The Korea Fair Trade Commission will begin reviewing revisions to the standard terms for new-type gift certificates, which have been maintained for 10 years, prompted by the refund controversy over Starbucks Korea's prepaid cards.
The Korea Fair Trade Commission (FTC) said on the 25th that, prompted by the current Starbucks situation, it will conduct a comprehensive review of the standard terms for gift certificates. The terms were established in 2015 and require consumers to use at least 60% of the reloaded amount to be eligible for a refund. The Korea Fair Trade Commission (FTC) is examining various options, including easing the refund conditions.
The controversy began with Starbucks Korea's refund policy. As a boycott of Starbucks spread after it held a "Tank Day" event on the May 18 Democratization Movement memorial day, consumer complaints about the "60% rule" grew. Last year, the amount of prepaid reloads on Starbucks Cards reached 427.5 billion won.
Still, the Korea Fair Trade Commission (FTC) is weighing the issue carefully. Lowering the refund threshold could increase illicit practices such as so-called "card kiting," which immediately converts gift certificates into cash. In addition, revisions to the standard terms would apply uniformly not only to Starbucks but to all industries that handle new-type gift certificates, raising concerns that the burden could be shifted onto small business owners such as franchisees.
Under the current terms, full refunds are allowed only when the issuer is at fault, such as being unable to provide goods or narrowing the places of use. Cases where consumers refuse to use the service due to a corporation's social or moral issues, as in this instance, are not included.