They want a deposit even for cups picked up on the street... When can we do business?

Complaints Flood Over June Launch of Single-Use Cup Deposit System
Refund of 300 Won Possible at Other Stores Without Beverage Purchase

Industry: "Operational Paralysis and Additional Hiring Burden"
Introduced in 2003, Low Return Rate
Failure in 5 Years, Concerns of Recurrence

Citizens are using disposable cups. Photo by Dongju Yoon doso7@

[Asia Economy Reporter Seungjin Lee] Wi Nayoon (41, pseudonym), who runs a franchise bakery near Gangnam Station in Seoul, expressed frustration at the news of the reinstatement of the disposable cup deposit system, saying, "It's like being told not to do business." Wi said, "If the deposit system is reinstated, the whole day will be spent just on returns," adding, "People around me are already talking about closing the business and going around picking up disposable cups."

On the 25th, the Ministry of Environment announced the legislative notice of amendments to subordinate laws in the resource circulation sector, including the Enforcement Decree of the Act on the Promotion of Saving and Recycling of Resources, which requires a 300 won deposit when using disposable cups and a refund of 300 won upon return. Over 38,000 franchises nationwide are strongly opposing this as desk-bound administration.

"When will we do business?"

The industry is concerned about the increased workload related to collecting disposable cups. It is not just about accepting cups; procedures such as refunding the deposit and verifying whether the cup qualifies for a deposit refund are necessary. A counterfeit prevention sticker produced by the Korea Minting and Security Printing Corporation is attached to the cup surface, and barcode recognition POS devices will be installed in stores to verify this.

What is particularly problematic is that the deposit can be refunded when the cup is returned to the store where the beverage was purchased or to another franchise store subject to the deposit system. Even cups picked up from the streets can be returned for a refund. This could lead to situations where a beverage is purchased at Starbucks and the cup is returned at the nearby Tous Les Jours. Compared to franchise cafes where typically 5 to 6 employees work, bakeries with only 1 to 2 employees may feel a relatively heavier burden from deposit refund tasks.

A franchise industry official explained, "Concerns about part-time labor costs are already emerging at franchise stores nationwide," adding, "Given the characteristics of each location, the workload related to disposable cup returns will vary greatly, and the headquarters is at a loss as to how to handle this."

Could Repeat 2008

The industry also points out issues with the disposable cup return rate. Previously, in 2003, a disposable cup deposit system was implemented at fast food and coffee shops but ended in failure in 2008, just five years after introduction. This was because the return method was inconvenient, resulting in a return rate of only 40%. Although this time efforts have been made to maximize consumer convenience, the industry remains skeptical.

Starbucks operates 'Eco Stores' without disposable cups at 12 locations in Seoul. Since December 7 last year, all Starbucks stores in Jeju Island have been operating as Eco Stores. The return rate for reusable cups at Starbucks Eco Stores is only 70%. Despite extensive promotions and the installation and improvement of cup return devices and systems, 30% of cups are still being discarded.

Another franchise industry official said, "There is no way to know how consumers will accept the 300 won deposit, and the government is pushing forward unilaterally without deep discussions," adding, "Although detailed discussions will take place in the future, there are numerous issues such as POS system improvements, standardization of disposable cup sizes, and collection methods."