Japan Business Law: Is it necessary to always respond to cancellation and refund requests from customers?

At aesthetic salons and cosmetic treatment clinic, customers may ask for a refund or cancellation of the contracted plan.

The requests may vary, such as being either directly from customers, through national consumer affairs centers, or through lawyers.

Since aesthetic salon owners are not always familiar with the law, they may respond to the requests even though the cancellation or refund request is unreasonable.

Based on an example of an aesthetic company, this article will explain how to appropriately handle customer refund and cancellation requests.

Regarding “Specified Continuous Services” that include aesthetic salon and cosmetic treatment

An aesthetic service provided by aesthetic salon is termed a “Specified Continuous Services” under the Specified Commercial Transactions Act.

“Specified Continuous Services”, a service specified by a Cabinet Order, are transactions in which the provision of long-term and continuous services is promised in exchange for the payment of expensive fees.

Currently, seven services are included in this category of Specified Continuous Services such as language schools and cosmetic treatment clinics.

However, Specified Continuous Services are limited to services which are priced over 50,000 yen.

Aesthetic services which are priced under 50,000 yen is not defined as a Specified Continuous Services and therefore is not covered under the Specified Commercial Transactions Act.

A service of 50,000 yen or less will be subject to general laws such as the Civil Code, therefore, the contract will be canceled according to the Civil Code. Those services include “trial plans” or “trial courses” in which customers can experience treatment at aesthetic salons for a reasonable price (50,000 yen or less).

Necessity of “contract document” and “outline document”

Under the Specified Commercial Transactions Act, when conducting a “Specific Continuous Service”, the service provider is obliged to issue a “contract document” and “outline document” to those who receive the service. Aesthetic salon is no exception.

However, the obligation to issue these documents is applied only for the Specific Continuous Service.

Therefore, in the case of cancellation requests of an aesthetic service priced under 50,000yen, even if a national consumer affairs center requests to submit contract documents as an evidence of contract conclusion, the service provider does not need to submit the documents. Issuing documents is not required by law.

Operators of aesthetic salons should keep this in mind.

Note: Cooling-off for services priced under 50,000yen

A person who received aesthetic services can cancel the contract without paying penalties or compensation for damages, if cancelled within 8 days after receiving contract document and outline document. This is called “cooling-off”. Furthermore, the person can cancel the contract, even after the cooling-off period has passed, by paying a certain amount of penalty.

However, there are also cases where customers request cooling-off or cancellation, even after they have received an aesthetic service priced under 50,000 yen, such as “trial course”.
As mentioned above, these services are not “Specified Continuous Service” under the Specified Commercial Transactions Act. Therefore, cancellation due to default under the Civil Code or termination upon agreement may become an issue but cooling-off and cancelation stipulated under the Specified Commercial Transactions Act will not. For services under 50,000 yen, service providers must be careful not to accept cooling-off and cancellation from their customers.

Regarding Returnable “Related Goods” and Unreturnable “Recommended Goods”

“Related Goods” under the Specified Commercial Transactions Act are products which are required to purchase when receiving aesthetic services, such as cosmetics, supplements, underwear, beauty facial equipment, etc. These goods are subject to cooling-off and cancellation.

It should be noted that business operators, who provide “Specific Continuous Service” under the Specified Commercial Transactions Act, must describe on the contract document and outline document each product names and prices of the Related Goods.

Therefore, items required for purchase are listed as “Related Goods” in the contract document of the aesthetic service and items that are not required to purchase nor described in the contract document are “Recommended Goods” which are not subject to cooling-off or cancellation.

There are cases where supplements sold by aesthetic service providers are categorized as Related Goods under the Specified Commercial Transactions Act, they are normally “recommended (not necessary)” and in many cases are Recommended Goods unless described in the Related Goods column of the contract documents.

In this case, there is no need to respond to cooling-off and refund requests on cancellation claims from customers or national consumer affairs centers, even if supplements are unused.

As mentioned above, it is possible for aesthetic salon operators to refuse cooling-off, cancellation and refund requests from customers in some cases.

It may be difficult to judge whether refusal is possible depending on cases.

In order to avoid unnecessary trouble in the future, please make an acceptable contract, with sufficient explanation in advance, for both the management and customer sides.