Sign a written contract before paying a deposit; if a business faces risks, it must stop taking payments, and you have the right to get back any unused balance if it shuts down.

22. Sign a written contract before paying a deposit; if a business faces risks, it must stop taking payments, and you have the right to get back any unused balance if it shuts down.

Cost: No cost involved. The real challenge is insisting on a written contract on the spot — refusing any “pay first, talk later” offers.

In plain terms: Any business that accepts a prepayment from you must sign a written contract with you that clearly outlines how refunds will be handled. If a business runs into serious operational problems, it must stop collecting prepayments. Even if it plans to close or relocate, it must give you advance notice. At that point, you can either demand that it continue providing services or request a refund for any unused balance. Violating these rules results in fines for the business.

Benefit: The regulations require businesses accepting prepayments to sign written contracts that specify refund procedures. If a business faces major operational risks, it must cease taking prepayments. When a business decides to close or move locations, it must inform consumers ahead of time. Consumers have the right to demand continued service delivery or a refund for any unspent balance. Breaching these rules can lead to fines ranging from 1 to 10 times the illegal earnings; if no illegal earnings exist, fines up to 500,000 yuan may apply.

Evidence grade: A

Sources: State Council of China (2024). Consumer Rights Protection Law of China Implementation Regulations (State Council of China Order No. 778, effective on July 1, 2024). <https://www.gov.cn/zhengce/zhengceku/202403/content_6940159.htm> Article 22: "Business operators who provide goods or services by collecting advance payments shall enter into a written contract with consumers to agree on the specific content of the goods or services, the price or fees, and the method of refunding the advance payment. Liability for breach of contract and other matters. ""If an operator fails to provide goods or services as agreed, it shall fulfill the agreement or refund the advance payment according to the requirements of the consumer. ""If the operator encounters major business risks that may affect the operator's normal provision of goods or services in accordance with the contract or trading practices, the operator shall notify consumers in advance... Consumers... have the right to require the operator to continue to perform its obligation to provide goods or services, or to request the refund of the unused balance of the advance payment.";

Notes: These regulations mainly serve as a basis for legal action after the fact — they cannot prevent issues beforehand. If a business actually shuts down, its funds are often no longer accessible. Therefore, it is advisable to follow the advice in this section to limit prepayments to small amounts via “pay-per-use” or short-term plans. In case of problems, you can then rely on these regulations to protect your rights. Article 27 of the same regulations also requires businesses collecting deposits to agree in advance on refund methods, procedures, and timeframes, and they cannot impose unreasonable conditions on refunds.