The revised Specified Commercial Transactions Act will take effect on 1 June 2022. This article explains this act in detail, and also lists 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 the utmost attention to detail but is not meant to guarantee accuracy. Please ensure that you 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 an increased number of transactional problems associated with subscription purchases, the revised Specified Commercial Transactions Act now mandates the disclosure of certain details regarding commercial transactions at the time of ordering online, 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 the interpretation and provide specific examples.
The revised Specified Commercial Transactions Act and Guidelines require businesses to display information so that consumers can view all of the necessary information regarding potentially confusing matters 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 at any time. Businesses must comply by ensuring that end users can access certain contractual information on the final confirmation page when placing online orders.
In principle, the final confirmation page must display the following information.
① Quantity ② Sales price/consideration ③ Payment period and method ④ Timing of delivery/provision ⑤ Details regarding the offer time limit (if any) ⑥ Information regarding withdrawals and cancellations
For online sales, the Guidelines define the final confirmation page as the page where the consumer finalises their application to form a contract by clicking on an order or another button. The Guidelines indicate that any page entitled “Order confirmation” or similar will be regarded as the final confirmation page. However, they 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 or service sold, and in a way that allows consumers to verify those details easily.
In the case of subscriptions, the Guidelines also state that businesses must disclose the product quantity in each delivery, as well as the number of deliveries, so that consumers understand the total quantity to be delivered. If you notice that details about a subscription are written in a small or hard-to-read font, and are located far away from any text such as “First order free” or “Free trial”, the disclosure is more likely to be considered to be a violation of the revised Specified Commercial Transactions Act.
A preferred approach would be for businesses to disclose whether a subscription is indefinite. If this is the case, then they should also disclose details such as the quantity to be provided in a sample interval (e.g. in years) for illustrative purposes. The same applies to the auto-renewal of contracts.
Businesses should also provide indicators when the same product is sold in different quantities, so consumers can clearly distinguish them. For example, if a product is sold in packs of two, three or five, or comes in different sizes (e.g. large/800 ml, medium/500 ml, small/300 ml), the product descriptions 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 six months, the final confirmation page must disclose the monthly payment including shipping rates, as well as the grand total for the six-month period. 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.
For free trials that automatically transition to a paid contract, businesses must clearly disclose in advance when the contract will transition, as well as the amounts to be paid. For indefinite contracts, it is recommended that the total payment for a fixed interval (e.g. one year) is given as an example for illustrative purposes.
Businesses must disclose the applicable payment method and relevant payment periods.
If several payment methods are 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 on the final confirmation page. To stay compliant, businesses can disclose the details next to the product name or include a link to the details. However, disclosures with ambiguous timelines (i.e. “only available now”) are not permitted.
Wording that will most likely remain compliant: Special three-tiered bento box [must order by 27 December]
Wording that will most likely violate the law: Special three-tiered bento box [only available now!]
This does not apply to offers where the consumer’s ability to purchase the product is not affected 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 are provided 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 cancelling 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 on 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 avenues that are easy for customers to satisfy.
Moreover, where cancellation requests are accepted via phone, if customers cannot be connected to a representative or representatives fail to respond to requests, this could be considered to be 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.
Set the shipping rates and tax rates individually 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 on 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 using Stripe Tax.
In Checkout or Payment Links, the payment method can be selected on the final confirmation page.
The buy-now-pay-later settlement method is not supported in Japan at present. 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 expiry dates or the sales period at checkout. One way to disclose this 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.