Property Tax 'Shinsegae Gift Certificate Payment' Ends...Industry Says "Low Usage Rate...Focusing on Other Benefits"

SSG.com Ends Seoul City Tax Payment Service
Lotte Also Ended Service in 2020
Industry: "Low Usage and Difficult to Profit"
Concerns Over Potential 'Gift Card Fraud' Perception

[Asia Economy Reporter Jeon Jinyoung] The mileage conversion feature of SSG.com’s Seoul city tax payment application (app), once known as a tax-saving tip for 'thrifty consumers,' has been discontinued. Starting from the 16th, when property tax payments begin, discounts using gift certificates will no longer be available, and only benefits such as credit card cashback are expected to be possible. The industry plans to end the service and focus on other benefits because usage is low outside the property tax payment period.

According to the industry on the 6th, SSG.com and Seoul City ended the service of paying property tax with SSG Money as of the 1st. The Seoul city tax payment system (STAX) allowed taxpayers to charge SSG Money using Shinsegae gift certificates over the past six years, then convert SSG Money into STAX mileage to pay property tax. Taxpayers purchased gift certificates at a 3-5% discount through secondhand trading platforms and gift certificate stores, then charged SSG Money to achieve tax savings. Even a 5% discount on gift certificates could save about 60,000 KRW per person within the maximum gift certificate mileage conversion limit of 1.2 million KRW.

With the termination of this service, the tax-saving tip of purchasing discounted gift certificates to reduce tax burden is expected to become impossible. Taxpayers who want to enjoy benefits will need to use services such as receiving cashback on the card used for payment. As a result, at the end of last month, posts buying Shinsegae gift certificates for the last mileage conversion flooded secondhand trading platforms. SSG.com stated, “The contract expired through mutual agreement between Seoul City and SSG,” adding, “SSG.com is currently the only simple payment provider offering local tax payment services via gift certificate charging, so this is also to align with industry trends.”

A gift card transaction post uploaded on a secondhand trading platform at the end of August, ahead of the termination of the Shinsegae Gift Certificate to SSG Money conversion service.

The industry believes the service was discontinued due to low usage rates and difficulty in profitability. The service mainly flourished only during the property tax payment deadlines in July and September, so the total number of users was not very high. An industry insider said, “Even with gift certificates, since already purchased certificates are traded secondhand across various platforms, it is difficult to see profits even if many customers buy them,” adding, “Moreover, additional costs such as platform usage fees are incurred, so maintaining the service costs more budget. Naturally, the contract expiration was the only option.”

Concerns that the tax-saving tip might be perceived negatively as ‘gift certificate fraud’ also played a role. Previously, Lotte also provided a service allowing tax payments to Seoul City by converting gift certificates into Lotte Points (L.Point), but this service ended without renewal after the contract expired in February 2020. Lotte Members explained, “We stopped the service in February 2020 after discussions with Lotte Card due to concerns about social side effects such as perceptions of gift certificate fraud,” adding, “Instead, mileage points earned from shopping at Lotte retail stores can be used for tax payments.”

An SSG.com representative said, “This decision was made to focus payment benefits and operational resources on services preferred by customers,” adding, “Considering payment convenience, the simple payment service using credit cards will be maintained as it is, and we plan to focus on other services that can enhance consumer convenience such as simple payments.”

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