Customer Compensation Framework

The 'Customer Compensation Framework' is a standardized plan used in foreign trade after-sales repair scenarios to define the compensation provided by the seller to the buyer when the buyer suffers losses due to product quality issues or repair delays. Its core includes compensation trigger conditions (such as repair overdue, multiple repairs, transportation damage), compensation forms (refund, discount, free replacement, bearing freight), and caps. It is mostly used in B2B equipment export, electronic products, mechanical parts, and other industries requiring long-term after-sales support. Notes: The compensation framework must be clearly stated in the contract, avoiding verbal promises; distinguish 'warranty' from 'compensation'—warranty is the obligation to repair, compensation is additional loss compensation; the compensation framework should set a reasonable cap (e.g., 5%-10% of the order amount) to prevent buyer abuse. It differs from 'quality assurance clauses,' which focus on product standards, while the compensation framework focuses on monetary or service remedies after breach. It also differs from 'return policy'—returns terminate the transaction, while the compensation framework may retain the transaction but compensate for losses.