Korea Consumer Agency, Distribution Status Survey Results
As the mobile gift card market continues to grow, consumer complaints have been raised due to short expiration periods limiting usage.
On the 5th, the Korea Consumer Agency reported that a survey conducted from October 1 to 13 last year on the distribution status of 215 product-type mobile gift cards sold at 14 major online malls revealed many cases where the short validity period restricted gift card use and additional costs had to be paid when product prices increased.
Over the past 3 years and 8 months (January 2019 to August last year), there were 162 damage relief requests related to product-type gift cards. By type of damage, the most common was difficulty using gift cards due to expiration, with 94 cases (58.0%). Refund restrictions, such as refunds in points instead of cash, accounted for 22 cases (13.6%), and usage restrictions demanding additional fees due to sold-out items or price increases were 15 cases (9.3%).
The standard terms and conditions for new types of gift cards stipulate that, except for certain exceptions, the validity period should be at least one year to facilitate consumer convenience. However, the survey found that short-term gift cards with validity periods under one year numbered 134 (62.3%), the largest group, followed by 64 cards (29.8%) with a one-year validity. Short-term gift cards under one year included coffee, chicken, and hamburgers, which do not fall under the exceptions in the standard terms, yet had short validity periods of 3 months (119 cards, 55.3%) or 1 month (9 cards, 4.2%). Regarding the possibility of extending the validity period, 179 cards indicated it was possible, but 22 cards stated extensions were not allowed. Fourteen cards did not display related information.
The standard terms prohibit charging consumers additional fees for any reason, including raw material price increases. However, when investigating gift cards based on 83 brand companies, only 3 companies (3.6%) stated that no additional payment was required even if product prices rose. Fifty-eight companies did not indicate whether additional fees would occur, and 11 companies stated that additional fees must be paid.
Regarding refund policy display based on 13 gift card issuers, Kakao displayed on all its gift cards that a full refund is possible if exchange is impossible due to sold-out items. In contrast, the other 12 issuers either did not display refund information when product exchange was impossible or indicated that exchanges were possible at the same or higher price, showing inconsistencies in display even among gift cards from the same issuer depending on the online mall or gift card, indicating a need for improvement.
Based on this survey, the Korea Consumer Agency plans to recommend to gift card issuers ▲ extending gift card validity periods to at least one year ▲ full refunds of purchase amounts in case of sold-out items or price increases ▲ and displaying whether gift card payment guarantees are provided.
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