Customer Compensation Medium-term

Customer Compensation Medium-term is a compensation arrangement in foreign trade after-sales terms. It refers to the seller providing partial or installment compensation to the customer for losses caused by product failure during the repair process, within a medium-term period (usually 1-3 months after repair completion). It is commonly used in cross-border transactions involving machinery, electronic products, and other goods requiring on-site or return-to-factory repairs. Its characteristic is that compensation is not paid immediately; instead, an observation period is set to confirm the repair effect and the customer's actual losses before payment. Notes: The contract must specify the starting point of the medium term, the compensation cap, and whether indirect losses are included; it should be distinguished from short-term compensation (immediate compensation during repair) and long-term compensation (e.g., extended compensation after the warranty period ends). This term helps balance risks for both parties, avoiding cash flow strain for the seller due to a one-time large payment while providing certain protection for the customer.