurance orders.

1. If you have found an online product on Alibaba.com:

You could click “Start Order” on the product detail page to place order directly or click “Contact supplier” to check more details with the supplier, then ask the supplier to draft the order for you.

If you are a novice, I suggest you check our article first: How to buy from Alibaba safely? (The most complete guide for 2021)

2. If you want to draft order directly for customized products:

You could click “Order with Trade Assurance” on the Alibaba.com homepage to draft an order or go to “Orders” > “All Orders” and click “Draft Trade Assurance Order“.

Then choose to “add products” or “add contract” directly.

After submitting the order, you could manage your order on Order Management page.

How to modify Alibaba Trade Assurance order?

The Trade Assurance order status decides how you can modify your order. Please refer to the following to learn how you can modify your order:

1. For orders that are waiting for the supplier to confirm the order, waiting for payment, or waiting for the supplier to ship:

Buyers cannot modify directly. Please go to All Orders and click “Request modification“, enter your request and wait for the supplier’s response.

2. For orders where the payment is being processed

Buyers need to wait for the payment to arrive before they can make modifications to their order.

3. For orders waiting for delivery confirmation

Modifications cannot be made to the order. However, each party can extend the receiving time of the order once, for a period of 15 days. Therefore, in total the receiving time of the order can be extended by 30 days.

What are the payment methods and fees of Trade Assurance order?

Please refer to this list for different payment methods and their respective fees:

Remarks:

1. Credit/Debit Card supported currencies:

2. Countries that support domestic wire transfer: US, Australia, Canada, UK, Japan, New Zealand，and other European countries

3. Limitations on domestic wire transfer: No limitation for payments in USD and up to US $1000,000 for other currencies

4. Supported currencies in international wire transfers: We recommend you pay in USD as paying with other currencies may introduce additional charges.

5. Western Union Transaction fee details:

How do I open a dispute for my Trade Assurance order?

Whether you can open dispute rests on order status, and only after payment received will you be allowed to open dispute, otherwise you need to click Cancel Order to close it.

If you sign in with computer, please follow below steps:

1. Go to Orders-All Orders, find the order, and click View More to order detail page.

2. On the order detail page, click Apply for refund to open dispute.

3. Fill the dispute form then click “Submit”. Requirements for the evidences: Max. file size: 10MB, Maximum of 5, format: jpg, jpeg, png, gif, zip. Special characters are not acceptable.

4. After submitting the dispute, please wait for your supplier’s response. Here are some tips for you to handle the case:

a. You could check the dispute status and manage your dispute on the dispute detail page. Please go to Order Management page, find the order and click ‘View refund application’ to check the status.

b. You could escalate the case manually and request Alibaba dispute team to get involved from the 4th day onward or wait for the automatically escalation on the 31st day.

c. Please click here to view the whole dispute process to learn how dispute works on Alibaba.com.

d. As to when the case will be resolved, due to the uncertainty of complaint processing factors, like the responding efficiency by both parties, it’s hard to specify when case will be closed.

To end it fast, please cooperate with the dispute agent after escalation.

What’s the refund process for Alibaba Trade Assurance?

1. After the buyer submits dispute, the two parties have 3 to 30 days to negotiate without the involvement of Alibaba.

If the supplier provide different proposal, buyers could request Alibaba.com’s assistance by clicking the “Escalate Dispute” button, or may continue to negotiate with the supplier.

If no response from the supplier, then buyers could escalate the case from the 4th day.

2. During the negotiation period, both parties need to respond each other’s proposal within 7 days, otherwise the dispute will be escalated (no reply from supplier in due time) or cancelled (no reply from buyer in due time) automatically.

3. Alibaba will also act as a mediator for any disputes which remain unresolved after 30 days of initial opening.

Please find below dispute workflow:

Step 1: Buyer applies for refund.

Step 2: Buyer and seller negotiate with each other. The process is as below:

Step 3: If no agreement reached after negotiation and the case has been escalated, Alibaba dispute team will handle the case as follows:

Step 4: The refund or return process will be proceed after the dispute team makes determination.

Note:

1. Buyers can cancel dispute on the dispute detail page before case escalation or request Alibaba dispute team to cancel the dispute after case escalation.

2. Alibaba dispute team will response your case in 5 working days normally.

How to submit a dispute for offline order?

According to Alibaba dispute rules, Alibaba.com will only handle the complaint if the supplier fails to deliver products after payment or if the buyer refuses to pay after delivery for offline order.

They will not handle complaints related to product conformity, damage, or shortage. Therefore, we strongly suggest that you make payments online via Alibaba.com and add Trade Assurance to protect your payments and products.

How to use Trade Assurance effectively?

Alibaba cannot provide refunds based solely on the buyer’s request. After all, Alibaba generates revenue through membership fees, which are paid by companies listed as gold suppliers.

Through the above process of handling disputes by Alibaba, it can be seen that Alibaba’s final decision depends on whether your evidence is sufficient.

Only when you have sufficient evidence, Alibaba will make a decision that is beneficial to you. Otherwise, your request may be rejected.

In order to ensure that you have sufficient evidence to support your opinion in the event of a dispute, the following are the things you must pay attention to when signing a Trade Assurance order with a supplier.

When you enter the Trade Assurance checkout, you need to specify the delivery date and confirm whether the order meets the “quality requirements agreed in the purchase contract”.

After the order is confirmed, the supplier should upload the contract, which is still on the Alibaba website, which stipulates the quality requirements set for the order.

his is where things get a little complicated. If you fail to specify a clear quality requirement correctly, you will not be able to request a refund in the future.

For obvious reasons, Alibaba cannot refund, simply because the product does not meet your imagined definition of “high quality”.

How does Alibaba deal with the situation where the quality of technical specifications is not detailed:

“What if the agreed quality requirements are not clear? If your agreed quality requirements are not clear and cannot be quantified and operable, if there is a dispute, we will use the industry standard recommendations of the third-party inspection company as the basis for judgment.” However, as a buyer, you can book a quality check through one of Alibaba’s quality control partners.

Provide clear product specifications and quality requirements

All product details, quality requirements, shipping time, dispute resolution, etc. are clearly specified in the order system and purchase contract.

Because they are official legal documents that can be consulted in the event of a dispute.

And don’t use adjectives to describe your requirements, there is no such thing as “good quality”.

If you ask me, you shouldn’t even use the word “premium” with suppliers, because it can mean different things, depending on who you are asking.

On the contrary, it is important to define product quality in technical terms.

Example: Power Bank

Material: ABS plastic

Appearance color: Pantone 1935 D

Design: As described in the attachment of design_draft_a.pdf

Dimensions: Specify in design_draft_dimensions.pdf

Private label: As described in the attachment of label_b.pdf

Battery: Polymer battery

Output current: 2A

Capacity: 20,000mAh

Meet ROHS (European Union) standards: Yes

Conforms to CE: Yes

1. Product design documents.

If you want your product to be exactly the same as your design, be sure to send the design file to the supplier, not just the product photos.

2. Quality requirements.

Based on the sample quality or third party inspection before shipment, specify how you will determine whether there is a quality problem, and specify important product details below.

• Colour. For example, if you purchase red sport headphones, don’t just say “red”, but use Pantone color 186C or RGB. If you are not satisfied with the color of the product you received, you can easily compare the color with the Pantone color to provide yourself with strong evidence in disputes.
• Size. You need to specify the length, width, and height. E.g. CM: 10*5*2, so suppliers can easily follow these specifications.
• Material: For example, 100% stainless steel, other mixtures are unacceptable. In addition, declare that you will assign a third party inspection for material testing. If it is not clearly stated, you will lack evidence during the dispute.
• Weight (if applicable): for example. 217 grams. You can also specify the acceptable weight range: 215g-219g. Using this as a guide, once the product is found to be 100g, you can file a refund or return dispute.

If you leave a “gap” in the specification, no matter how small or seemingly insignificant, you will face serious quality problems.

If you fail to provide clear specifications, Alibaba will certainly not take action against suppliers.

Instead, they will require QC inspectors to approv arbitrarily based on “general quality standards.” These of course do not cover specific material and component quality requirements.

They also do not include compliance with applicable substance regulations (such as ROHS) and labeling requirements.

3. Quantity.

Especially for small products for daily use, please specify the exact quantity you want for each item. When the quantity is short, you can ask for a refund.

4. Packaging details.

Specify packaging materials, carton size, label requirements, design signs, whether to use pallets, etc.

If the received goods are damaged, you may blame poor packaging, but you still need strong evidence to successfully dispute.

5. Shipment date。

It is not to say that it will be shipped in July, but to specify a date, such as July 5th, 2021. If there is a delay in shipment, you can also specify a solution.

If the supplier finds it difficult to deliver the goods on time, they need to discuss with you a new delivery date and modify it in the trade assurance order system.

However, if you do not confirm the delayed shipment with you (the buyer) in advance, you can raise a dispute.

6. Customized specifications.

If you need customized products, please be sure to specify the customized specifications when ordering remarks or attaching any design and logo files to the supplier.

Note: You must be very specific about the above details so that the supplier can more easily understand your requirements.

Otherwise, once a dispute occurs, it is difficult to prove yourself with these evidences and successfully obtain a refund.

At first glance it may seem like a simple transaction. Now you need to confirm the following before considering placing an order:

1. How should you define product specifications for your products?

2. Is the supplier able to comply with these product specifications and how can it be verified?

3. In your target market, which product standards and regulations apply to your product?

4. Can the supplier ensure compliance? Do they have verifiable past compliance records?

Only after answering these questions can you and the supplier draft a contract, and Alibaba will use this as a reference.

As long as you manage to clearly define your quality requirements using established technical terms and definitions, Trade Assurance will indeed greatly reduce your risk.

Why might Alibaba refuse to refund?

In other words, Alibaba cannot refund under any of the following circumstances:

• You failed to provide clear product specifications
• You did not make an appointment for quality inspection when you placed the order
• The quality problem was discovered after the shipment arrived in your country

Anyone should know that Alibaba cannot offer unconditional refunds just because buyers say so.

Final thoughts

Even though the Trade Assurance can provide a lot of protection for the buyer, it is not 100% safe.

Before trading through trade assurance, you must have a full understanding of it. After all, transactions on Alibaba are usually large in amount.

Combine trade assurance services with other skills to avoid conflicts to the greatest extent when buy from Alibaba. And in this way, even when a dispute arises, you can show sufficient evidence to protect your interests.

I hope you can benefit a lot from my guide.

I will keep it updated. I am Link, the founder of SourcingArts, a leading sourcing and artificial intelligence company in China.

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