Alibaba Trade Assurance: How to Protect Yourself from Scams
February 22nd, 2021
Are you unsure if the platform of Alibaba provides the product sourcing security you are looking for”Alibaba trade Assurance”?
If so, shed all your worries by getting Alibaba Trade Assurance. This way, not only does Alibaba check the suppliers who do business through it but also offers them a chance to prove their reliability by signing up for Alibaba Trade Assurance.
It has shown itself to be an effective solution to the problem of online fraud. Buyers can get a refund if their order is not fulfilled according to the terms of the contract, while sellers can attract more traffic to their stores. Simply put, there is something in it for both parties.
Still not convinced? This article will surely persuade you to give Alibaba Trade Assurance a try. We will be discussing all the important aspects of this service: its fee, coverage, ease of use, and much more! You will also learn about the things you will require to win an order dispute. So, let’s get started.
Online marketplaces can be a tough platform to run a business. The internet offers many an opportunity to swindle innocent buyers out of their hard-earned money.
After all, it is difficult to ascertain the reliability of someone that you interact with only across the web’s wall of anonymity. It is but natural that popular online trade platforms have devised methods to secure the payments of the buyers using them.
Alibaba Trade Assurance is Alibaba’s solution to the prevalent plague of online fraud. It is a payment protection service that makes sure that there exist an air of trust between the seller and the customer.
1. An Effective Payment Protection Solution on Alibaba
In the beginning, Alibaba, like all other online e-commerce sites, struggled with issues including false seller identities, fake retailers, miss-advertised products, and what not! However, contrary to popular misconceptions, those days are pretty much long gone.
“Why?” you ask? Alibaba invested a lot in setting up and starting its Alibaba Trade Assurance in 2015, which proved very successful in reining in nearly all the defrauders.
It enabled both the buyers and the suppliers to go about their trade without the fear of being bamboozled by some malefactor. Furthermore, this sense of safety encouraged new businesses to sprout up and flourish on the platform.
2. When Will Alibaba Trade Assurance Cover You?
If you are someone who learned about Alibaba Trade Assurance just recently, we should probably tell you that you will not always be covered by it.
This is not a bad thing, of course. It just means that you will have to abide by certain strict policies to avail of its protection.
Setting aside the tedious details, all you need to know is that you will be covered if your situation falls in one or both of the following categories.
-The Shipment Arrived Too Late.
Many buyers stipulate the due date of the delivery of their goods in the contract they make with the seller. This is a good way to guarantee the timely arrival of your shipment.
However, if, due to whatever reason, the shipment arrives late, this term of the contract gets breached. Alibaba Trade Assurance will help you get compensation in this case.
-The Product Was Not According to Your Specifications.
If the purchase contract has the specific features and standards of the goods listed in it clearly, meeting those standards would be mandatory for the seller. In case he or she fails to do so, Alibaba Trade Assurance might be your best way to get a refund.
-How Much Will Alibaba Trade Assurance Cover
If it is warranted, Alibaba Trade Assurance will help you get a 100% refund from the seller. However, there is one condition to this: The Trade Assurance Limit of that seller must allow for it.
Trade Assurance Limit is essentially the maximum sum the seller can pay in refunds. If you open and win a dispute, the refund you receive will not exceed that limit.
For example, if your order goods worth $20,000 from a supplier with a Trade Assurance limit of $10,000, you will be able to collect only half of the amount you paid.
Chapter 2: The benefits of using Alibaba Trade Assurance
Alibaba Trade Assurance has gained popularity among the users of Alibaba as a convenient and dependable means of securing payments. This service is neither too seller-oriented nor extremely buyer-focused, rather it requires solid proof of misconduct before any action is taken.
This fact establishes its neutral and just stance in any dispute. Therefore, Alibaba Trade Assurance can prove to be advantageous for all parties involved in a purchase.
1. Benefits for Buyers
-Ensuring Product Quality
Since sellers are liable to pay refunds if the product does not meet the standards that have been agreed upon beforehand, they take quality management extra seriously. You get exactly what you paid for and do not end up with faulty or sub-par items that cannot be used or resold.
Perhaps the biggest pro of Alibaba Trade Assurance in the eyes of every buyer is the security it adds to the payment process. While paying for your products, you will not experience the anxiety of possibly getting ripped off. You know that in the event of any sharp practice, you can get your money back.
Getting things delivered as soon as possible is every buyer’s wish. For people who plan to resell the goods they source from Alibaba, strict adherence to the schedule is all the more important lest they should run out of stock. With Alibaba Trade Assurance backing potential refund demands, the supplier knows better than to miss your due date.
If the seller offers Alibaba Trade Assurance on his or her products, the need to independently check them is greatly reduced. At most, you will have to compare the bill with the seller’s Trade Assurance limit prior to placing the order, and that is it!
2. Benefits for Sellers
-Improved Business Relations
The seller-customer relationship is very important, so much so that initial interactions can create or destroy the prospect of larger future collaborations. Business relationships are built on trust. Alibaba Trade Assurance is always a good idea for sellers who want to establish such relations with their customers.
On online e-commerce websites, trustworthy sellers are what every buyer is looking for. They prefer goods with guaranteed quality to the ones with cheaper price tags. This all is understandable, especially if you are purchasing expensive or fragile items.
If a seller has Alibaba Trade Assurance to provide this sort of guarantee, his or her sales graphs are bound to experience a rise.
Having Alibaba Trade Assurance can be a strong persuasive tool on the negotiation table. Since it shows the credibility of your company, the buyer might lean toward your demands and make an agreement that suits all of your interests as well.
Thus, this service can greatly influence your customer’s decision of doing business with you.
-Higher Prices of Goods
If the goods are protected by Alibaba Trade Assurance, the buyers might not mind even if their price is a bit high. They will consider it fair and justified because it is still better than potentially getting scammed. This way, you can increase your profit margin quite significantly.
Chapter 3: The charges of using Alibaba Trade Assurance
1. Basic Fee of Signing Up for Alibaba Trade Assurance
Other online marketplaces might charge you some extra money for getting a payment protection service, but Alibaba lets you have Alibaba Trade Assurance for free. There is no fee for the service itself. This is probably a step to make it as accessible as possible and to promote business on this platform.
Whatever the objectives of implementing it, this no-charges policy has definitely encouraged sellers to sign up for Alibaba Trade Assurance, benefitting not only their own company but also the customers.
2. Additional Costs for Processing the Transaction
Alibaba does charge you a transaction fee when you pay through Alibaba Trade Assurance. This sum is used to offset the expenses of processing the payment. How much you will need to pay depends on the payment method you choose. The fees for some of the common methods are as follows.
-Alibaba Pay Later: It is free for US buyers only.
-Credit Card: It costs 2.95% of the price of the order.
-Western Union: It can cost anywhere between US$4.9 and US$45.
-Wire Transfer: It costs between US$30 and US$50.
Chapter 4: How does Alibaba Trade Assurance work?
When a “direct” transaction takes place between a seller and a buyer, the money is transferred from the bank account of the latter to that of the former. There are no middlemen who regulate the flow of money.
If buyers ask for a refund, they are practically at the mercy of the seller who may or may not oblige them. There is no third party to play the role of a neutral arbiter, thus the situation becomes extremely frustrating.
On Alibaba, Alibaba Trade Assurance is the “middleman” whom you can approach if you feel that the purchase contract has been violated. This service ensures that a fair judgment is passed and the appropriate compensation is paid.
1. Alibaba Trade Assurance Acts as an Intermediary
Alibaba Trade Assurance allows you to transfer money safely. The way it does so is, in fact, a bit complex. We will try to simplify it so that you can have at least a general understanding of it.
When you pay for your goods by using this service, the money does not immediately reach the seller: It goes to Alibaba’s bank account with Citibank Singapore Limited. Alibaba then waits for the seller to deliver the goods, which might also undergo quality inspections.
If no dispute is opened during this process, the sum is transferred from Alibaba’s account to that of the seller. However, if a dispute is started and Alibaba deems the refund request warranted, the money will be transferred back to the buyer.
2. Ordering Through Alibaba Trade Assurance
For those who are new to Alibaba, we believe that a step-by-step guide would be necessary to fully grasp how they can place an order through Alibaba Trade Assurance. So, here you go.
-Find a seller who offers Alibaba Trade Assurance on the desired products.
-Check the seller’s Trade Assurance Limit and see how much of the payment it can cover.
-Negotiate the order specifications and price with your seller.
-Decide whether or not you want a quality inspection and what sort of coverage you will have.
-Draft a contract yourself or ask the seller to do it.
-If both of the parties agree to the terms of the contract, confirm it and continue.
–Make the initial payment through Alibaba Trade Assurance. Once it is processed, the status of your order will change to “Waiting for supplier to ship order”.
-Confirm the seller’s shipping documents. After this, the status becomes “Order complete”.
3. The Order Specifications You Should Include
We mentioned earlier that Alibaba Trade Assurance will help you get a refund if the shipped goods did not conform to the specifications you gave.
But what exactly are these “specifications”? If you ordered a “red” scarf but a “dark red” or “crimson” one was delivered to you, does it count as a violation of the purchase contract? Similarly, what does “good quality” mean?
The thing is that these vague and non-specific terms cannot be used in the binding clauses of a contract. Hence, the seller nearly always loses a dispute if he or she has used such ambiguous terms to specify the product requirements.
Whenever you buy something on Alibaba and want to enjoy the full protection of Alibaba Trade Assurance, you should try to be as specific as possible when placing the order. For example, instead of writing “red” or “crimson”, state the color code to specify your scarf.
While ordering, it would be best if you include the following specifications regarding the purchase.
-Design of the Product
If the sellers offer the product in several forms, clearly inform them which one you want. If you have designed the product yourself, the safest option would be to send them a design file containing all the necessary information.
By quality standards, we refer to the objective measures of the quality of the goods. Subjective remarks like “good” or “well-made” will simply not do in a formal business setting. We advise you to define the quality requirements in terms of the following if possible.
1. Color and Shade: Use Pantone color codes when you tell the seller which color you want. If you open a dispute based on the color being wrong, you can offer evidence by comparing the product’s shade with the ones on a Pantone color chart.
2. Material: Try to state it in percentage composition or other numerical figures. For example, saying 0.60% carbon-content steel rod or 100% cotton shirt is a precise way to let the seller know your requirements.
3. Size: Specify it by telling the supplier the dimensions and volume of the goods ordered by you. For example, an order of barrels might include their height, diameter, and volume.
4. Weight: State this in grams, pounds, or any other unit of mass you find convenient, but make sure that the unit is in common use and easy for the seller to understand.
-Quantity of the Goods
There are many ways you can go about specifying the quantity of the goods. For small items like toys and utensils, numbers are used, e.g., 100 knives and 250 fidget spinners. If you order materials (both solid and liquid) in bulk, mass is generally used, e.g., 10kg steel and 25kg oil. Volume is used for liquids only, e.g., 30L of sunflower oil.
-Packaging and Branding
This includes the details of how the goods are to be packed before shipping. The size of the carton, the grade of its constituent cardboard, color, etc. all must be stated. You can freely use, avoid completely, or just minimize the use of plastic.
If you want some branding on the packages, you should also send the relevant logos and labels to the supplier.
These range from simple requirements like meeting a deadline to preferences such as choosing the mode of shipping: air, sea, train, or express.
-Details of Customization
If you have bought an existing product at the seller’s store but require him or her to make a few custom changes to it, there is a need to unambiguously convey your ideas regarding the alteration. Do not forget to write them down in the contract too.
4. Options for Product Inspection
Having the goods checked by a certified quality inspector is essential if you want to open a dispute on the basis of poor quality. Since quality inspections conducted by the seller and the buyer always remain under the suspicion of being biased, hiring a third party to do it is the simplest way to do away with all doubt and objections.
You can get Alibaba Inspection Service along with Alibaba Trade Assurance, or use an independent service such as Asia Inspection, Intertek, and SGS.
-Quality Inspection during Production
By doing the inspection before delivering the products, you can greatly cut down on the time required to get a refund if any fault is found in the goods. Otherwise, you will have to wait for them to be shipped, check them yourself, and sometimes send them back for a confirmatory inspection.
-Quality Inspection before Loading in Containers
This way you can check not only if the goods were manufactured properly but also if they were safely packaged. Poor packaging, which is often not initially apparent, is unable to protect the product inside it during the lengthy shipping process.
Chapter 5: Payment methods on the Alibaba Trade Assurance Platform
Alibaba is an e-commerce giant among online market places. People from a variety of countries visit it in hopes of starting a retail company or just buying things for personal use.
To accommodate such a wide demographic, Alibaba lets its users pay through several methods. If you want your payment to be secured by Alibaba Trade Assurance, the list of payment methods does become shorter, but it still offers some freedom for you to choose. One thing to remember is to send the money to the virtual Citibank account and not the supplier’s own account.
1. Online bank Payment
-It is available for US (in USD) and some French and German (in EUR) accounts.
-The limit of payment is $50,000 for US accounts and $10,000 for all others.
– The transaction fee ranges between $15 and $30 per transaction.
– The processing takes around 4-5 business days.
-It is available solely for US citizens, thus supporting payment in USD only.
– This method is recommended by Alibaba.
– The transaction rates are non-varying.
3. Credit Card
-It is available only for holders of Visa or MasterCard credit/debit cards.
– You can apply for chargeback but the probability of you getting your credit back is only 3%.
– The transaction fee is 2.95% of the transacted amount.
Your payment cannot exceed $12,000.
The processing takes about 1-2 hours to be completed.
4. Pay Later
For people who are short on capital and plan to earn more of it by reselling the goods they buy from Alibaba, Pay Later is a great option. It is a service that lets you take a small loan from a financial partner of Alibaba and then pay for your order.
-This is handled mostly by Kabbage, a Georgian finance-tech company in Atlanta.
– It supports payments in USD only.
– Once you agree to the loan contract, the processing takes 1-3 business days.
5. Wire or Telegraphic Transfer (T/T)
– Due to its convenience, it is the most commonly used payment method.
– Most banks require you to pay a fee of $20-$50.
– It supports many currencies: AUD, CAD, EUR, GBP, HKD, JPY, RMB, SGD, and USD.
There is no transaction limit.
The processing takes 3-7 business days.
6. Western Union
– It is available only for US buyers and the supported currency is USD.
-The transacted amount cannot be greater than $2,500.
– The transaction is usually processed in a single day.
– This method is available for Brazilian buyers only, but the supported currency is USD.
– The fee is 1.35% of the total payment.
– The monthly transaction limit is $5,000.
Chapter 6: Opening a dispute on orders with Alibaba Trade Assurance
If you believe that the terms of your purchase contract have been breached, approach your seller directly before anything else. Most people make honest mistakes and quickly realize it once you point it out. Such sellers will be happy to comply with your demands. If not, you will need to open an official dispute.
1. Grounds for Opening a Dispute
As stated before, Alibaba Trade Assurance covers you in two kinds of situations: poor quality and late delivery. We have also described the technical limits of both these cases. You cannot open a dispute just because you “did not like” the goods or they “did not meet your expectations”.
These unclear and trivial reasons do not make sound grounds for getting a refund. Moreover, vague order specifications and the failure to conduct an authentic quality inspection weaken your refund claim.
2. How Soon Should You Open a Dispute?
After you have purchased the merchandise, there is an applicable claim period during which you can ask for a refund if you have the evidence to support your stance. The policies of Alibaba Trade Assurance regarding this period have been summarized for you below.
-If you have confirmed the order receipt yourself, the claim period is 30 days.
– If you have not confirmed it, Alibaba will automatically do it for you. Then the claim period will depend on your shipping method. For express, it is 15 days; for air freight, 30 days; and for sea transport, land shipping, and post, it is 60 days.
3. Applying for a Refund
If you have decided to proceed with your refund claims, you will need to take the following steps to open a dispute and get your money back.
– Open the “Orders List Page”.
– Click on “Open a Dispute”.
–Select “Apply for Refund”.
Fill out the Dispute Form that has been provided to you.
Upload the required documents as stated on the form.
Submit the refund application.
The supplier will be given five days to respond to the claim. If they do not give a response or the response is unsatisfactory, you can escalate the issue and get the Alibaba Dispute Team involved.
Once the seller has made his or her stand, the arbiters with Alibaba Trade Assurance will analyze the situation. They reserve the right to make the final judgment which both parties will need to adhere to.
Chapter 7: Things you will need when you open a dispute through Alibaba Trade Assurance
Fighting a dispute through Alibaba trade Assurance takes a lot of planning and preparation. You have to get things ready before Alibaba demands you to show them as proof. We have made a list of the records you need to solidify your stance.
1. Relevant Documents
In order to learn the details of your purchase, Alibaba will require you to submit the following documents.
– A signed copy of the purchase order (PO) or invoice.
– The documents containing the order specifications that were agreed upon.
–The documents containing design drawings or the digital design files.
A copy of all communication with the seller, including texts, voice messages, videos, and images.
A signed copy of the receipt of the transaction.
If you have any other documents that might justify your claim, feel free to send their copies to Alibaba Trade Assurance as well.
2. Solid Evidence
Your claim that the seller failed to uphold his or her end of the deal must be backed up by sufficient proof. This proof can be in any shape or form; however, the following evidence is considered the most authentic and convincing.
-A copy of the quality inspection report.
-The photos or videos of the defective goods.
– A comparison between the set specifications and a sample of the actual product.
Many other pieces of evidence can also be presented before the Dispute Team, but it is up to you to ascertain their relevance and benefit to your case before you submit it.
Chapter 8: Types of coverage offered by Alibaba Trade Assurance
Alibaba Trade Assurance lets you choose between two kinds of coverage, depending on which portions of the payment will be considered refundable. These two are as follows.
1. Pre-Delivery Coverage
If the payment is divided into parts and some of it needs to be paid before delivery, you can opt for a pre-delivery coverage and inspection. It basically means that your down payment will be protected. If the inspection reveals a fault of the seller, this initial or advance portion of the payment will be refunded.
2. Post-Delivery Coverage
This sort of coverage allows you to protect all parts of the payment. The whole sum is covered to the extent allowed by the seller’s Trade Assurance Limit.
Whether the payment has a portion that needs to be paid in advance or it is to be transacted entirely after the delivery of the goods, post-shipping coverage remains applicable.
Chapter 9: Ways to maximize your chances of getting a refund
Bear in mind that you should take precautions before purchase so that things do not reach the worst-case scenario of a dispute. Approach a Gold or Verified seller on Alibaba so that things and check their Alibaba Trade Assurance status as well. The following advice will help you win a dispute and get back your money.
1. Order from a Supplier with a High Alibaba Trade Assurance Limit.
The greater the trade Assurance limit of the seller’s account, the more of your money you can get refunded. It is as simple as that! That is why it is one of the first things you should check when deciding on a seller to buy your stock from. It would be foolish to order goods worth thousands of dollars from a seller with a limit of a few hundred bucks.
2. State the Specifications for the Order Clearly
You should make sure to keep a record of the specifications you ask the seller to consider while fulfilling the order. The best way to do this is to stipulate them as terms in the purchase contract. The seller would then be bound to abide by those terms.
3. Book a Pre-Shipping Quality Inspection
We recommend pre-shipping inspections over post-shipping ones. Not only are the inspection services in Asia much cheaper than the ones in the US or Europe, but you will also save yourself the trouble of receiving the package and then shipping the faulty goods back. A post-delivery check can end up being too much of a hassle!
4. Approach the Dispute Team if the Supplier Is Not Replying
Many suppliers might admit their mistakes rather quickly, but some stubborn or fraudulent groups can prove to be an annoying bunch to deal with. Do not bother yourself with them too much and promptly inform the Alibaba Dispute Team about them.
The professionals know how to handle such miscreants, and they will ensure a fair judgment is made between the two parties.
Chapter 10: Frequently asked questions about Alibaba Trade Assurance
1. Why is my registration not successful?
Your request to get registered for Alibaba Trade Assurance can be declined for any one of several reasons. Trademark issues, patent conflicts, and the inability to prove the legitimacy of your business are among the most common ones.
Make sure that you have entered the correct company name and address. If you are still having trouble signing up, contact a representative of Alibaba, modify the form, and submit it again.
2. Is PayPal an option if I want to use Alibaba Trade Assurance?
PayPal is one of the most secure payment methods out there. Online marketplaces can be dangerous sites with a lot of sketchy people attempting money grabs. PayPal makes it possible for you to protect your business from harm and loss.
Although it is a payment option on Alibaba in general, it cannot be used if you are paying through Alibaba Trade Assurance. Since Alibaba Trade Assurance works similar to PayPal, there is little cause for worry.
If you are still unsure and have safety concerns, you can always ask the seller for samples and proof of their trustworthiness.
3. Is there any need to check the supplier status?
Checking the status of your supplier can never hurt. Suppliers with a Verified or Gold status are definitely more trustworthy than average ones. This status is provided by a third-party evaluation company, so we consider Alibaba Trade Assurance a more authentic symbol of reliability than such statuses.
4.What are some other things I can do to avoid scams?
There are many things that you can do to save yourself from being ripped off. The first and foremost is checking the supplier’s profile and customer reviews if available. Verify the address of their company and ask them to send you samples of the product to be purchased.
Another highly effective way would be to work with someone recommended by a trusted partner or with whom you have had a good prior experience. Still, remember that in the world of business, you have to bring all your wits and intuition to the table.
5. What should I do if the payment option is not working?
This is a common problem when people new to e-commerce make a purchase online. Alibaba Trade Assurance allows only Visa and MasterCard transactions and you might be using some other credit card type.
E-commerce services may not have been activated for your card or the card could simply have passed its expiration date. Insufficient credit and a reached payment limit are also a possibility.
Many people mistakenly type in incorrect information or their cards get declined due to security concerns. If the situation remains unsolved, contact your bank and Alibaba customer support.
6. Is Alibaba Trade Assurance trustworthy?
Alibaba Trade Assurance is probably the most reliable way to pay for stuff on Alibaba. It guarantees to assist you in the event of attempted fraud or malefaction. To business novices and seasoned entrepreneurs alike, we recommend buying from sellers that offer this service over purchasing cheaper goods from a potential scammer.
7. Can I return goods that have no defects?
You cannot get a refund if you are just “not satisfied” with the product. “Satisfactoriness” is too subjective a criterion to judge an item by. You must point out clear and objective faults if you want a refund on the products that have been delivered to you. Deviation from the agreed-upon length, material, weight, color, etc. are solid grounds for a refund claim.
So, if the goods have no discernible flaws and damage, Alibaba Trade Assurance will not help you get your money back.
Alibaba is an excellent business platform for people who are short on investment and want to give Chinese goods a try. Starting their business here and then extending it into new marketplaces would be a good strategy.
During these initial stages, an effective means of payment protection is crucial and Alibaba Trade Assurance gives you just that! So, wait no longer and start trading safely on Alibaba!