Recently, many mothers in Chengdu, Sichuan reported to the Chinese Business Daily Dafeng News that a franchise store called "Yingzhihuang Maternity and Infant Chain" failed to deliver goods or provide refunds after collecting a large amount of deposits from consumers. According to consumer statistics, more than 300 mothers have been affected, and the amount involved exceeds 1 million yuan.
At present, the brand has terminated the contract with the store involved, but consumers believe that the brand has failed in its supervision and failed to make a timely announcement after the contract was terminated, causing them to suffer losses based on their trust in the brand. The local police stated that the matter is currently being handled as a business dispute and has not yet been filed as a criminal case.
The store involved
>>Bao’s mother’s reflection——
"I went for the brand" but couldn't redeem it after recharging.
Consumers have formed two rights protection groups with 652 people
Ms. Wang, 30, is one of the consumers in this incident. She told reporters about her experience. As a native of Sichuan, she is familiar with "Infant Emperor", a local maternal and infant chain brand. After seeing the relevant promotional information through the Xiaohongshu platform, she went to the physical store in Zone K, Sino-German British City-State, Chengdu High-tech Zone for inspection.
"I feel more reassured when I see that it is a chain store of Baby Emperor and has a physical store." Ms. Wang said that the store uses "wholesale discounts" to attract customers to deposit money in advance – for example, if you purchase a certain number of cans of milk powder, you can receive a number of free cans. Each can is a few yuan to more than ten yuan cheaper than the retail price.
"We also want to save some money for our children, and the boss is very cheerful and will give some extra things." Ms. Wang said that she has paid more than 10,000 yuan, and there is still about 5,000 yuan worth of milk powder that has not been picked up.
Screenshot of rights protection group
According to reports from many consumers, the payment method is extremely confusing. Some of the money is scanned into the store employee's personal account, some is transferred to the legal representative's personal account, and some is paid through the store's public payment code, and is not uniformly entered into the company's public account. This payment method brings difficulties to subsequent rights protection.
As the inability to pick up goods spread, consumers formed a rights protection group. There are currently 652 people in the two groups. According to incomplete statistics from consumers, more than 300 mothers have confirmed that they have been defrauded. The maximum recharge amount for a single person exceeds 30,000 yuan, and the victims are located all over the country.
Victim communication progress
>>Brand response——
A letter has been sent to terminate the authorization: the franchise store has terminated the contract due to illegal operations
The reporter called the official phone number several times, but no one answered.
According to industrial and commercial information, the industrial and commercial registration name of the store involved is "High-tech Zone Yinglun Yinghuang Maternity and Baby Products Store". It was established on February 10, 2023. It is an individual industrial and commercial household. The operator is Zhu Moumou, with a registered capital of 100,000 yuan.
On March 27, the brand owner "Sichuan Yingzhihuang Maternal and Infant Products Co., Ltd." issued a "Letter of Termination of Trademark Use Rights" to the franchise store. The letter stated that during the operation of the franchise store, there were "serious breaches of contract such as large quantities of illegal shipments to other places, delays in shipments after accepting payment from customers, and refusal to ship goods, which resulted in a large number of customer complaints and rights protections, seriously damaging the legitimate rights and interests of our brand owners." Based on this, the brand decided to terminate the store’s trademark use authorization from the date of the letter, and required it to remove all materials bearing the “Infant Emperor” logo within three days.
Trademark right termination letter
The letter also emphasized that franchise stores should "continue to properly handle disputes with consumers, fulfill unfinished supply obligations or refund corresponding payments, and shall not refuse to assume legal liabilities arising from their own operations on the grounds of authorization suspension."
However, many consumers said they knew nothing about it before the brand sent the letter. "The store's signboard, employee uniforms, and cashier receipts all had the Yingzhihuang logo. We had no idea that the store had been terminated." A mother said, "We recharged the store just because of Yingzhihuang's brand reputation. But when something went wrong, the brand immediately said it had nothing to do with them."
Baoma also said, "When we were recharging, this store was still using the Infant Emperor brand normally. Since the brand has regulatory obligations, why did it ignore problems such as cross-selling and illegal operations in stores for so long? Why didn't it issue a notice or post a public notice in the store after the contract was terminated? If the brand informed consumers in time, we would not continue to recharge." They believe that the brand failed to fulfill its obligation to inform consumers after the contract was terminated and allowed the franchise store to continue to attract customers and absorb deposits in the name of the brand, which in disguise condoned the merchant's violations.
As of press time, the reporter called the official phone number of "Sichuan Yingzhihuang Maternal and Infant Products Co., Ltd." many times, but no one answered. Subsequently, the reporter contacted the mothers to learn about the situation. A representative from Yibaoma said that since March 25, they had repeatedly complained to the Infant Emperor headquarters about store violations, but had not received a clear reply. Later, they saw a "Letter of Termination of Trademark Use Rights" issued by the Infant Emperor headquarters posted in the store involved. "We believe that the headquarters is evading responsibility and has complained many times, but since March 28, no one has answered the phone." said the representative of Baoma.
>>Police response——
It is currently handled as a business dispute and can help consumers coordinate
As the case does not constitute escape or fraud, no criminal case has been filed yet.
In response to this matter, the reporter contacted the Xinchuan Police Station of the High-tech Zone Branch of the Chengdu Municipal Public Security Bureau within its jurisdiction. Police said they have received multiple reports about the store recently.
According to the police, the actual operator of the store involved was not Zhu Moumou, but Li Moumou. This person has not lost contact and is still in Chengdu. On March 29th and 30th, the police organized some consumers in Chengdu to negotiate with the actual operators. The other party admitted that the current capital chain was broken and that refunds or shipments were temporarily impossible, and they signed refund agreements with some consumers. "If he didn't run away and was still in the local area, this is a sign of poor management and financial problems, which is a business dispute." The police explained to reporters that only if the operator maliciously loses contact and absconds with the money will the conditions for filing a fraud case be met. At present, the matter has been handed over to the local community police for follow-up processing, and negotiations between the two parties will continue to be organized.
The reporter repeatedly called Zhu Moumou, the registered operator of the store involved, but no one answered as of press time.
>>Lawyer’s statement——
"Prepaid consumption" itself is not illegal, but this merchant has multiple violations
It is recommended that consumers take the dual-track approach of “administrative reporting + civil litigation” to safeguard their rights.
Lawyer Han Chaoze from Beijing Dacheng (Xi'an) Law Firm analyzed that "prepaid consumption" itself is not illegal, but the merchant in this case had multiple violations. According to the "Administrative Measures for Single-Purpose Commercial Prepaid Cards (Trial)", card-issuing enterprises should register with the commerce department and implement fund depository within 30 days after the issuance of the card. The franchise store involved was an individual industrial and commercial household, but a large amount of advance payments went into multiple personal accounts, which clearly violated the fund depository regulations and constituted an administrative violation.
In terms of criminal matters, although the police currently characterize it as a "business dispute", the core is to determine whether there is an "illegal possession purpose." If a merchant knows that the capital chain is broken and has no supply capacity, but still collects large amounts of money in the name of "wholesale discounts" and uses the funds for personal squandering or transfer, this may constitute the crime of contract fraud. The fact that the operator did not run away or admit the debt does not automatically rule out criminal suspicion. If it continues to collect payments knowing that it cannot perform the contract, it may still be found to have illegal possession purposes. Consumers can collect evidence such as "stopping purchases after payment" and "unknown use of funds" to promote the filing of criminal cases.
Han Chaoze suggested that consumers can adopt a dual-track approach of "administrative reporting + civil litigation" to focus on holding brands responsible.
Step one: fix the evidence. Payment vouchers (especially records showing access to personal accounts), door signs with the "Infant Emperor" logo, employee uniforms, cashier receipts and other brand-related evidence, chat records and audio and video recordings of merchants delaying delivery or admitting that funds are broken, as well as statistical lists of total recharge, spent and remaining amounts.
Step 2: Administrative reporting. Consumers can report to the Chengdu High-tech Zone Market Supervision Bureau and the Commerce Bureau in a unified manner, focusing on issues such as merchants issuing prepaid cards in violation of regulations, failing to keep funds in accordance with regulations, and using format clauses to infringe on consumer rights. Administrative regulatory authorities have the power to investigate, order corrections, or even revoke licenses. Although they cannot force refunds, they can put pressure on merchants by identifying the flow of funds and prompt them to come up with solutions.
Step 3: Civil litigation and accountability of the brand party should include the franchise store operator and the brand party as co-defendants and require joint and several liability.
Han Chaoze further analyzed that it is difficult for the brand to be completely exempted from liability. In this case, consumers should focus on pursuing the brand's "apparent agency" and "supervisory failure" responsibilities. Compared with pursuing the franchise store operators alone, they are more likely to achieve effective rights protection.
1. Consumers recharge based on their trust in the "Infant Emperor" brand. Even if the contract between the brand and the franchise store has been terminated internally, as long as the franchise store continues to use the brand logo to collect payments, as long as it is not announced prominently in the store or through official channels, it constitutes an apparent agency. According to Article 172 of the Civil Code, brands should still be responsible for consumers.
2. The brand admitted in the letter that the franchise store had long-term problems such as "huge quantities of illegal shipments to other places", but failed to stop or publicize them in a timely manner. It was an obvious fault and should bear corresponding responsibility.
If the civil lawsuit cannot be implemented in place, or if it is discovered that the merchant transferred a large amount of assets or canceled the account beforehand, the case can be reported to the economic investigation department of the public security organ again, focusing on reporting that the merchant defrauded the advance payment without the ability to perform the contract, and promoted the case to be converted from "business dispute" to "contract fraud".
Chinese Business Daily Dafeng News reporter Wang Yuxin and editor Liu Mengyu
