The revised Specified Commercial Transactions Act will take effect on June 1, 2022. This article explains the details of said act and the Stripe configurations that must be made. Please see here for the basic details and requirements of the Specified Commercial Transactions Act.
This guide was created based on guidelines and materials published by the Consumer Affairs Agency. It was created with utmost attention to detail, but is not meant to guarantee accuracy. Please make sure to consult the relevant materials and guidelines.
2021 Revisions to the Specified Commercial Transactions Act and to the Act on Deposit Transaction Agreements for Specified Commodities
Guidelines for Disclosures during Mail Order Application Stage
In light of increased transactional problems associated with subscription purchases, the revised Specified Commercial Transactions Act now mandates the disclosure of certain details regarding commercial transactions at time of online orders, and prohibits wording and other indications that could mislead consumers (Article 12-6 of the Specified Commercial Transactions Act). It also now allows consumers to reverse decisions they made as a result of misleading wording and other indications that violate the Act (Article 15-4 of the Specified Commercial Transactions Act).
In light of these provisions, the Consumer Affairs Agency published the Guidelines for Disclosures during Mail Order Application Stage (“Guidelines”) to clarify interpretation and provide specific examples.
The revised Specified Commercial Transactions Act and Guidelines require businesses to display information so consumers can see all necessary information for matters that can cause confusion at a glance. This prevents consumers from being billed for what they thought was a trial, or being unable to terminate a contract due to complicated requirements when they were promised that they could cancel anytime. Businesses must comply by ensuring end users can access certain contractual information at the final confirmation page when placing online orders.
In principle, the “final confirmation page” must display all of the following information.
① Quantity ② Sales price/consideration ③ Payment period and method ④ Timing of delivery/provision ⑤ Details regarding offer time limit (if any) ⑥ Information regarding withdrawals and cancellations
The Guidelines define a final confirmation page in online sales as the page where the consumer finalizes their application to form a contract by clicking an order or other button. The Guidelines indicate that any page that is titled “order confirmation” or similarly will be regarded as the final confirmation page, but also note that any page that acts as a final confirmation page will be treated as such, regardless of its title.
The Guidelines indicate that businesses must disclose details such as the quantity, frequency, and contract period based on the type of product/service sold, and in a way that allows consumers to easily verify those details.
In the case of subscriptions, the Guidelines also state that businesses must disclose the quantity of product in each delivery as well as the number of deliveries, so consumers can understand the total quantity to be delivered. If notice that it is a subscription is in small or hard-to-see font located away from text such as “First Order Free” or “Free Trial,” the disclosure is more likely to be considered as a violation of the revised Specified Commercial Transactions Act.
It is preferable for businesses to disclose if a subscription is indefinite, and, if so, disclose details such as quantity to be provided in a sample interval (e.g., in years) for illustrative purposes. The same applies to auto-renewing contracts.
Businesses should also provide indicators when the same product is sold in different quantities, so consumers can clearly distinguish them. For example, if Product A is sold in packs of 5, 3, and 2, or in different sizes (e.g., large/800 mL, medium/500 mL, small/300 mL), it is the product descriptions that should disclose the product name and quantity, size, etc..
When a consumer purchases multiple products, businesses must disclose the individual product price and the total. If there are additional shipping rates, these must also be disclosed.
In the case of subscriptions, businesses must clearly indicate the fees for each delivery, as well as the total amount to be paid by the consumer. For example, if a subscription involves a monthly delivery for 6 months, the final confirmation page must disclose the monthly payment including shipping rates, as well as the grand total for the six-months. For subscriptions that provide a special price for the initial delivery, businesses must disclose the price for that delivery and the prices for subsequent deliveries.
In the case of free trials that automatically transition to a paid contract, businesses must clearly disclose in advance when the contract will transition and the amounts to be paid. In the case of indefinite contracts, it is recommended to present the total payment for a sample fixed interval (e.g., one year) for illustrative purposes.
Businesses must disclose the applicable payment method and relevant payment periods.
If there are several payment methods used and the information cannot be shown dynamically, the payment period for each supported payment method must be disclosed.
The timing of product shipment, delivery, and service commencement must be disclosed.
In the case of a subscription, the delivery period for each delivery must be disclosed.
In the case of limited-time offers, the offer period must be disclosed in the final confirmation page. To stay compliant, businesses can disclose the details next to the product name or include a link to the details. But disclosures with ambiguous timelines (i.e., “only available now”) are not permitted.
Wording that will most likely stay compliant: Special Three-tiered Bento Box [Must order by December 27]
Wording that will most likely violate the law: Special Three-tiered Bento Box [Only sold now!]
This does not apply to offers where the consumer’s ability to purchase the product is unaffected by the lapse of a set time period, such as limited quantity, certain payment conditions, special bonuses, post-sale services, and ancillary benefits. Additional examples below:
Offers that do not affect the consumer’s ability to purchase the product
Limited-time reduction in price
Limited-time point redemption campaigns
Limited-time free shipping campaigns
Offers unrelated to fixed periods of time
Limited quantity sold
Businesses must disclose the method, conditions, and ramifications of withdrawing or canceling a contract/order.
Specific examples include cancellation fee conditions, cancellation procedures, and cancellation deadlines. It is possible to include a clear link to a separate page or window where consumers can verify these details. However, such details must be explicitly stated in the final confirmation page in cases such as the following: there is a limited time window for cancellation; the cancellation method requires steps that consumers would not anticipate, such as the submission of additional personal information; or the business does not accept cancellation requests through means that consumers can satisfy easily.
Moreover, where cancellation requests are accepted via phone, an inability for customers to connect to a representative or the failure of representatives to respond to requests could be considered a misrepresentation.
The following sections explain how to display the six main disclosure categories on the final confirmation page of Stripe Checkout.
The Stripe Checkout page indicates the product quantity and charge amount, and the quantity can be modified. It also indicates the trial period and details of the subsequent cycle in the case of a regular billing that involves a trial period.
At Checkout, prices including shipping rates and consumption tax can be indicated in three different ways.
The simplest method is to set a price that includes the shipping rates and consumption tax when registering a product. Please indicate in the description that the price includes consumption tax and shipping rates. Please click here for information on creating products.
Individually set the shipping rates and tax rates when creating a product, and link them to each amount when creating the Checkout URL. This allows the shipping rates and consumption tax to be disclosed separately in the final confirmation page in Checkout.
When using Payment Links, or when you need to account for reduced tax rates or overseas value-added taxes, we recommend using Stripe Tax instead of “tax rates”. The tax rate can be set for each product by using Stripe Tax.
In Checkout or Payment Links, the payment method can be selected at the final confirmation page.
The buy-now-pay-later settlement method is not currently supported in Japan. Transactions must generally be settled on the spot for single orders.
If products need to be delivered, the [shipping rate] can be configured to show the expected delivery date on the final confirmation page.
There is no function to display offer expiration dates or sales period on Checkout. One way to disclose the information is to include it directly in the product name. When conducting a limited offer, please indicate the scheduled end date and time in the product name or its description.
Returns and refunds can be configured in the Stripe Dashboard under [Settings] > [Checkout and Payment Links]. By enabling the [Refund and return policy], you can include policies regarding refunds, exchanges, and returns.
When processing payments outside of Stripe Checkout/Payment Links, such as through Stripe Elements or mobile SDKs, you will need to develop your own final confirmation page to display each relevant item.