Where Is the Legal Line on Canceling Paid Coffee Orders

Luckin Coffee canceled unusually low-priced orders placed on the Ele.me platform after an operational configuration error, then temporarily suspended online ordering at affected stores. Lawyers disagree on the outcome: one side argues that canceling paid orders may infringe consumer rights, while the other says a major misunderstanding can justify revoking the contract.

If the low pricing was deliberate marketing, lawyers note it could amount to fraud. Consumers reported orders marked as delivered without delivery, waits of more than four hours before cancellation, and missing refunds. Luckin apologized twice on Weibo, promised to bear all losses, and said it would issue compensatory vouchers.

Luckin Coffee encountered abnormally low-priced orders on the Ele.me platform due to an operational configuration error. After a large number of users rushed to place orders, Luckin handled the situation by unilaterally canceling orders and temporarily suspending online operations. This move sparked strong dissatisfaction among consumers and also drew attention from the legal community: one side's lawyers argued that canceling paid orders was suspected of infringing on consumer rights; the other side pointed out that if it was a major misunderstanding, the contract could be revoked in accordance with the law. If there was intentional malicious marketing, it could even constitute fraud. In the end, Luckin promised to bear all losses and issue compensatory vouchers. This article reviews the incident, netizen feedback, and lawyers' views, so that coffee lovers can understand the full picture of this controversy.

A large number of orders suddenly poured in within a short period, and Luckin Coffee immediately shut down the online ordering entrance on the Ele.me platform. Some stores that were overwhelmed by orders and unable to operate also suspended mini-program and counter ordering. That afternoon, mini-program and counter ordering at these stores gradually resumed. Regarding this system loophole, Luckin Coffee issued apology statements via its official Weibo in both the morning and noon periods, and explained the cause of the incident:

Luckin said it had urgently canceled the abnormal orders on the Ele.me platform, and also stated that it would study a user compensation plan and notify users separately. However, the unilateral cancellation of orders drew a great deal of dissatisfaction from netizens. According to feedback from some consumers, among the abnormal orders they successfully placed, many showed as delivered even though they had not been delivered; some waited more than four hours, only for the order to be canceled just like that; and some did not receive refunds after their orders were canceled.

Luckin's explanation at noon was that it was caused by a configuration error by internal operations staff, but netizens did not buy it: if it was an internal mistake, why should customers bear the consequences? Many people said that even if they knew the order volume was large, they would not be in a hurry to drink it, and that the orders could clearly have been delivered in sequence, so why cancel them unilaterally? Was it because they could not afford to play?

In the face of the sudden system loophole and the subsequent series of handling methods criticized as "unreasonable," some netizens suspected that Luckin was engaging in malicious marketing, using the bug to maintain the popularity of its most representative coconut coffee series. Some netizens also raised the question: does unilaterally canceling orders in this way constitute infringement?

In response to netizens' doubts, lawyers held differing views. One lawyer believed that Luckin's unilateral cancellation of orders was suspected of infringement. Citing Article 53 of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests, the lawyer pointed out: "Where a business operator provides goods or services by way of advance payment, it shall provide them in accordance with the agreement. If it fails to provide them in accordance with the agreement, it shall perform the agreement or refund the advance payment according to the consumer's request; and it shall also bear the interest on the advance payment and the reasonable expenses that the consumer must pay." Therefore, canceling an order must be carried out on the premise of mutual agreement between both parties, and a full refund should be made. Once the consumer completes payment and the merchant accepts and processes the order, the contract has been established and cannot be canceled at will.

Some lawyers held a different opinion. According to Article 54 of the same law, if a contract is concluded due to a major misunderstanding, one party has the right to request a people's court or an arbitration institution to modify or revoke it. The discount on the problematic orders this time was less than 10%, a huge gap from the original price, and by common sense this can be deemed a pricing error. The premise for the establishment of a purchase contract is that the merchant and the consumer have reached an agreement, and Luckin's obvious pricing error cannot reflect the merchant's true intention. Although a large number of consumers placed orders, due to the existence of a major misunderstanding, from a legal perspective the contract can be revoked. In other words, if these low-priced orders were indeed caused by a system setting error, Luckin's cancellation of the problematic orders does not constitute breach of contract or infringement.

But it should be noted that if there is evidence showing that Luckin deliberately caused the system setting error this time for malicious marketing, then it is suspected of fraud. According to Article 55 of the Law on the Protection of Consumer Rights and Interests, consumers may demand "a refund plus three times compensation; if the increased compensation amount is less than 500 yuan, compensation shall be 500 yuan."

Another lawyer added: if consumers place orders while knowing it is a merchant's system error, or conclude a contract while knowing that the contract cannot actually be performed, then if the merchant unilaterally cancels the order and refunds the money, the consumers will be deemed to have no actual loss.

Regarding this bug incident, Luckin Coffee stated on its official Weibo on the morning of April 19 (today): regarding the abnormal prices at Luckin's Ele.me stores on the morning of April 18, all losses will be fully borne by Luckin Coffee, and on that day it will successively issue "32 yuan vouchers" to all Ele.me users whose orders were refunded. For users whose orders were canceled yesterday due to abnormal waiting times during the morning rush, Luckin will also compensate them with coupons.

Regarding the follow-up handling of the incident, some netizens said: while compensating customers for their losses, Luckin should also show more concern for the baristas who were busier than ever yesterday because of the operational error.

Image source: Internet, Weibo

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The above content is compiled by CoffeeHunters, a coffee news website.