Alibaba launched Trade Assurance service in early 2015. Thanks to this service, inquiry on Alibaba has been increasing. However, since its launch, this program has received both good and bad reviews among buyers and sellers. Some suppliers will even choose not to accept trade assurance orders, or choose to increase the product price by 2-3% for trade assurance orders. For others, they are happy to take trade assurance orders to enhance their supplier ranking on Alibaba. 

Why is that? Why buyers prefer to use it, while some suppliers do not? Can the buyers’ interests be fully protected during disputes? How can buyers take advantage of this service? When is a good time to file a dispute? How to select a reliable trade assurance supplier?

We’ll uncover all of the above questions in today’s article. You’ll also find we spend a lot of time emphasizing the importance of clearly specifying product requirements, shipment date, etc from the very beginning in order for you to develop sufficient evidence during the dispute.  

Believe that you’ll have a better understanding of how to use trade assurance after reading the article. You can navigate to related content via the below links. Enjoy reading and feel free to share with us your experience in using trade assurance. 

1. What’s Trade Assurance? How Does it Protect You?

Trade assurance is a transaction protection service launched by Alibaba to enhance the trust between buyers and suppliers, with Alibaba acting as the intermediate assurance party. Buyers can get 100% payment protection if the supplier breaks the on-time shipment or product quality terms of your contract.

If you place a Trade Assurance order on Alibaba, and the supplier can’t ship your goods on time or meet your quality standards specified in the contract, you can open a dispute and apply for a refund. If the supplier is found to be at fault, Alibaba will provide you with a refund of up to 100% covered amount on behalf of the supplier. Covered amount refers to the amount of your payment that will be protected. We’ll further elaborate on it in the following chapter. 

Though it’s a free service, you still need to pay the payment processing fee when conducting a transaction on Alibaba. More details can be found in the Payment chapter

2. How to Create a Trade Assurance Order?

Given the benefits of trade assurance service, once you decide to use trade assurance to protect your order, you’ll need to know how to create such an order. In this chapter, we’ll show you the process step by step. You can create it by yourself or ask your supplier to create it for you.

You can choose the dual protection for on-time shipment and product quality at the same time while creating the order. 

Step1: Know the Trade Assurance Limit of Your Supplier 

Choose a supplier with a Trade Assurance logo and check their Trade Assurance limit. You can find their trade assurance limit when you hover over the Trade Assurance logo.

 Trade Assurance logo.

Note: Trade assurance limit is granted by Alibaba to the supplier, based on their transaction experience, business reputation, etc. It’s suggested to choose suppliers with a high trade assurance limit. 

It is also important to choose the supplier with a trade assurance limit that exceeds your order value.

If the limit is lower than your order value, say, you’ve got an order of $50,000, and the supplier’s trade assurance limit is $30,000, the supplier is more likely not to accept this order, as in such a situation, even if you paid for the order, Alibaba will freeze supplier’s capital until delivery, causing cash flow difficulty for the supplier. 

Step2: Create the Product Specifications and Delivery Terms 

Specify all the product details, quality requirements, shipping time, dispute resolution, etc very clearly in the order system and in the purchase contract. As they are the official legal documents to be referred to in case of disputes. 

1. Product design file. If you want your products to be exactly the same as your design, be sure to send the design files to the supplier, instead of just sending over a product photo. 

2. Quality requirements. Specify how you’ll determine if there is a quality issue, based on sample quality before shipment, or 3rd party inspection, and specify below important product details. 

  • Color. For example, if you source red wine tumbler, do not just say “red”, instead use Pantone color 186C or RGB. If you are not satisfied with the color of the products received, you can easily compare the color with Pantone color to give yourself strong evidence during the dispute. 
  • Size. In the case of wine tumbler, you’ll need to specify the Length, Width, Height. eg. CM: 8.8*8.8*13, so the suppliers can easily follow these specifications. 
  • Material: For example, 100% stainless steel, other mixture is not acceptable. Also, state that you’ll assign 3rd party inspection to do the material testing. If not clearly stated, you’ll lack evidence during the dispute. 
  • Weight if applicable: eg. 217g. You can also state a range of acceptable weight: 215g-219g. With this as a guide, you can open a dispute for a refund or return the goods once the products inspected are found to be 100g. 

3. Quantity. Especially for small daily-used products, specify the exact quantity you want for each item. You can ask for a refund when there is a quantity shortage. 

4. Packaging details. Specify the packaging material, carton size, labeling requirements, design logos, whether to use a pallet or not, etc. If the goods received are damaged, you may accuse of poor packaging, but still, you need to have strong evidence for a successful dispute. 

5. Shipment Date: instead of saying to ship in Aug, specify a date, such as Aug 5, 2019. You can also specify a solution if there is late shipment. If the supplier finds it difficult to hit the shipment date, he needs to discuss a new shipment date with you, and revise it in the trade assurance order system. However, if there is no prior confirmation with you (buyer) for a late shipment, you can open a dispute.

6. Customization Specifications. If you need to customize the product, be sure to specify the Customization Specifications in order remark or attach any design and logo files to the supplier. 

Below is an example of clarifying shipment date in the purchase contract, you can also specify other important quality requirements, as well as dispute solutions in the purchase contract, as specific as possible to protect yourself while using trade assurance. 

purchase contract, as specific as possible

product detail

shipment detail

Note: you have to be very specific regarding the above details to make it easier for the supplier to clearly understand your requirements. Otherwise, in case of dispute, it’ll be difficult to support yourself with such evidence to get a refund successfully.

Step3: Choose Coverage Type for Your Order 

Select coverage type to determine the amount of payment for protection. There are two coverage types: Pre-shipment Coverage and Post-delivery Coverage. 

Under Pre-shipment coverage, you are protected for the initial payment. 

Under Post-delivery coverage, you are protected for the full amount of your order payment. 

For example, you create an order of $80,000, with a down payment of $25,000. If you choose the pre-shipment coverage, in case of any quality problem, your initial payment of $25,000 is protected. If you choose post-delivery coverage, and the supplier’s trade assurance limit is $100,000, your total order of $80,000 is protected and can get refunded if the supplier is proved to be at fault. 

Step4: Confirm your order and Make the Initial payment. 

All of the above steps can also be summarized in the following workflow.

Note: during the order creation process, it is very important to confirm with the suppliers about all of the above product details, quality requirements and shipment date before production. 

trade assurance workflow

3. How to Pay a Trade Assurance order?

There are 5 payment methods available to pay for purchases using trade assurance service, including Online Bank Payment, Credit Card, T/T, Western Union, and Pay Later. But you cannot pay via Paypal, otherwise, your order is not protected by trade assurance service. 

One thing to be noted here is that, under trade assurance order, a virtual CITIBANK account will be created automatically for each transaction, you must pay to the specific CITIBANK account instead of suppliers’ personal account directly. Otherwise, your payment will not be protected by the trade assurance service. 

Once payment is made, the payment will not arrive at your supplier’s account immediately and they can only get it after you inspect your goods before shipping or after delivery. 

a. Choose Online Bank Payment as the payment method 

It is only available for buyers with a US account or some German and French bank accounts. For each transaction, there is a payment limit of $50,000 for a US account and $10,000 for other accounts. 

It costs a lot less than Credit Card and Wire Transfer and is the best choice for large orders.

  • Low transaction fees ($15-$30 per transaction)
  • Online Bank Payment is only available for USD & EUR
  • It only takes 4-5 working days to arrive in the supplier’s CITIBANK account

b. Choose Credit Card (Visa or Master Card) as the payment method 

It is very easy to use a Credit Card, just “add a new card to pay in USD” to bind the card with the order. Just like Paypal, you can apply for chargeback, if you are not satisfied with the quality of goods received. 

When that happens, Visa or Master Card will get involved, and investigate into the transaction. You need to keep all the shipping documents as evidence during the dispute. Although there is only a possibility of 3‰ for credit card chargeback, most suppliers will only accept this payment method for small orders valued at less than $500, and not accept it for large orders.  

  • Supported card: Visa, MasterCard (Credit/Debit Card) only
  • Transaction fees (2.95% of payment amount)
  • The payment limit per transaction is $12,000
  • Payments require 1-2 hours to arrive in the supplier’s CITIBANK account

c. Choose Pay Later as the payment method

If you have financial pressure recently, and in urgent need of importing goods from China to make money, then Pay Later can be a good choice. It is a small business loan from a 3rd party financial partner of Alibaba to finance your trade assurance orders for up to 6 months. 

Currently, you can apply for credit up to $150,000 to pay for orders on Alibaba from Kabbage, an online financial technology platform based in Atlanta, Georgia. There is no payment processing fee for this method. To know how to apply for the credit, you can click here. 

  • Payment arrival time: 1-3 working days after the loan agreement is completed
  • Supported currency: USD

d. Choose Telegraphic Transfer (T/T) as the payment method 

Telegraphic Transfer (also known as Wire Transfer, Bank Transfer) is the most popular business-to-business payment method nowadays. It’s very safe and convenient. However, for this payment method, be sure to pay to the CITIBANK account instead of the supplier’s other private account, otherwise, you will not be covered by Trade Assurance. 

The transaction fee will vary by different banks, you have to check with your local bank for details. Usually, the bank charge is from $20-$50. 

  • No amount limit for each transaction
  • Available currency: RMB/USD/HKD/GBP/EURO/SGD/AUD/CAD/JPY
  • It takes about 3-7 working days to arrive in the supplier’s CITIBANK account

e. Choose Western Union as the payment method 

Under trade assurance, only USD currency is accepted for Western Union and it is only available for USA buyers. The payment limit is also very small, available for orders amount less than $2,500. It takes 1 business day to get to the beneficiary’s account. 

For more details and tips on how to send money via T/T, Western Union, you can read our other article: How to Send Money to China for Lowest Cost? (Review of 6 Methods).

4. How to Open a Dispute if You Receive Defect Goods?

If unfortunately the goods arrived does not meet the specified requirements, you’ll decide to open a dispute on Alibaba. However, you can only open a dispute within the applicable claim period, after full order amount is paid.

1. If you ever click “Confirm” on the order system to confirm receipt of goods, you have to claim the dispute within 30 days after confirming the order receipt. 

Open a Dispute

2. If you did not click “confirm” in the order system, then depending on the shipping method, you need to lodge a dispute no later than the following days. As Alibaba will automatically confirm the receipt, even if you do not confirm manually in the system.

  • By Express: 15 days
  • By Air Freight: 30 days
  • By Sea Freight/Land transportation/Post Parcel: 60 days

With the Claim Period in mind, here is how you can open the dispute online: 

Step1: go to Order List Page and click “Open a dispute” and “Apply for refund

apply for refund on alibaba

Step2: Fill in the Dispute Form and Upload Evidence 

Be sure to keep below important documents as evidence to ensure a successful dispute solution. Alibaba dispute team will investigate and review this evidence and make the final judgment. 

List of documents for dispute solution: 

  • A signed copy of a purchase contract or invoice(PO)
  • Documents related to the product specifications 
  • Documents related to design drawings or files 
  • A copy of the inspection report
  • A copy of all related communication records with your supplier (eg. texts, videos, etc) 
  • A signed copy of the transaction receipt
  • Any pictures or videos of defective goods

apply for refund on Alibaba

Step3: Wait for Suppliers’ response or Escalate it to Alibaba dispute team 

After you submit a dispute, usually there will be 5 days for the supplier to respond for a solution discussion. However, if there is no response from the supplier, you can escalate it to Alibaba dispute team to get them involved.

Once Alibaba is involved, they’ll ask both you and the supplier to submit evidence to further investigate into the case. If it is the supplier who’s found to be at fault, Alibaba will provide you with a refund on behalf of the supplier.  

Whether it is you or the supplier’s fault, it is dependent on the evidence provided, especially related to the issue of product quality. Once again, be sure to specify the quality requirements in the very beginning, confirming it with the suppliers, and keep all the communication records during the process. 

5. How to Inspect Quality before Shipment or after Products Received? 

Based on the coverage type (Pre-shipment coverage or Post-delivery coverage) you choose for the trade assurance order, you can choose to inspect products either before shipping or after delivery. 

a. Quality Inspection before Shipment 

A common mistake usually made by both supplier and buyer is that they do not pay for 3rd party inspection to inspect the goods before shipment, especially for small orders, as they think it costs too much for a 3rd party inspection. 

Under trade assurance, it is very necessary to involve a 3rd party for the official inspection report as evidence. If a quality discrepancy is found, you can either negotiate with the supplier for a solution or open a dispute for a refund of initial payment. 

You can pay for Alibaba Inspection Service attached to trade assurance service. You can choose to add inspection service while creating the trade assurance order or before making initial payment.

value added service on alibaba

alibaba inspection service

You can also hire a 3rd party inspection company by yourself, such as SGS, Intertek, Asia Inspection, etc. The usual rate is $300 for one inspector per day. You can choose the most cost-effective way based on your order value. 

b. Quality Inspection after delivery 

After you paid the full order amount, but the goods arrived are damaged or not satisfactory, before you open a dispute, you need to hire a 3rd party inspection company in your country to issue a quality report, detailing the percentage of the major defect and minor defect, etc, as evidence for filing a dispute. 

If no 3rd party inspection is involved, chances are that it’ll be difficult for you to ask for a refund of full payment, as Alibaba dispute team will find it hard to judge which party is at fault, if there is no strong evidence. 

Although both you and the supplier can provide product video or photo for evidence, what if the quality problems happen during transportation. In such a situation, you can only refer to the quality terms in the purchase contract for a negotiation with the supplier. 

6. How to Well Protect While Using Trade Assurance? (Real Case Study) 

Case1:  Alibaba completely denied the refund, as the buyer didn’t have a clear agreement with the supplier. 

Buyer: “Got the product last Monday, and to my surprise, the main part of the product is not what we bought, material-wise. We were buying Gold and received Bronze instead. So, I email the supplier, send him a message on Whatsapp, call him a couple of times, and guess what? No replies… I opened the dispute, submitted evidence of what we discussed on trade manager/WhatsApp/emails, and how the product does not meet the requirements that we discussed.” 

Suppliers’ response to the dispute: “The Alibaba trade assurance contract/order details mentions nothing about the Gold part.” 

Results: Alibaba closed the case. The buyer was not refunded, due to lack of evidence regarding the material. The supplier got their money and the buyer got a product they cannot sell.

Source: Original Case


Cases like the above happens a lot. No matter whether it is material or color, if there is only “Gold” or “Red”, such general terms are written in the order, you’ll most likely fail in case of quality issues. Instead, you need to specify the color number either using Pantone or RGB and write them into the order details, as specific as possible as future evidence. For the material, you can even state you’ll assign a 3rd party to do the material testing to ensure 100% quality compliance. 

Without strong evidence, whatever aspect you accuse, either packaging, or material, or any other, you’ll not get a refund as expected. 

Case 2: The buyer spent over 2 months on the dispute, no solution was ever reached even within 2 months.  

There is another buyer, an importer of machinery. When the goods arrived, the buyer found they were damaged, then he filed a dispute to Alibaba. At first, Alibaba said buyer lacks strong evidence of packaging, as the supplier provided evidence of good products before shipment. Later the buyer lodged another dispute on poor spraying and welding, he also uploaded product photos to prove that, but still in vain. 

Later the buyer spent lots of money to hire BV to inspect the goods and uploaded the inspection report. During the dispute process, both the buyer and seller provided evidence from each other to protect themselves. 2 months passed, but no solution was ever reached.

Source: Original Case 


It is easy to open a dispute online but takes lots of time and energy in collecting the evidence to get it resolved. As the intermediate assurance party during the dispute process, the ultimate role of Alibaba is to help both parties reach a mutual agreement. Although both parties can provide evidence, sometimes it is still difficult for Alibaba to determine who is at fault. 

In this case, even if the buyer hired a 3rd party inspection company, an inspection report only did not increase the buyer’s bargaining power, as the inspection standards are set only by the buyer, not through mutual agreement with the supplier.

Final Thoughts

Trade assurance is becoming more and more popular among buyers, as it does provide payment protection successfully as long as the buyer can upload sufficient evidence against the clear requirements specified in the order. 

However, out of the same reason, some suppliers are still reluctant to accept trade assurance order, as they face risks associated with it. As such, if the profit is very thin already, some suppliers will increase the product price by 2-3% to compensate for the additional fees and costs under trade assurance order. For some suppliers, they’ll choose to accumulate their trade assurance limit through each order to rank at the top on Alibaba’s supplier list to win more orders. 

For buyers, although trade assurance provides an additional layer for order protection, it does not mean you can sleep on that. Essentially, no matter whether you choose to use trade assurance or not, it all comes down to selecting a reliable supplier. 

If you choose a wrong supplier, who agrees to use trade assurance, but ship out poor quality products, even if you finally get a refund, think about the time spent for the dispute solution. Sometimes it can be an additional 30-day loss back and forth, impacting the normal sales of your products. Not to mention there are possibilities that you cannot get refunded as expected.

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