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Problems with SD card delivery. Scam or legitimate excuse?

Posted: 2014-04-21

Full Question

Recently I had a bad experience with a supplier. I paid for the goods (micro SD, SD cards) but in the end they got my shipment mixed up and I received the wrong goods. I do not know if this is a genuine case of wrong shipment or if it is a scam. I reported this problem immediately to the sales person who handled my contract and she has informed her manager about it. I am very frustrated - when this happened, the manager didn't even bother to call me up. I was informed that the manager did meet up with the freight company (Chinapost) regarding this issue. I really do not understand why it took so long to track the error in shipment, which I believe they should have a record of. Later the case was passed on to a Post-Sales person who is helping me coordinate with Chinapost to trace my missing shipment. For the first 2 weeks, the Post-Sales person responded to my email for status update, but the update was always “still tracking”. After 1 month, they started to ignore my emails to provide an update despite constant follow-ups. I wanted to ask them to re-produce a new batch of goods for me while they continue to trace the missing shipment. If they cannot, then they should refund my money. They seem very reluctant and now do not even respond to me. I would like to seek your advice on how to settle this problem. I am still hoping to do business with them and get the goods if possible. It has been nearly 2 months since I made my last payment of over 3000 dollars.


China’s SD card industry in particular is ripe with scams.

Because the SD industry is so full of scam artists, you would be wise to assume the worst. For example, they may be trying to get you to pay for a new order before the first order problems are sorted. What kind of due diligence did you perform to confirm the seller is legit business selling legit quality products? Did you conduct some QC before the goods were shipped? For your general reference, here are some blog posts about verifying suppliers and managing QC.

Essential sourcing skills: Supplier Verification

Video 1: Finding Suppliers
Video 2: Evaluating Suppliers
Video 4: Project Management and Quality Control

I highly recommend that you structure the payments so that the upfront deposit is as small as you can negotiate and the remaining payments are not made until you or a 3rd party confirm the quality and order counter before the goods are released.

One part of the story doesn’t quite make sense. You say you received the wrong goods and seller implies the logistics company messed it up. If the seller admits the wrong stuff was delivered, it feels pretty clear to me that they are responsible to fix the problem. I’m unclear why you would have to take point in sorting things out with the logistics company. To help get to the bottom of this, I need to see the Purchase Order and agreed Incoterms.

If your Incoterms were something like ExW China, then these logistics headaches would be your responsibility to sort out. If the terms were DDP then the seller is clearly on the hook for delivery. If the terms were FOB or CIF, then we’d need to take a closer look at where in the supply chain things have gotten off track to determine who is responsible.

If you don’t have a signed agreement stating the Incoterms…then you may have a difficult time getting your money back unless the seller is a legit business and you have future orders to leverage.

BTW, you said you received the wrong goods. What showed up? If it was something radically different from what you ordered, then your case could be strong if the seller shipped something that was not fit for function.

For the sake of exploring the options, let’s assume that the seller is not a scam artist and let’s assume that you wish to do business with them on a future order. 3000 USD is a lot of money so it’s reasonable that you are upset the seller is ignoring you. If I was you, I would send them a diplomatic demand letter in Chinese from a Chinese law firm to let the seller know you are not forgetting about the 3000 USD and that they are responsible to fix things under Chinese law. But the demand letter needs some “sugar” too. Explain that if the seller sorts the problem out, you have future orders for them. I like to call this strategy the fist in the velvet glove. I can make some introductions to lawyers I have used in China if you like.

Here are some related resources for your reference:

Video 8: Avoiding Scams
Video 9: Returning Defective Products
Video 10: Resolving a Dispute

Let me know how things work out for you.

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