Hundreds of merchants selling goods on the online shopping platform Temu protested outside the e-commerce giant's Guangzhou headquarters on July 29, over claims that the company had levied excessive fines against vendors for customer returns. 

Speaking to Reuters, one merchant claimed that the new penalties can amount up to five times the original value of a sale when a customer returns a purchase for a refund.

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Temu said in a statement that most of the protesters were garment sellers who also operate on Shein and it is actively working with the merchants to find a solution.

"These merchants have declined to resolve the disputes through the normal arbitration and legal channels stated in the seller agreements," the statement said, adding the merchants were unhappy with how it handled after-sales issues related to quality and compliance of their products.

 The company also clarified that the fines "are necessary to maintain a high-quality marketplace," and have largely been centered around refunds related to complaints over the quality of products.