Hyundai Department Store has revamped its department store mileage system this year, leading to complaints among consumers. The mileage system allows customers to earn up to 1 point for every 1,000 won spent, and rewards (gift certificates) are given back once a certain number of points is accrued.
This revision seemingly prioritizes consumers by doubling the percentage returned as rewards at first glance. However, there are evaluations that it has become more difficult to receive rewards due to a restructuring of the brands eligible for mileage accrual.
According to related industries on the 9th, Hyundai Department Store has changed the mileage-earning brands and the reward standards since the 1st.
Hyundai Department Store has categorized mileage accrual into two categories: luxury goods and fashion&life. When purchasing with a Hyundai Department Store card or cash, customers earn 1 point for every 1,000 won spent, while purchases made with gift certificates or other cards only yield 0.2 points per 1,000 won. This applies regardless of whether the consumer buys from a brand classified as luxury goods or one classified as fashion&life.
However, the criteria are different when receiving rewards.
Assuming 1 point is earned for every 1,000 won spent, last year, purchasing luxury goods worth 10 million won provided a gift certificate worth 150,000 won, and buying 20 million won worth gave a gift certificate worth 300,000 won.
Fashion&life mileage offered gift certificates based on points segmented. For instance, if a consumer spent 50 million won at fashion&life brands over a year, they would receive 500,000 won; if they spent 70 million won, they would receive 1.25 million won. If they spent 100 million won, they would receive 2.5 million won; for 200 million won, 5 million won; and for 300 million won, 9 million won.
Hyundai Department Store's mileage system has faced criticism among consumers. Observing the luxury goods mileage, it translates to about 1.5% of the amount spent annually on luxury brands being given back as gift certificates, while other department stores like Shinsegae and Lotte generally offer around 3%.
For instance, assuming a 'Jasmine Black' customer, the highest tier of VIP at Hyundai Department Store, predominantly shops at luxury brands for a year, the rewards returned from Hyundai Department Store would be about 2 million won less compared to other department stores.
In a competitive environment among department stores to attract VIPs, Hyundai Department Store also altered its mileage system this year. The percentage returned as rewards for luxury goods mileage has been raised to 3%, similar to other department stores.
However, feedback has emerged that for VIP customers primarily purchasing from high-end brands known as 'A·L·C' (Hermès, Louis Vuitton, Chanel), the changes in mileage have become more inconvenient. This is due to a significant number of brands previously classified as luxury goods being reclassified into the fashion&life category.
Previously, over 80 brands could earn luxury goods mileage such as Hermès, Chanel, Louis Vuitton, Dior, Goyard, and Rolex. However, this year, only 12 brands qualify for luxury goods mileage.
High-end watch brands like Rolex, Vacheron Constantin, and IWC, as well as jewelry brands like Graff and Boucheron, are now categorized under fashion&life mileage. Last year, spending 100 million won on fashion&life brands would yield a gift certificate worth 2.5 million won, but this year it has been reduced to 1.5 million won. The gift certificate for spending 200 million won has decreased from 5 million won last year to 3 million won this year.
The minimum point requirement for receiving luxury goods mileage gift certificates has also increased from 10,000 points last year to 15,000 points this year. Therefore, the minimum amount spent on luxury brands over the year has risen from 10 million won to 15 million won.
One consumer using Hyundai Department Store said, "While the new benefits might be favorable for top-tier VIPs who primarily consumer high-end luxury brands, it seems that the benefits have almost disappeared for lower-tier VIPs."
Another consumer noted, "I have primarily purchased high-end watches until now, but starting this year, watch brands are classified as fashion&life brands instead of luxury brands, so it seems the rewards I can receive will be less than last year," adding, "I need to carefully calculate mileage accrual and potential rewards to plan my purchases."
In response, a Hyundai Department Store official stated, "For luxury goods mileage, we doubled the reward rate centered around high-end luxury brands, and we significantly expanded the eligible brands for the unique fashion&life mileage we operate in the industry." They further remarked, "While there may be some differences in reward rates by brand, the overall benefits returned to customers remain nearly unchanged."