I. SPC Judicial Approach to Retail Visual Merchandising Fee Disputes

The SPC generally treats “visual merchandising fees” as falling under:

• Service contracts (《民法典》合同编 服务合同)
• Commercial display / decoration contracts
• Prepaid service contracts (advance payment consumption)
• Advertising & marketing service agreements (in retail context)

Core SPC stance:

Courts focus on:

• Whether services were actually performed
• Whether evidence supports completion of display work
• Whether unilateral retailer changes frustrate contract purpose
• Whether prepaid fees are refundable for unperformed services
• Burden of proof lies heavily on service provider

II. Key SPC Case Law Principles (Retail Visual Merchandising Context)

Case 1: Advance payment service termination due to non-performance (SPC Typical Case on Prepaid Consumption)

Principle: If services are not fully performed, consumers may terminate contract and demand refund of unperformed portion.

• SPC held that prepaid service contracts must be refunded proportionally when business stops providing services.
• Applied widely to retail display agreements paid in advance.

👉 Rule extracted:

Unperformed visual merchandising services = refundable prepaid fee proportion

Case 2: Burden of proof on service provider for service completion

SPC principle from service contract disputes

• If a retail display company claims payment for window design / merchandising setup,
• it must prove:
  • installation photos
  • acceptance reports
  • store confirmation
  • itemized service breakdown

👉 If evidence is missing:

• court may accept buyer’s claim for non-payment or refund

Case 3: Retail store relocation / change defeating contract purpose

SPC consumer service case analogy

Where service provider changes essential conditions:

• display location changed
• retail layout altered without consent
• branding installation cannot be used

👉 SPC rule:

If the contract purpose (brand display effect) cannot be achieved due to provider’s change, termination is allowed.

Case 4: Unfair standard clauses in retail service contracts are invalid

SPC Interpretation on prepaid consumption contracts

Invalid clauses include:

• “No refund after payment”
• “Service fee non-recoverable under any condition”
• “Client waives inspection rights of display work”

👉 SPC position:
Such clauses are:

• invalid or non-binding
• violate consumer protection principles

Case 5: Liability for “ghost service” or non-existent merchandising work

SPC typical fraud-related civil rulings

Where retailer or agency:

• invoices for visual merchandising not actually done
• submits fabricated display photos
• uses third-party generic images

👉 Court ruling principle:

• constitutes breach of contract
• may trigger punitive damages or fraud referral

Case 6: Price dispute where service value cannot be verified

SPC service valuation rule

If:

• merchandising company cannot prove service scope or value

Then:

• court may adopt consumer/retailer reasonable valuation
• or reduce fee significantly

👉 Rule:

Unproven service quantity = adverse inference against provider

Case 7: “Professional contractor closure” evading retail service obligations

SPC typical consumer protection case

Where service provider:

• closes business after collecting merchandising fees
• deregisters company to avoid liability

👉 SPC rule:

• legal representatives / shareholders may bear liability
• “bad faith exit” is not protected

III. Key Legal Issues Identified by SPC in Such Disputes

1. Nature of contract

Retail visual merchandising is treated as:

• service contract (not sale of goods)
• result-oriented obligation (not effort-only)

2. Proof standard

Service provider must prove:

• execution
• acceptance
• commercial benefit delivery

3. Refund principles

Refund depends on:

• partial performance
• unusable display output
• contract frustration

4. Consumer vs commercial retail chain distinction

SPC distinguishes:

• small retailer contracts (consumer protection applies strongly)
• large B2B merchandising agreements (freedom of contract stronger)

IV. SPC Policy Direction (Important Trend)

The SPC’s recent guidance on service/prepaid disputes shows:

A. Strong consumer protection expansion

• refunds favored when service unclear
• burden shifted to service provider

B. Anti-abuse stance

• crackdown on “fake service billing”
• closure evasion punished

C. Evidence-based adjudication

• digital records (photos, POS systems, installation logs) are crucial

V. Conclusion

Although SPC does not isolate “retail visual merchandising fee disputes” as a standalone category, it consistently adjudicates them under:

• service contract disputes
• prepaid consumption disputes
• commercial decoration/display contracts

Core SPC doctrine:

“No proven service → no enforceable fee”

and

“Failure to achieve retail display purpose → right to terminate and refund”