Cheonan Love Gift Certificate Contributes to Increased Sales for Small Businesses

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A study has found that the local currency of Cheonan City, Chungnam, the 'Cheonan Sarang Gift Certificate (Cheonan Sarang Card)', contributes to increasing sales for small business owners and revitalizing the local economy.

The local currency of Cheonan, Chungnam, known as the "Cheonan Sarang Gift Certificate (Cheonan Sarang Card)," has been found to contribute to increased sales for small businesses and the revitalization of the local economy, according to a recent study.

The city conducted a research project analyzing the usage of the Cheonan Sarang Gift Certificate and assessing the effectiveness of its policies by utilizing big data from payments made with the Cheonan Sarang Gift Certificate and three major credit card companies (NH Nonghyup, KB Kookmin, and Samsung) over a four-year period from 2020 to 2023.

The study found that a total of 1.6414 trillion won worth of Cheonan Sarang Gift Certificates have been issued since its launch in April 2020, and the amount used during the same period reached 1.7562 trillion won as of June this year.

After the issuance of the Cheonan Sarang Gift Certificate, the combined consumption of the three card companies from May to July 2020 was 638.9 billion won, an increase of 15.9% or 87.9 billion won compared to 551.9 billion won in the period from January to March, before the introduction of the gift certificate.

It was also analyzed that when consumers used the cashback they earned from purchases within the region, it helped prevent the outflow of local funds and greatly contributed to establishing a virtuous cycle in the local economy.

In fact, during the three months from May to July after the issuance of the Cheonan Sarang Gift Certificate, 46.3 billion won was spent at small business stores, and spending with the three credit card companies also increased. During the same period, the three card companies recorded 334.3 billion won in spending, a 17.2% or 49.1 billion won increase compared to the previous three months.

This trend has continued even after the end of the COVID-19 pandemic.

Last year, out of an estimated 6.1 trillion won in card spending in Cheonan, 512.6 billion won was spent using the Cheonan Sarang Gift Certificate, accounting for 7.7% of all payment-based consumption. Of this, 400.8 billion won was spent at small business stores, indicating a significant effect in supporting small businesses.

Especially since last July, when usage at affiliated stores with annual sales exceeding 3 billion won was restricted, 90% of gift certificate consumption this year has been concentrated among small businesses. The study also found that when the payment limit was raised to 500,000 won, small business sectors benefited more than when it was increased to 800,000 won.

Looking at the main areas of usage, the restaurant industry is the sector with the highest consumption, and its share has been increasing every year.

The proportion of restaurant industry spending out of the total Cheonan Sarang Gift Certificate usage rose steadily from 25.3% in 2021 to 27.2% in 2022, 29.6% last year, and 32.7% in the first half of this year. This was followed by retail business at 15.4% and private education institutes at 15.1%.

A city official stated, "This research has confirmed that the Cheonan Sarang Gift Certificate plays a major role in revitalizing the local economy," and added, "We will continue to work hard to ensure the Cheonan Sarang Gift Certificate remains a great support for citizens and small business owners."