Shinsegae Gift Certificates Bought 5% Cheaper via Secondhand Trade
Converted to SSG Money on Emart App
Paid through Seoul City Tax Payment App
Up to 60,000 KRW Tax Savings Per Person
[Asia Economy Reporter Jeon Jinyoung] The household account book of a woman in her 30s, Ms. Lee, has consistently recorded purchases of ‘Shinsegae gift certificates’ since last April. Ms. Lee bought Shinsegae gift certificates about 5% cheaper than the market price through secondhand trading platforms such as Danggeun Market. Considering the property tax payment date in July, she steadily purchased and saved the gift certificates in advance. By paying this property tax with Shinsegae gift certificates, she was able to save 100,000 won. Ms. Lee said, "If you put in a little effort, you can buy gift certificates on secondhand trading platforms at more than a 5% discount," adding, "Using gift certificates to pay taxes is already a tax-saving tip used by people who want to save money."
As the number of frugal consumers looking for ways to save even a little in this high inflation era increases, buying Shinsegae gift certificates cheaper than the face value and paying taxes with them has emerged as a tax-saving tip. This method is being shared in ‘frugal tech’ communities in line with the property tax payment period.
For example, if a couple jointly owns an apartment in Yeouido with a publicly announced land price of 2.1 billion won, the property tax to be paid from the 16th, including local education tax, is 2.64 million won. The limit for paying taxes with Shinsegae gift certificates is 1.2 million won per person, which increases to 2.4 million won for a couple with joint ownership. If the gift certificates were purchased at 5% below market price, each person can save up to 60,000 won, meaning the couple can save up to 120,000 won.
SSG.com currently operates under the concept of franchisees in Seoul and Busan. Therefore, in Seoul and Busan, Shinsegae gift certificates can be converted into SSG Money, SSG.com’s cyber money, to pay taxes. Lotte also provided a service to pay taxes with L.Point, but it ended in February 2020, making SSG.com the only provider of such a service in the distribution industry currently.
People who need to pay property tax in Seoul can purchase Shinsegae gift certificates about 3-5% cheaper than market price through secondhand trading platforms or private gift certificate exchanges, then convert the gift certificates into SSG Money via the Emart application (app) and register them. After that, by clicking ‘Import SSG Money’ in Seoul’s tax payment app ‘STAX,’ they can load the SSG Money, convert it into mileage, and pay the property tax on their behalf.
The cheaper the gift certificates are purchased, the more tax can be saved. Therefore, from July to September, when property tax payments are due, more people gather gift certificates by visiting secondhand trading platforms or gift certificate exchanges. Gift certificate exchanges located in areas like Myeongdong also start to get crowded with office workers during the property tax payment period from July to September. In fact, posts offering to buy 1 million won worth of Shinsegae gift certificates at once appear several times a day on secondhand trading platforms around the property tax payment dates.
Among frugal consumers, paying property tax with Shinsegae gift certificates is considered the method that offers the greatest savings, but there are also ways to utilize local tax payment benefits offered by credit card companies. Most major credit card companies do not charge fees when paying property tax by card and offer 2 to 6 months of interest-free installments. Some card companies also provide cashback or points equivalent to 0.17-0.20% of the payment amount.
Professor Ahn Changnam of the Taxation Department at Gangnam University said, "With rising prices and more people buying homes by leveraging all their assets (‘Yeongkkeul’), property tax payments inevitably become a burden," adding, "Consumers are evolving to become smarter. They have started devising legal and wise ways to save money." Professor Ahn added, "However, since tax revenue is lost as gift certificates are purchased cheaply, the government should consider other methods, such as imposing taxes at the time of gift certificate transfer."
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