The book culture platform YES24 has suspended the use of the 'cultural gift certificate,' considered one of the leading gift certificates in Korea. Financial authorities urged consumers to be cautious about cultural gift certificates, and earlier, Naver Pay and NHN Payco announced the suspension of cultural gift certificate exchanges. Financial consumers who have experienced issues with T-Money and Merzi Point are currently sharing ways to quickly exchange cultural gift certificates on other platforms that are still in partnership.
According to the financial industry on the 24th, YES24 has suspended the exchange of cultural gift certificates for YES24 gift certificates since the 21st. They cited system checks as the reason but did not disclose a resumption schedule. On the 20th, Naver Pay and NHN Payco each announced the suspension of cultural gift certificate exchanges. Payco, like YES24, has not set a resumption schedule, while Naver Pay announced the complete termination of its partnership agreement.
On the 20th, the Financial Services Commission, the Financial Supervisory Service, and the Fair Trade Commission announced measures and consumer precautions related to the unregistered prepaid business of Culture Gift Certificate Co., Ltd. They stated that Culture Gift Certificate Co., Ltd., which issues cultural gift certificates, continues to operate without being registered as a 'prepaid electronic payment method issuer and manager' as required by the Electronic Financial Transaction Act.
A prepaid electronic payment method refers to services like gift certificates or points that customers pre-charge and use for payment. Companies that issue and manage these services are required to register as prepaid businesses with financial authorities according to electronic financial transaction regulations, but Culture Gift Certificate Co., Ltd. continues operations without registration. Authorities warned that consumer harm could occur when using cultural gift certificates from Culture Gift Certificate Co., Ltd.
Prepaid businesses must manage charged amounts separately at 100% and cannot directly operate prepaid funds. Additionally, the entirety of prepaid funds is protected as the property of users. However, since Culture Gift Certificate Co., Ltd. is not registered as a prepaid business, the obligation to protect prepaid funds under the law does not apply. As a result, consumers may not be able to get refunds for gift certificates even if the company declares bankruptcy or ceases operations. Korea Culture Promotion, the issuer of Cultureland gift certificates (mobile cultural gift certificates), completed its prepaid business registration in October 2021.
In fact, Culture Gift Certificate Co., Ltd. has a poor financial status. The low capital is currently the biggest issue. In 2023, the company recognized a net loss for the current period and had total capital that was negative, indicating capital impairment. Although it reported a net profit last year, the total capital remained only 600 million won, which is significantly low and was due to cost reductions rather than an increase in sales.
Since a stable profit base has not been established, there are risks regarding financial soundness in the long term. The debt ratio amounts to approximately 20,000%, and despite the typical characteristics of the gift certificate industry where liabilities are large due to gift certificate receivables, this level is significantly higher than that of other companies in the same sector. For example, Korea Culture Promotion has a debt ratio of 217%.
Culture Gift Certificate Co., Ltd. noted that there is a difference in views with authorities regarding whether online cultural gift certificates fall under prepaid electronic payment methods as defined by the law. The company has filed a lawsuit at the Seoul Administrative Court seeking a ruling on the non-existence of registration obligations under the Electronic Financial Transaction Act. Additionally, it announced that it has subscribed to an e-commerce consumer damage insurance policy. However, while the disclosed gift certificate deposit amounts to 1.031 billion won, the maximum insurance amount subscribed to by Culture Gift Certificate Co., Ltd. with SGI Seoul Guarantee is 2.4 billion won.