Delivery app cancellation abuse harms small businesses

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Frustrating Experiences of Small Business Owners Due to Refund Abuse

A bakery owner in Incheon’s Seo-gu District, who operates under the alias A, recently shared a distressing experience involving multiple refund requests for orders of “Dubai Chewy Cookie (dujjonku)” placed through a food delivery platform. This situation has become increasingly common, with cases of abuse related to the platform’s “easy order cancellation” feature causing significant challenges for both delivery platforms and small business owners.

A revealed on social media that the issue began about a week ago when they faced repeated order cancellations. During a busy period driven by the popularity of the Dubai Chewy Cookie, an order for eight dujjonku and one coffee came in through the platform. A took precautions by sealing the beverage to prevent spills, placing it in a carrier, and sending it for delivery. However, they soon received a cancellation notice from the platform. When A inquired about the reason, they were told that the beverage had spilled, making the food inedible, and a full refund was processed. A initially thought the issue might have occurred during delivery and felt apologetic for the inconvenience.

A few days later, the same order came in again. To avoid similar issues, A split the order into two separate deliveries: one for the dujjonku and another for the coffee. However, they soon received another call stating the beverage had spilled, resulting in another refund. Unable to accept this, A requested the return of the remaining food. The platform responded that the customer’s phone was off and that due to the customer’s stance, they couldn’t strongly request proof photos or retrieval.

Three days later, A received an order for nine dujjonku. Although they couldn’t confirm the customer’s identity, the order history showed three previous attempts. A sent ten dujjonku, adding one as a service. Yet, another cancellation notice arrived. This time, the customer claimed the packaging was torn open, making the cookies inedible, and demanded a refund to order from another place. The platform requested proof photos, but the customer reportedly replied that they had thrown them in the trash because their dog might eat them, so there were no photos.

A was compensated for the losses incurred, excluding platform fees and delivery costs. However, A expressed frustration: “Some might think compensating financially solves the issue, but when I asked the platform to confirm if the same person canceled three times, they said it was difficult. When I requested to block the customer, they said there was no such system.” A added, “I understood their explanation, but I couldn’t shake the feeling that the platform is neglecting situations where business owners and riders might suffer from mistakes they didn’t make.” A concluded, “It’s infuriating and frustrating to keep receiving orders and facing cancellations.”

Legal Action Possible Amid Rising Cases of Refund Abuse

Cases of abuse involving delivery platforms’ “order cancellation” feature have surged, not limited to A’s experience. Earlier, a cafe in Gangnam faced repeated cancellations from a plastic surgery clinic, which had set the price of a specific menu item to 500,000 Korean won. As the controversy grew, the clinic issued a public apology. On the 10th, a small business owner running a takoyaki shop in Gwangju also shared their confusion after a customer canceled an order a day after delivery.

Order cancellations often lack proof from customers, and determining responsibility is challenging. Delivery platforms operate loss-compensation systems to protect small businesses if cancellations aren’t their fault. However, business owners argue, “Indiscriminate refund approvals are the root problem.”

Both small businesses and platforms face difficulties, prompting platforms to impose penalties or restrict users caught abusing cancellation features. Legal action is also possible. Lawyer Lee Kwang-min of NTM Law Firm stated, “If intentional cancellation is proven, even a single instance could constitute fraud.” Lee added, “Even if the business is compensated, excessive cancellations causing harm could qualify as obstruction of business.” However, Lee noted, “Proof is often difficult, and legal action may be burdensome.”

Harm to Other Consumers Through Intentional Cancellations

Professor Lee Eun-hee of Inha University’s Consumer Studies Department highlighted that such deviant consumer behavior harms not only platforms and small businesses but also other consumers. Lee explained, “If costs rise due to intentional cancellations, delivery fees and platform commissions could increase, creating unfavorable conditions for small businesses. This ultimately affects other consumers.”

Lee warned, “Unconditional refund approvals by platforms may encourage ‘problem consumers.’” Lee suggested, “Warning systems should be introduced to control customers who intentionally and habitually cancel orders.” Lee added, “Consumers with strong rights awareness but weak responsibility—so-called ‘black consumers’—must fulfill their duties, such as taking proof photos, under the principle of good faith.”