In 2021 Pinduoduo introduced refund-only: a dissatisfied buyer gets money back and keeps the goods — no return, no negotiation. It was the sharpest weapon in its price war against Taobao and JD, trust without friction. Rivals copied it until refund-only was standard across Chinese e-commerce, and on Temu overseas it became blanket 90-day refunds without returns, backed by fines of up to five times the declared product price.
The rule bred an industry of abuse. One merchant counted over ¥200,000 in malicious refunds since 2021 and drove 5,000 kilometers trying to recover ¥1,000 of goods; another took a 9-hour train ride over a ¥9.9 refund. Some sellers lost 10% of revenue, and apparel prices carried a 10–15% premium just to absorb the hits. The anger peaked on July 29, 2024, when hundreds of Temu merchants besieged Pinduoduo's Guangzhou headquarters over ¥139 million of fines and frozen reserves; Pinduoduo replied that it 'does not profit from fines.'
The reversal cascaded: Kuaishou abolished refund-only on December 2, 2024, and 1688 followed in March 2025, replacing it with platform-paid subsidies for credit-worthy buyers. On April 22, 2025, Taobao, Pinduoduo, JD and Douyin simultaneously published rules stating platforms would 'not intervene unless necessary' in refund-only claims on received goods — JD effective April 30, Taobao from July. Regulators sealed it: on August 22, 2025 the market regulator told platforms to fully cancel refund-only. Four years after the rule became a weapon, the industry disarmed.
Abolished refund-only across platforms in 2025, replacing it with platform-paid subsidies for credit-worthy buyers, after merchants revolted over ¥139 million in fines.
Refund-only was a user-acquisition weapon: Pinduoduo invented it, every rival copied it — until the cost of that trust landed on merchants as fines, frozen reserves and abuse rings.
Merchants priced it in with 10–15% markups and lost up to 10% of revenue to abuse; the July 2024 siege over ¥139 million of withheld money showed the bill had arrived.
When regulators name a rule unreasonable, its inventor doesn't argue — five platforms abolished it within months and Pinduoduo now promises to 'not intervene unless necessary.'
A rule that buys users by taxing merchants has an expiry date. Pinduoduo's refund-only spread across e-commerce, then broke its own merchant base — in April 2025 every platform abolished it at once.
Refund-only survives only in its exceptions — goods never shipped, lost, or severely defective, with evidence required. Xianyu ended default consent in October 2025, and new platform-rule oversight measures prohibit forcing refund-only on merchants. Platforms repositioned as rule-makers: 1688 pays out of pocket to refund credit-worthy buyers itself. For merchants the arithmetic flipped — apparel sellers can drop the 10–15% premium they had baked into prices to cover the policy.
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