Kakao Earns 71.7 Billion KRW in Refund Fees from 'KakaoTalk Gift' Over 5 Years

[Asia Economy Reporter Kang Nahum] Kakao is estimated to have earned 71.7 billion KRW solely from refund fees on 'KakaoTalk Gift' over the past five years.

According to the results of the 'Online Gift Service Market Size Survey' submitted by the Fair Trade Commission to Yoon Kwan-seok, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, Kakao recorded a transaction amount of 2.5341 trillion KRW last year and accounted for 84.5% of the entire online gift service market.

The total refund amount for Kakao Gift over the past five years was 717.6 billion KRW, and calculating 10% as the refund fee, it is estimated that Kakao earned approximately 71.7 billion KRW.

Considering that the gift service market size has been growing year by year, it is also estimated that Kakao collected about 25.4 billion KRW from refund fees alone last year. Looking at the 'ratio of refund amount to transaction amount by year,' it appears that one out of every ten users requested a refund on Kakao Gift each year.

Assemblyman Yoon pointed out that Kakao Gift refunds take a long time and the fees are excessive, calling for improvements to the Fair Trade Commission's standard terms and conditions.

According to the current Fair Trade Commission standard terms, the right to request a refund for gifticons is given to the 'final holder' of new-type gift certificates (such as gifticons), and only if the final holder cannot request a refund, the purchaser may request it.

On the Kakao Gift app, only the gifticon purchaser (payer) can receive a 100% refund within the validity period, and the recipient of the gift can request a 90% refund only after 90 days have passed.

Since no refund opportunity is given during the 90 days, even if the recipient does not like the gift, they must wait at least three months and pay a 10% fee to request a refund. Considering server operation costs and platform maintenance fees of the gift service system, a 10% penalty on the already paid product amount is excessive. Especially for mobile gift certificates, there are no separate printing costs like paper gift certificates.

Assemblyman Yoon said, "It seems necessary to supplement the regulation design to prevent differences in interpretation of the Fair Trade Commission's standard terms regarding new-type gift certificates," adding, "While correcting the system to guarantee the refund request opportunity for the final holder of new-type gift certificates, in-depth socio-economic discussions on the multi-fee collection structure of large online platform-based companies and efforts to enhance consumer property rights protection should be conducted simultaneously."