Refund Crisis Leads to Prison Sentences for Representative Siblings... Merge Point Ultimately Ceases Service

"Temporary Suspension in June... Resumption Date Undecided"
"Waiting for Corporate Partners to Assist"

Following a large-scale refund suspension incident and the imprisonment of its executives, the prepaid discount service 'Merge Point' will suspend its application (app) service. The disruption in service operation is due to the absence of management.

On the 25th, Merge Point announced, "We have been struggling to operate the service due to the absence of responsible management. A small number of staff have been sustaining the service without pay, but we have determined that continued operation is no longer possible, so the service will be temporarily suspended after 6 PM on Friday, June 28, 2024."

They added, "After the suspension date, app access may be difficult, and purchasing online/offline affiliated service gift certificates will also be unavailable. The resumption date is undecided, and we ask for your understanding regarding difficulties in responding to refund inquiries due to the absence of responsible personnel."

The headquarters of 'Merge Point' in Yeongdeungpo-gu, Seoul.
Photo by Hyunmin Kim kimhyun81@

Merge Point stated, "We tried to maintain the service until the responsible person returns. We deeply apologize for the inconvenience caused. We are waiting for contact from corporate partners who can help us resume the service for Merge customers."

Merge Point is a prepaid discount gift certificate sales service. It gained popularity by offering a high discount rate of up to 20%, but lacked a clear profit structure, resulting in significant accumulated losses.

Ultimately, from May 2020 to August 2022, losses accumulated to the extent that normal business operations became impossible. However, the sibling executives did not disclose this and were indicted on charges of defrauding 2.521 billion KRW worth of Merge Money from 570,000 people. Up to this point, Merge Plus had been sustaining itself through a so-called 'Ponzi scheme,' selling 10,000 KRW worth of gift certificates for 8,000 KRW.

The sibling executives, Namhee Kwon, CEO of Merge Plus, and her younger brother Bogun Kwon, Chief Strategy Officer (CSO), had their prison sentences finalized in October last year, receiving 4 years and 8 years respectively in the third trial. Additionally, Merge Plus corporation was fined 10 million KRW, and CSO Kwon was ordered to pay a confiscation of over 5.3 billion KRW.