Weekend Golf Course Cancellations Free 4 Days in Advance... 10% Fee Charged 3 Days Before Use

Fair Trade Commission Revises 'Standard Terms and Conditions for Golf Course Use'

[Asia Economy Sejong=Reporter Dongwoo Lee] Until now, individual golf courses had their own penalty standards for cancellations, but going forward, penalties will be imposed differentially within the range of 10-30% of the team-based golf course usage fee. Additionally, cart usage fees will be separated from the golf course usage fees, and the course usage fees will be used as the basis for penalties and reservation deposits to prevent disputes.

The Fair Trade Commission announced on the 18th that it has revised the "Standard Terms and Conditions for Golf Course Use" to maintain sound transaction order and prevent consumer damage in golf course usage. The standard terms and conditions are a kind of model contract distributed by the Fair Trade Commission by sector, and businesses are not required to follow them. However, starting next year, public golf courses designated as such will need to use the standard terms and conditions to receive various tax benefits such as exemption from individual consumption tax, so their use is expected to expand.

According to the revised standard terms and conditions, if the reservation date falls on a weekend or public holiday, cancellations made up to four days before the usage date will not incur penalties (reservation deposit refunded). Cancellations made 2-3 days prior will incur a penalty of 10% of the team-based golf course usage fee, 20% one day before, and 30% on the day of use.

The team-based course usage fee is the basic golf course usage fee excluding additional costs such as cart usage fees and shower facility fees, multiplied by the number of expected users. If the usage date is a weekday, no penalty is charged up to three days before, 10% of the usage fee two days before, 20% one day before, and 30% on the day of use.

The previous standard terms and conditions also stipulated no penalty up to four days before on weekends, but required a penalty of 5% of the entrance fee (50% of the reservation deposit) 2-3 days before, and 10% (100% of the reservation deposit) one day before and on the day of use. However, the lack of a clear definition of "entrance fee" caused disputes, and the penalty levels were lower than those commonly applied in practice, leading many individual golf courses to apply their own penalty standards instead of the standard terms and conditions.

According to a golf course usage survey released last year by the Korea Consumer Agency, among 110 golf courses that impose penalties for cancellations, 107 (97.2%) charged penalties exceeding 10% of the total usage fee. Twenty-three courses (20.9%) charged penalties exceeding 100% of the total usage fee. Of the 460 golf course-related consultations received by the 1372 Consumer Counseling Center last year, 90 cases (19.6%) involved excessive penalty charges for reservation cancellations.

A Fair Trade Commission official said, "Some businesses have charged 100% of the usage fee as a penalty or arbitrarily set entrance fees. For businesses that charged the team-based golf course usage fee as an entrance fee, the penalty level under the standard terms and conditions will increase from 5-10% to 10-30%. However, as more businesses use the standard terms and conditions reflecting realistic penalties, cases of excessive penalty charges will decrease, and overall market penalties are expected to decline."

The revised standard terms and conditions exclude additional costs such as cart usage fees from the fees that serve as the basis for golf course reservation deposits and penalties. Also, if a business cancels a reservation due to circumstances at the golf course, it must compensate the user with a penalty of 10-30% depending on the cancellation date. Furthermore, a new obligation clause prohibiting "forced purchase of goods or food and beverages" has been added to prevent businesses from making reservations conditional on using clubhouse restaurants or forcing customers to use the geuneuljip (a place selling food and beverages located midway through the golf course holes).