Usage Locations for Local Love Gift Certificates, Reorganized to Focus on Small-Scale Small Business Owners

Usage Reorganization, Purchase Limit Reduction, etc.

[Asia Economy Reporter Kiho Sung] The Ministry of the Interior and Safety announced on the 22nd that it has established the 2023 revised guidelines for local love gift certificates, focusing on improving usage centered on small business owners to enhance support for small business owners and the effect of revitalizing the local economy, and notified local governments accordingly.

First, the usage of local love gift certificates will be reorganized to focus on small business owners. Until now, small and medium-sized enterprises (SMEs) could register as affiliated stores for local love gift certificates by law, which caused issues where gift certificates were used in places difficult to consider as small business owners, such as large hospitals and large marts. To address this issue, considering the legal standards for small business owners, only those with annual sales of 3 billion KRW or less will be allowed to register as affiliated stores, and depending on the conditions of each local government, industries that do not align with the purpose of supporting small business owners will also be restricted as recommended. Through this, local love gift certificates can be used at relatively small-scale small business owner stores, concentrating limited resources on supporting small business owners.

Additionally, the purchase limit and holding limit per person for local love gift certificates will be reduced. Previously, the purchase limit per person was set differently by local governments within a range of up to 1 million KRW per month, and there was no separate limit on holding amounts, which led to cases where gift certificates were purchased in large quantities, accumulated, and then used at once for expensive goods and services, contrary to the policy intent. Going forward, local governments will set the purchase limit per person within a range of up to 700,000 KRW per month and the holding limit within a maximum of 1.5 million KRW, encouraging gift certificates to be used more frequently at more small business owner stores. It is expected that this will support more small business owners and also increase the effect of circulating funds and stimulating consumption within the region.

Furthermore, the upper limit of the discount rate for local love gift certificates will be adjusted flexibly. Until now, the discount rate was basically limited to within 10%, with a temporary increase allowed up to 15% in exceptional cases such as holidays, but there was difficulty in responding flexibly in urgent cases such as large-scale disasters requiring damage support. Going forward, the Ministry of the Interior and Safety will basically limit the discount rate to within 10%, but in exceptional cases, it will apply differentiated discount rates according to specific situations, actively supporting sufficient discount rates for local economic revitalization when an increase in the discount rate is necessary due to disaster situations.

Choi Byung-kwan, Director of the Local Finance and Economy Office at the Ministry of the Interior and Safety, stated, “This guideline revision focuses on making local love gift certificates more helpful to a greater number of small business owners,” and added, “The Ministry of the Interior and Safety will continue to promote institutional improvements to ensure that local love gift certificates align with the purpose of supporting small business owners and revitalizing the local economy.”