Heavy Blow to Sellers: Temu's Crackdown on False Transactions with a Fine of 200 Yuan per Order

Release time:2023-08-12 11:07

Heavy Blow to Sellers: Temu's Crackdown on False Transactions with a Fine of 200 Yuan per Order

False transactions are a common form of seller misconduct in the e-commerce arena, including practices such as "credit manipulation," "boosting reviews," "boosting reputation," and "boosting credit."

Since its launch in the US market in September of last year, Temu has expanded to 27 countries and regions globally, becoming a significant sales channel for cross-border sellers. Following several revisions, Temu now features rankings, reviews, and store ratings similar to domestic e-commerce platforms like Pinduoduo, Taobao, and JD.com. However, with the rapid growth in the number of sellers and products, some sellers have engaged in prohibited activities such as fake orders, credit manipulation, and subsidy manipulation to enhance store data, thereby affecting fair competition and undermining the platform's ecosystem.

Temu has not turned a blind eye to these issues. Recently, the platform introduced the "False Transaction Handling Rules" as part of its efforts to combat fraudulent transactions and maintain a normal operational order on the platform. According to the new rules, sellers engaging in false transactions will be charged a penalty of 200 yuan per order, calculated based on the number of fraudulent transaction orders already generated, to be paid as compensation.


Penalty Multiplied Tenfold for Subsidy Manipulation

According to the newly defined rules, false transactions refer to instances where sellers evade platform rules, exploit rule loopholes or system vulnerabilities, manipulate subsidies, obtain unjust benefits through fake product sales, reviews, or credit evaluations, or maliciously harm other sellers or any third-party legitimate interests. This includes but is not limited to actions undertaken by individuals, those acting on behalf of others, or those assisting others, who fall under the category of "stakeholders," including:

Individuals who establish or manage stores (including affiliated stores), legal representatives of enterprises, shareholders, directors, supervisors, managers, and employees.

Relatives of the individuals mentioned above.

Individuals with a vested interest in the stakeholders (such as those in cooperative partnerships, joint ventures, shareholding, consultancy, agency, employment, creditor-debtor relationships, etc.).

Other affiliated parties of the store.

It is reported that Temu will employ technological means to scrutinize and monitor seller store information, transaction behavior, transaction data, and related information, and then make determinations based on the relationships among user data, ordinary consumer spending habits, courier industry transaction norms, general knowledge, and other factors. If any irregularities in seller transaction behavior or transaction data are detected, Temu reserves the right to question the seller and request a reasonable explanation. Sellers are required to provide explanations of transaction anomalies within the specified period.

In cases of false transactions, Temu will take measures against sellers based on the severity of the situation. These measures include but are not limited to partially or completely delisting products, prohibition of sales, deletions, censorship, reduction of privileges, removal from prime resource spots, restriction from gaining resource spots, removal of advertisements, prohibition of adding new products, prohibition of listing products, restricting some or all functions and permissions of the store, restricting the withdrawal of part or all of the seller's account funds (including but not limited to the payment for goods, deposits, and reserved amounts), deduction of part or all of the deposit/reserved amount, and deduction of compensation money from the seller's account based on the number of fraudulent transaction orders at a rate of 200 yuan per order. For sellers whose account funds are settled in US dollars (as recorded by the platform's system), the aforementioned 200 yuan per order will be adjusted to 25 US dollars per order for the calculation of compensation for false transactions.

Furthermore, if sellers manipulate platform subsidies alongside fraudulent transactions, Temu will deduct an amount from the seller's account equal to ten times the manipulated subsidy amount as compensation. It is understood that Temu previously introduced a subsidy policy for consumers, whereby if the price of a product decreases after purchase, the price difference would be subsidized to the consumer.

A veteran seller has indicated that Amazon sellers had previously formed groups to establish new stores on the platform, uploaded a large number of low-priced products, and then used their own registered buyer accounts to make purchases. It's not ruled out that Temu sellers might engage in similar operations to deceive the platform for subsidies.


Non-Compliance with EPR Regulations Will Result in Delisting

In addition to the "False Transaction Handling Rules," Temu has also implemented restrictions on EPR compliance for products related to Germany and France (which currently includes the Packaging Act and the French Textiles Act). Sellers must complete the declaration by July, and non-compliant products will be delisted.

Extended Producer Responsibility (EPR) is an EU environmental policy requirement based on the principle of "polluter pays." It mandates that producers are responsible for reducing the environmental impact of their products throughout the entire lifecycle, from production and design to waste management and disposal.

Temu sellers need to understand the classification of their products and determine which EPR product categories require registration. Different product categories require registration and declaration with different Producer Responsibility Organizations (PROs). For example, products with batteries sold to Germany might require registration numbers for both electrical and electronic equipment and batteries. Additionally, nearly all products fall under packaging regulations, so sellers must judge whether other EPR categories are applicable based on the types of products they sell.

Some Temu sellers have mentioned that EPR registration is free, but sellers should be cautious to avoid being exploited during the registration process. For electrical and electronic equipment products, sellers need to be mindful of the German WEEE certification, which may involve certain fees. It is recommended to engage professional service providers for handling this.

However, the cost of the German WEEE has increased significantly, including new account management fees of 24.1 euros per quarter excluding taxes. If a seller has registered for WEEE or already possesses a valid WEEE number, the account holder must pay the management fee to the official agency EAR until the registration number is canceled. This fee was not in place in 2022 and will be enforced starting in 2023.

Therefore, Temu sellers need to keep a close eye on platform policy adjustments. Whether on Amazon or Temu, compliance costs are expected to gradually increase. What are your thoughts on Temu's recent platform policies? Feel free to share your opinions in the comments section.