Complete Guide: How to Use Alibaba Trade Assurance?

how to use alibaba trade assurance

If you know Alibaba, you must have heard of Trade Assurance, and everyone is telling you that trading through Alibaba Trade Assurance is safe for you.

So what is Alibaba Trade Assurance? How does it work? And how does it protect your rights?

After reading this guide, I believe you will better understand using Alibaba Trade Assurance. Click the following links to learn about the relevant information.

What is Alibaba Trade Assurance?

Trade Assurance is a free service provided by Alibaba, and it acts as an intermediate guarantor. Alibaba Trade Assurance aimed to help build trust between buyers and suppliers.

Buyers can get payment protection if the supplier breaches the timely delivery or the product quality terms in your contract.

Specifically, it protects the following situations:

  • Delivery delay, which exceeds the specified delivery date.
  • Manufactured items do not meet the specified quality requirements.

Suppose there is a problem with an order covered by Trade Assurance. In that case, Alibaba will help you reach a satisfactory outcome which means reimbursing some or all of your costs or gaining some other agreement between you and the supplier.

Keep in mind that Alibaba Trade Assurance protection only kicks in if there is a discrepancy between the shipping date or the quality of the order and your supplier’s contract, making it especially important to double-check the details of your contracts and orders before making transactions.


What is Alibaba Trade Assurance Limit?

Alibaba Trade assurance Limit is granted by Alibaba based on the supplier’s trading history, business reputation, etc. It is the maximum amount that a supplier can use on all orders.

Alibaba releases funds to suppliers in advance within the limit and takes some financial risks accordingly.

So suppliers can get the money directly and become more flexible in cash flow. For buyers, this means that their payments to suppliers are protected up to the remaining amount of the supplier’s trade assurance limit.

You may have the following concerns:

  • What if the order amount exceeds the supplier’s trade assurance limit?
  • Can I get total compensation if something goes wrong with the order?

As long as you have sufficient evidence to prove the supplier is at fault, in the event of a product quality problem or late delivery date, you will get a full refund, including the amount within and out of the supplier’s assurance limit.


Can I trust Alibaba Trade Assurance? 

Yes! 

Alibaba Trade Assurance is committed to providing secure and efficient trade services for global buyers and sellers. 

Integrating the resources of all parties and providing comprehensive cross-border payment, settlement, financial, and logistics services to help buyers and sellers achieve global trade quickly.

If you place a trade assurance order on Alibaba, but the supplier can not deliver on time or meet the quality standards you set in the contract, you can open a dispute and apply for a refund. 

If it is the supplier’s fault, Alibaba will provide you with a refund of up to 100% of the coverage amount on behalf of the supplier.

In short, Trade Assurance is Alibaba’s protection service for orders, and it provides a secure online environment for global trade between suppliers and buyers.


How Does Alibaba Trade Assurance Protect Buyers?

Buyers and suppliers make orders through Trade assurance, and Alibaba will provide the following supplier assurances to buyers:

1. On-time Delivery

If the supplier does not deliver the goods after the date of contract confirmation, the buyer can apply for a refund from Alibaba.

2. Product quality consistent with the contract

If the product quality does not meet the quality standards specified in the contract, the buyer can apply to Alibaba for a refund.

3. Payment Security

Make sure your payment is secure, and the seller will send you the order.

If the quality of the product or the delivery date does not match the agreement between you and the supplier in Alibaba trade assurance, you can dispute it, and Alibaba will mediate to reach a satisfactory result, including getting your money back.

There is no “refund” or “return” mechanism when sending money directly to the supplier’s bank account. Alibaba bridges this gap by acting as a middleman between the buyer and the seller.


How to Find Alibaba Trade Assurance Suppliers?

The Trade Assurance Program is only available to Alibaba Gold suppliers. Currently, there are a limited number of suppliers offering this service, so be sure to purchase from a supplier with an Alibaba Trade Assurance.

There are several ways to find Alibaba suppliers that offer the trade assurance service:

  1. Select “Trade Assurance” on the filter when searching for products.
  2. Look for the “Trade Assurance” logo on the product list page.
  3. Select the “Order with Trade Assurance” button when buying from a supplier you have already ordered.
  4. Use the Alibaba Information Center and ask the seller if they offer a trade assurance.

Using Alibaba Trade Assurance is just like making any other order on their site. You only need to follow specific steps to help ensure you can make Trade Assurance claims if needed.

Once you’ve identified a supplier that offers Trade Assurance, keep two things in mind:

  1. Communicate with them through the Alibaba Message Center platform to have an official record.
  2. Request a sample to ensure the product meets your specifications before placing a complete order.


Should I Pay for Alibaba Trade Assurance?

No need!

Buyers can get Trade Assurance for free, but you still need to pay a payment processing fee when trading on Alibaba. We will elaborate on this further in the next chapter.


What Payment Methods & Charges of Alibaba Trade Assurance Order?

There are 7 standard payment methods on Alibaba for buyers to choose from while using Trade Assurance:

  • PayPal
  • Credit Card
  • Online Banking Payment
  • Online Transfer
  • Wire Transfer (T/T)
  • Western Union
  • Letter of Credit (L/C)

1. Pay by Paypal

Since April 2021, PayPal has been available as a payment method for Alibaba trade assurance orders. PayPal is widely used as an electronic payment gateway in more than 200 countries.

In addition, this payment method supports the following currencies.

  • U.S. dollars
  • Euro
  • British Pound
  • Canadian dollar
  • Singapore Dollar
  • Australian Dollar
  • Hong Kong Dollar
  • Japanese Yen

Usually, the processing time is 1-2 hours. Buyers have to pay 2.99% of the payment amount for each transaction. The maximum payment amount depends on the card limit bound in the buyer’s PayPal account, up to $12,000.

2. Pay by Credit Card(Visa or Master Card)

It is easy to use a credit card. “add a new card to pay in USD” binds the card to the orders. As with Paypal, if you are not satisfied with the quality of your goods, you can request a return.

  • Visa and MasterCard (credit/debit cards) are supported
  • Transaction fee (2.99% of the payment amount)
  • Payment limit of $12,000 per transaction
  • Payments take 1-2 hours to reach the supplier’s account

3. Pay by online banking payment

It is only available to buyers with the U.S. or some German and French bank accounts. For each transaction, the maximum limit is $50,000 for U.S. accounts and $10,000 for other accounts.

It has much lower fees than credit cards and wire transfers. Thus, it is the best choice for large orders.

  • Low transaction fees ($15-$30 per transaction)
  • Online banking payment is available only for USD and EUR
  • Only 4-5 business days to reach the supplier’s account

4. Pay by online transfers

Based on cooperation with third-party financial institutions such as Trustly, Ideal, Sofort, etc., online transfers can be done anytime you want to pay in local currency. Furthermore, it can be done from any computer with internet access.

Online transfers are only available for European accounts and local currencies such as Euro, Pound, Zloty, and Swiss Franc.

  • Low transaction fees ($15-$25 per transaction)
  • 1-3 business days to reach the supplier’s account

The Payment limit per transaction depends on the financial institution that you choose.

  • Trust/Ideal/Bancontact – no limits
  • Sofort/Giropay/P24/EPS – $10,000
  • PayU – $200,000.

5. Pay by wire transfer (T/T) 

Wire transfer (also known as telegraphic transfer or bank transfer) is the most popular business-to-business payment method. It is very safe and convenient. Transaction fees vary from bank to bank. You must check with your local bank for the details. Generally, banks charge from $15 to $80.

  • No limit to the amount of money per transaction.
  • Available currencies: CNY/USD/HKD/GBP/EUR/USD/AUD/CAD/JPY
  • About 3-7 business days to reach the supplier’s account

6. Pay by Western Union 

With Alibaba Trade Assurance, Western Union only supports U.S. dollar currency and American buyers. The payment limit is also small and can only be used for orders up to $2500.

It takes 1-2 business days to reach the beneficiary’s account. The transaction fee is 4.9-1.8% of the payment amount.

7. Pay by L/C (Letter of Credit) 

L/C is very safe because third-party banks provide guarantees. And it can help you to solve the pressure of cash flow.

Because you don’t need to pay the supplier in advance, your bank will ensure that the supplier receives payment as soon as the goods are shipped or arrive at the destination port.

You should be aware of the high charges of letters of credit. In addition to the fees charged by your bank, Alibaba also requires a fee for document display services – 0.125% of the order amount.The minimum charge is $50, and the maximum is $300. So, letters of credit are more suitable for large orders.


How to Create an Alibaba Trade Assurance Order?

1. If you find an online product on Alibaba

You can click “Start Order” on the product detail page to place your order directly, or click “Contact Supplier” to get more details from the supplier, and then ask the supplier to draft the order.

You may learn more about Alibaba for details below:
Is Alibaba.com Legit? How to Buy from Alibaba?

2. If you want to order customized products directly

You can draft orders by clicking “Trade Assurance Orders” on the home page of the Alibaba website, or go to “Orders”> “All Orders” and click “Trade Assurance Order Draft “.

draft trade assurance order

Then select “Add Product or Add Contract”

draft alibaba trade assurance order

After submitting an order, you can manage your orders on the “order Management page “.


How to Modify Alibaba Trade Assurance Order?

The status of your Alibaba Trade Assurance order determines how you can modify your order. Please refer to the following:

Case 1. For orders that are awaiting confirmation from the supplier, awaiting payment, or awaiting shipment from the supplier.

Please go to “All Orders “, click on “Request Modification “, enter your request and wait for the supplier’s response.

modify trade assurance order
modify alibaba trade assurance order
wait alibaba supplier to deliver

Case 2. For orders where payment is being processed.

The buyer needs to wait for the payment to arrive before modifying the order.

Case 3. For orders awaiting delivery confirmation.

No modifications can be made to the order. However, each party can extend the order acceptance time once for 15 days. So, the total can be extended by 30 days.

alibaba waiting for delivery confirmation 1


How Do I Apply for Alibaba Trade Assurance Refund When There is a Dispute?

Once you have made the initial payment for your order, you can access the “Request a Refund” on Alibaba.

1. If you are waiting for the supplier to confirm that they have shipped your order, contact them through the message center. If the supplier does not schedule the shipment or agrees with you to postpone it, you can request a refund from Alibaba.

2. If the quality of the order is not consistent with your order contract, you can request a refund within 30 days of receiving the order.

Here’s how you can open a dispute online:

Step 1. Go to “Orders”> “All Orders” and find the order, then click “View more” to enter the order details page, and click “Request for a refund” to create the dispute.

Step 2. Fill in the dispute form and upload evidence.

Please make sure to keep the following important documents as evidence to ensure the successful resolution of the dispute.

The Alibaba Dispute Team will investigate and review this evidence and make a final judgment.

  • A copy of the signed purchase contract or invoice (P.O.)
  • Documents related to product specifications
  • Documents related to design drawings or documents
  • Copies of inspection reports
  • Copies of all relevant communication records with suppliers (e.g., text, video, etc.)
  • Copies of signed transaction receipts
  • Pictures or videos of any defective goods

Step 3. Please wait for the supplier’s response or escalate it to the Alibaba Dispute Team.

After you submit a dispute, usually, there are five days for the supplier to respond and discuss a solution. However, if the vendor does not answer, you can escalate them to the Alibaba Dispute Team and let them be involved.

Once you submit a dispute, you and the supplier have 30 days to negotiate without Alibaba’s involvement. It would help if you communicated with the supplier through the message center to have a formal record of the conversation and anything you agree with.

Here is a timeline of what may happen after you submit a dispute to break down the process further.

Day 4 – You can choose to “Escalate the dispute” and ask Alibaba to mediate if the supplier does not respond.

Day 7 – Two cases:

  • The dispute will be automatically escalated if the supplier does not respond to your proposed solution
  • The dispute will be automatically canceled if you do not respond to the proposed solution

Day 30 – Alibaba will intervene if you and the supplier have not reached an agreement or still negotiating.

When the Alibaba dispute mediation team gets involved, they will usually ask you and the supplier to provide evidence first – within five business days.

Once they have enough evidence, they will decide whether the seller will cover all costs or whether Alibaba will support the return.


Why be Alibaba Trade Assurance Refund May Rejected?

Alibaba will not agree with refunds in the following cases:

  • You did not provide clear product specifications
  • You had not checked the sample product quality before you placed the bulk order
  • You find the quality defects after the goods arrived in your country

We should clarify that Alibaba will not offer unconditional refunds simply because the buyer only requests it.


Alibaba Trade Assurance Conclusion

As such, this is the complete guide for Alibaba Trade Assurance. We’ve covered how it works, what exactly Alibaba Trade Assurance is, and how to file a dispute if you need it.

You should choose the right seller and use Alibaba’s online platform to pay and qualify for the trade assurance.

I am Yan, the founder of Yansourcing, the best sourcing agent in China, who can quickly and safely help you buy and import from China. If you have any questions about importing from China, don’t hesitate to contact us.

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