Canada Goose faces backlash over “discriminatory” refund policy against Chinese consumers

The Canadian winter clothing brand, Canada Goose, has been embroiled in controversy in China by stating that “all products sold at Canada Goose retail stores in China mainland are strictly non-refundable” in its refund policy.

The news broke out on 30 November, by a local media outlet in Shanghai, after a customer complained that she was unable to ask for a refund for a down jacket she bought in October at the brand’s store in Shanghai International Finance Centre (IFC).

The jacket, which cost the buyer 11,400 RMB ($1,789.8), was soon found to be “roughly produced”, with an extra line sewed onto the brand’s logo, rows of stitches entangled in the interior of the cloth, and a pungent smell in the material. As expected, the customer wished to return what is clearly a defective product and would normally be entitled to a refund or replacement.

According to the complainant, no refund policy had been provided by the staff until after she made the payment. It was then that she was shown a piece of paper entitled Exchange Policy, which includes the controversial clause regarding a refund.

She was told to sign the agreement in order to collect her cloth. Such an overlord manner has understandably been a cause of unpleasant customer experience, while the policy excluding Chinese consumers from its refund service has further fuelled the disappointment. Beyond the consumer expectations and rights towards a refund in general, there is a further insult on the specificity of location for this no-refund policy, plummeting Canada Goose’s brand value within China.

After a month of communication with the company, the problem remains unresolved and turns into an Internet sensation after the media exposure. Canada Goose published a statement on 1 December, describing the allegation as a “rumour”, and explained the meaning of the clause in question as “provided by applicable laws, all purchases sold at its stores in mainland China can be refunded”, adding “the Exchange Policy would not override any legal rights that customers are entitled to”. This statement seeks to deny the consumer’s claim about a lack of ability to refund a product, but this has not stopped the media surge.

Nor has the above statement saved the brand from controversy as public anger continues to pour in, with some believing this is a violation of consumer rights and suggesting seeking legal action. Others view this policy as “discriminating” consumers in mainland China and calling for boycotting the brand, showing the delicate balance between brands and social media voices from consumers, with insights towards the Chinese market vital to ensure continued success for international brands.

The scandal arrived not long after the brand was fined 450,000 RMB ($70,649.2) by the Chinese authority for “false advertising” in September, splashing another stain on the brand’s reputation and deepening the distrust from Chinese consumers.

The Chinese consumers are now more generous with spending in exchange for not only high-quality products but also services, with consumer experience being the main consideration too. Although international brands have traditionally gained the trust of Chinese consumers in these aspects, with the rise of national brands fuelled by the guochao trend, the country’s consumers are showing more confidence and preferences for homegrown options.

While a scandal as such at a global brand would speed up the process of distancing foreign brands themselves from their target audience in China. These global brands will need to show further respect and value to their Chinese customer bases and effectively manage their relationships with them in order to continue to be involved in one of the most lucrative markets worldwide.

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