Overseas Direct Purchase but No Contact?... Apply for a 'Chargeback' with Your Card Company [Gihayeong's Everyday Card Tips]

To Prevent Additional Fees on KRW Payments
Subscribe to the 'Overseas KRW Payment Blocking Service'
If Seller Stops Contact... Apply for 'Chargeback Service'

Is there anyone these days without at least one credit card? In modern society, anyone can have a card if they want. Credit cards have brought unparalleled convenience to daily life. Now, wherever you go, you can easily see people paying with credit cards or smartphones. As demand has increased, cards with various benefits are being released almost daily. In response, Asia Economy delivers various stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, including introductions to new cards, behind-the-scenes industry stories, and guides for card beginners.

[Image source=Yonhap News]

As the year-end approaches, many of you have shopped through overseas direct purchase, right? Especially in November, global shopping events like Guanggunje, Black Friday, and others take place. According to the Korea Customs Service, the amount spent on overseas direct purchases from Korea last year was $3.75376 billion (KRW 4.4894 trillion), which is 2.3 times more than four years ago. This shows that overseas direct purchase has become widespread, and a similar level of overseas direct purchase is expected this year as well. In preparation for the global shopping season, we have summarized important things to know about overseas direct purchase.

To save up to 8% in fees... subscribing to the 'Overseas KRW Payment Blocking Service' is essential

If you frequently use overseas direct purchase, subscribing to the 'Overseas KRW Payment Blocking Service' operated by card companies is essential. This service rejects credit or debit card approvals when payment is made in Korean won at overseas merchants. It prevents payments in KRW instead of local currency, thereby avoiding additional fees ranging from 3% to 8%.

When making overseas direct purchases in local currency, the process goes as follows: 'Payment in local currency → conversion to US dollars and billing by global brand card companies (Visa, MasterCard, etc.) → conversion to KRW by domestic card companies and billing to the member.' If you use the 'Dynamic Currency Conversion (DCC)' service, you can pay in KRW instead of local currency, but you must pay an additional fee in exchange for being able to check an approximate amount in KRW beforehand. If the payment amount you check after overseas direct purchase is larger than expected, you may have unknowingly used DCC. Especially since DCC can be set automatically, it is necessary to check whether it is automatically enabled on overseas direct purchase sites.

If the credit card receipt shows an amount in KRW in addition to the local currency amount after payment, it means DCC was used. You should cancel the payment and request to pay again in local currency. This will prevent paying additional fees of 3% to 8%.

Since July, the card industry has been informing customers of fees incurred from overseas KRW payments and requiring applicants to choose whether to use the blocking service when issuing new credit or debit cards that can be used overseas, to prevent unwanted overseas KRW payment fees.

If the seller cuts off contact... apply for the 'Chargeback Service'

Also, if the seller cuts off contact after card payment, making it difficult to check delivery status or if a refund is not made, you can apply for the 'Chargeback Service' with the card company. This service allows consumers to request cancellation of an already approved transaction in international trade when they suffer damage due to loss of contact with the business operator. When applying for the chargeback service, you must prepare evidence such as transaction details, payment records, and emails exchanged with the business operator.

Furthermore, overseas card payments can only be made in a lump sum, but if the amount is burdensome, you can request installment conversion from each card company. However, in this case, you must bear the installment fees for the installment payment.