"Stores Overcharging Emergency Disaster Relief Funds: Pay 4,000 Won More When Using Local Currency"

Extra Charges Demanded as Fees on Emergency Disaster Relief Prepaid Cards
Some Consumers Say "Contrary to Support Purpose... Likely Used for Convenience Stores and Academy Fees" in Small Shops
Lee Jae-myung, Gyeonggi Province Governor, "Will Restrict Merchant Qualifications if Local Currency Discrimination Occurs"

An emergency disaster relief fund information banner hanging at a community center in Jongno-gu, Seoul. Photo by Yonhap News

[Asia Economy Reporter Han Seung-gon, Intern Reporter Kim Yeon-ju] "When I said I would pay with local currency, they told me to pay 10% more.", "Is it reasonable to overcharge under the name of card fees?"

Cases of misuse of the emergency disaster relief funds provided by the government and local governments due to the impact of the novel coronavirus disease (COVID-19) are occurring.

Consumers are raising their voices about the inconvenience caused by some stores demanding extra charges under the name of fees for the emergency disaster relief funds provided in the form of prepaid cards.

Recently, posts have been continuously appearing on online communities, including mom cafes, reporting unfairness or subtle price increases during the process of payment with local currency.

On the 5th, a post titled "I don't want to use local currency because it makes me upset, so I'll just add it to my child's academy fees" was posted on a mom cafe in Gyeonggi-do.

The author of the post claimed, "I stopped by a local store where local currency can be used, and the prices were higher than those at most supermarkets," adding, "I don't think it was like this before, but it seemed like they subtly raised the prices."

They continued, "When I told the merchant that the prices seemed to have gone up, I heard an absurd excuse that it was unavoidable because fees occur due to the relief funds," and criticized, "How can such a system, prepared by the government with good intentions, be abused like this?"

A post uploaded on an online community on the 5th. Photo by Online Community

The main cause of conflicts surrounding the emergency disaster relief funds is card fees. Although the emergency disaster relief funds provided in the form of prepaid cards have lower fee rates than credit cards, small business owners who have been operating cash businesses are reluctant to accept any fees.

The upper limit of credit card merchant fees ranges from about 0.8% to 1.95% depending on sales. From the perspective of small merchants, after deducting card merchant fees and taxes, they receive about 90% of the payment amount.

There are also criticisms not only about passing the fee burden onto consumers but also about charging additional fees when using local currency or lowering the quality of service to give consumers a hard time.

On an online community, a post said, "When I asked if local currency was accepted while ordering pizza from a regular store, the owner's tone turned cold," and "They give me a hard time just because I pay with local currency, even though it's not like I'm spending money I don't have."

The author added, "It's a pizza I order often, but this time they said they would charge extra for the sauce, which was ridiculous," and "I never felt a difference in service when paying with a regular card, but somehow I feel like I'm at a disadvantage when using local currency."

They continued, "Although it's money I can use at the convenience store in front of my house, I wanted to participate in the good cause of revitalizing the local economy, but it just made me upset," and "If you don't ask whether local currency is accepted before ordering and then pay with a card, it feels like you won't be at a loss."

Posts reporting unfair experiences while using the emergency disaster relief funds were followed by numerous comments from netizens sharing similar experiences.

One netizen said, "The florist said it was 36,000 won, but when I said I would pay with 00Pay (local currency), they asked for 40,000 won," adding, "It seems like they think it's free money, so they can raise prices a lot."

Another netizen pointed out, "There were people trying to profit during the mask shortage, and it seems like some are trying to gain profits in the same way with local currency," and "It's sad that local businesses only see the immediate crisis in front of them."

Another netizen emphasized, "Because of the unscrupulous business practices of some stores, even businesses welcoming local currency users are being criticized, which is bitter," and "I think strict punishment is necessary."

Gyeonggi Province Governor Lee Jae-myung. Photo by Yonhap News

As cases of misuse of local currency continue to emerge, Lee Jae-myung, Governor of Gyeonggi-do, emphasized that merchants discriminating against local currency will have their qualifications restricted.

On the 5th, in a post on his Facebook, Governor Lee said, "We cannot leave stores that discriminate against local currency as they are," and warned, "We will first educate local currency merchants, and if specific cases are confirmed, we will restrict their local currency merchant qualifications so they can no longer accept local currency."

He explained, "If a credit card merchant discriminates against users paying with local currency received via credit card (such as refusing transactions or demanding fees), they will inevitably have their merchant registration canceled (Article 19, Paragraph 1 and Article 21 of the Credit Finance Business Act), and the person in charge and the owner may face up to one year imprisonment or a fine of 10 million won (Article 70, Paragraph 4, Item 4 and Article 71 of the Credit Finance Business Act)."

He added, "Local governments have tax investigation authority related to local income tax, and inducing cash transactions by charging additional money for credit cards or local currency instead of cash has no reason other than tax evasion, so it is subject to tax investigation," and emphasized again, "To crack down on local currency fraud, the special investigation team formed by the Gyeonggi Provincial Special Judicial Police will be assigned to investigate local currency overcharging, and businesses found will face merchant restrictions and criminal penalties, and joint tax investigations will be conducted with city and county governments."

This content was produced with the assistance of AI translation services.