"Specific Period · 3% Cashback" Daejeon Local Currency Operation Reform

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Daejeon City is revamping the operation method of its local love gift certificates. The core changes include operating the local love gift certificates only during specific periods, limiting the usage amount, and adjusting the cashback rate to 3%.

The city announced the local love gift certificate reform plan on the 22nd. The plan was prepared in line with the recent confirmation of the national government subsidy for local love gift certificates at 8.3 billion KRW.

Kim Young-bin, Director of the Economic Science Bureau, is announcing the local currency reform plan at Daejeon City Hall on the 22nd. Photo by Daejeon City

The main reform points include changing the name of the local love gift certificates, operating them during specific periods such as holidays, and providing differentiated discount rates based on user and merchant sales.

First, the city will change the name of the local love gift certificates from the existing Ontong Daejeon to ‘Daejeon Sarang Card’. However, the new name will apply only to newly issued cards.

Also, as the COVID-19 situation gradually stabilizes, the city judged that investing a large budget is inappropriate, so it plans to operate the local love gift certificates only 5 to 6 times a year during specific periods such as holidays, the 0 o’clock festival, and consumption promotion events.

The usage limit is 300,000 KRW, and users will receive 3% cashback on the amount used within the limit.

However, to alleviate consumption imbalance, the city will provide an additional 7% cashback when welfare recipients and other consumption-vulnerable groups use the local love gift certificates at merchants with annual sales under 500 million KRW, allowing them to receive up to 10% cashback benefits.

The recipients eligible for additional cashback will be finalized in April.

The city plans to resume issuing the gift certificates before May by reflecting the matching ratio of national and city funds and an additional city budget of 20.8 billion KRW in the supplementary budget.

Along with the reform of the local love gift certificate operation, the city will also promote the Daejeon-type small business support project. The support project will be implemented through 27 detailed projects in five areas: ▲ financial safety net including management improvement funds, special guarantee operation, and expanded support for the Yellow Umbrella Mutual Aid Association ▲ a tight support system including big data platform construction and management stabilization fund installation and operation ▲ global alley market including discovering and nurturing local creators and expanding the self-employed growth doctor system ▲ green traditional market including joint delivery system operation, modernization of traditional market facilities, and service advancement ▲ digital transformation including creating model streets in the old downtown commercial district and permanent operation of digital commerce specialized institutions.

A budget of 74 billion KRW, more than three times the previous year, will be invested in these projects.

Kim Young-bin, Director of the Economic Science Bureau of the city, said, “We prepared the reform plan focusing on the city’s financial conditions, minimizing benefits for consumption-vulnerable groups, and protecting small local businesses.” He added, “The city will continue to expand direct support for small business owners and focus the budget on strengthening care for socially vulnerable groups and investing in future generations such as youth and childcare.”