Revision of the Standard Terms and Conditions for New-Type Gift Certificates
– Refund rate for gift certificates over 50,000 KRW raised from 90% to 95% –
– 100% refund available when refunded as reward points instead of cash –
The Korea Fair Trade Commission (KFTC) has revised the Standard Terms and Conditions for New-Type Gift Certificates to promote fair trade practices in the new-type gift certificate market and to prevent consumer harm.
This revision is part of the co-prosperity measures developed by the Public-Private Council on Mobile Gift Certificates, launched in April last year. It reflects consumer concerns over existing refund fees and aims to establish a reasonable standard for refund charges.
In November last year, the KFTC began revising the standard terms following a formal request from the Korea Consumer Organizations Council (KCOC). During the process, the KFTC actively collected opinions from both consumer and business groups. By considering both sides’ perspectives, the Commission developed a balanced refund standard that reduces consumer burden while avoiding shrinkage of the mobile gift certificate market.
(Note: The KCOC is an umbrella organization representing consumer groups. It works to enhance consumer rights through activities such as complaint handling, damage relief, consumer education, policy research and proposals, and price monitoring.)
Under the previous standard terms, if a new-type gift certificate expired unused, consumers could receive only 90% of the purchase amount, with 10% deducted as a refund fee.
To allow consumers to receive more, the KFTC revised Articles 5 and 7 of the Standard Terms, setting differentiated refund rates based on the gift certificate amount and refund method, allowing refunds of up to 100%.
First, for gift certificates worth over 50,000 KRW, the refund rate has been raised from 90% to at least 95%. Typically, certificates worth 50,000 KRW or less are product-specific vouchers (for a designated good or service), while those over 50,000 KRW are monetary-type vouchers that can be used flexibly within their balance. Since product-specific vouchers are more likely to be redeemed promptly, the KFTC decided to maintain the current refund rate for these, while increasing the rate for high-value, monetary-type certificates to reduce consumer costs.
Additionally, when consumers choose to receive refunds in reward points instead of cash, they may now receive 100% of the remaining balance, regardless of the certificate’s amount. This measure reflects that both consumers and small businesses may benefit more from allowing the full amount to be reused for purchases rather than partially deducted refunds. Consequently, if a gift certificate issuer operates a point or mileage system, consumers can receive a full-value refund in reward points without any financial loss.
Through this revision, the refund structure for new-type gift certificates has become more reasonable. Consumers will now receive larger refunds, and refund-related disputes are expected to decline. The introduction of full refunds via reward points is also expected to foster a mutually beneficial market environment for both consumers and businesses.
The KFTC will publish the revised standard terms on its website and notify relevant business and consumer organizations, encouraging all companies to adopt them. The revised terms are recommended for implementation starting September 16.
The KFTC also plans to continue listening to on-site feedback and will keep revising and developing standard terms closely related to people’s daily lives to strengthen consumer rights and sovereignty.