Up to 40% Penalty for No-Shows at Omakase and Group Reservations

Up to 70% Penalty for Same-Day Wedding Hall Cancellations

From now on, so-called 'no-show' customers who make reservations at omakase restaurants but do not show up will be charged a no-show penalty fee of up to 40% of the reservation amount.

The Fair Trade Commission announced on October 22 that it will issue an administrative notice of the revised 'Consumer Dispute Resolution Standards,' which include these changes, until November 11.

For general restaurants, the no-show penalty fee is currently capped at 10% of the total amount, but the revised standards double this to 20%. Establishments such as omakase or fine dining restaurants, which prepare ingredients and food in advance based on reservations, are newly classified as 'reservation-based restaurants,' and may set the penalty fee as high as 40%.

General restaurants will also be allowed to charge a 40% no-show penalty fee for large orders or group reservations-such as pre-ordering 100 rolls of gimbap-if this is clearly communicated to the customer in advance. This reflects the fact that the average cost ratio in the food service industry is around 30%.

However, in order to prevent consumer harm, businesses that wish to treat 'late arrivals' as no-shows must inform customers of this criterion in advance.

Yonhap News Agency

If the penalty fee is less than the reservation deposit paid by the customer, the business must return the difference to the customer. Depending on when the customer notifies the business of the cancellation, the standards specify full, 50%, or 25% refunds.

The Consumer Dispute Resolution Standards serve as a guideline for settlement or recommendation in case the parties involved do not express how they wish to resolve a dispute. They are not mandatory when setting penalty fees.

An official from the Fair Trade Commission explained, "Because the existing penalty fee was only 10%, some black consumers repeatedly engaged in intentional no-shows, prompting some businesses to impose excessive penalty fees of up to 100%, which ended up being even more disadvantageous to ordinary consumers. This revision aims to present realistic standards for businesses to follow, while also allowing for reasonable adjustments during dispute resolution."

The standards for wedding hall cancellation fees, which have been criticized as being out of touch with reality, have also been revised. Under the current standards, canceling a contract from 29 days before the wedding up to the day of the event incurs a penalty fee of 35% of the total cost.

However, in response to concerns that this does not sufficiently compensate for losses such as food disposal, the revised standards set the penalty fee at 40% for cancellations 29 to 10 days before the event, 50% for cancellations 9 to 1 day before, and 70% for same-day cancellations.

The standards related to travel have also been revised. If a natural disaster or similar event makes it impossible to use an accommodation, customers can cancel for free even on the day of the reservation. The revision clarifies that free cancellation applies not only when the disaster occurs at the accommodation's location, but also when it affects any part of the route from the departure point to the accommodation.

Additionally, if a 'government order' is issued, overseas travel can be canceled free of charge. The revision specifies that this refers to a Level 3 (Travel Advisory) or Level 4 (Travel Ban) travel alert issued by the Ministry of Foreign Affairs.

Furthermore, new dispute resolution standards have been established for study cafes, which have recently seen a rise in disputes, and the standards have been updated to reflect recent changes in standard terms and conditions, such as changes to cancellation fees for trains and express buses.

The revised standards are expected to take effect as early as the end of this year after the administrative notice period. The Fair Trade Commission stated, "We have updated the standards to enable fair and smooth dispute resolution in line with changing consumer trends and industry conditions. We will continue to ensure that the Consumer Dispute Resolution Standards, first established in 1985, can flexibly respond to the times and make a practical contribution to protecting consumer rights and improving consumer life."