A Study on Protection the Right of the Participant to Return the Goods as He/She Decides to Withdraw from the Multi-level Sales Enterprise for There is Necessity to Subject them to the Regulatory Supervision of the Fair Trade Law

Abstract

Article 23-1 of the Fair Trade Law states that within a period of thirty days after rescission of the agreement takes effect, the multi-level sales enterprise shall accept the application from the participant for returning of goods, collect or accept goods returned by the participant, and return to the participant all the payment for goods made upon purchase and any other fees paid upon participation, accumulated until the time of rescission. In returning the payments made by the participant according to the preceding paragraph, the multi-level sales enterprise may deduct upon the time of returning of the goods the value decreased due to the damage or loss attributable to the participant, and any bonus or remuneration already paid to the participant for purchase of such goods. If the returned goods as referred to in the preceding paragraph are collected by the enterprise, the enterprise may deduct the shipping costs required for such collection.

Article 23-2 states that within thirty days from the termination of the agreement, the multi-level sales enterprise shall buy back all goods possessed by the participant at ninety percent (90%) of the original purchase price; provided that it may be deducted the bonuses or remuneration paid to the participant for the purchase as well as the amount of the decreased value of the goods.

The purpose of these two statements is to protect the right of the participant to return the goods once he/she decides to withdraw from the multi-level sales enterprise. However, they cause some problems to the multi-level sales enterprise. The handling of the returned goods is one problem. The recollection of the bonuses already paid out to the participants related with the returned goods is another problem. Moreover, some hostile people may use this regulation to damage the enterprise.

How to find out the ways to protect the participant and don't cause too much trouble to the multi-level sales enterprise at the same time is the major purpose of this research. We discuss the problem from the philosophy of the Civil Law and explore the practical operation problems of the multi-level sales enterprise. The results of our study suggest that current regulations are all right with the participant as well as the multi-level sales enterprise. The problem of the hostile people using the regulation to return a large amount of goods and claim the refund could be solved by setting up a tracing scheme for the participant's ordering amount and selling amount. If every multi-level sales enterprise has a sound management practice, no serious problem related with the regulations could happen.