Government cracks down on resale of cash handouts amid misuse concerns

A merchant accepts payment with a prepaid voucher card at a traditional market in Buk District, Gwangju, Tuesday. Yonhap

Shortly after the first-round applications for the government's voucher-based cash handouts began nationwide Monday, multiple cases of the benefits being resold and purchased at discounted prices on secondhand online marketplaces have been reported, government officials said Tuesday.

This raises concerns that the original purpose of the program — to stimulate domestic consumption and revitalize local economies — may be significantly undermined, prompting officials and online resale platforms to tighten oversight.

According to the Ministry of the Interior and Safety, individuals caught reselling the cash handouts, called "consumption coupons," for cash could face up to three years in prison.

Under the government initiative unveiled on June 19, every Korean citizen living in the country as of June 18 is eligible for a one-time benefit of 150,000 won ($108). Additional financial support will be distributed selectively based on income brackets.

Recipients can choose how to receive the payment, with options including credit or debit cards, prepaid cards or gift certificates issued by local governments.

Since the applications began, several posts have appeared on secondhand marketplaces such as Karrot and Junggonara, offering the coupons in prepaid card form for sale.

One seller listed a 150,000 won prepaid voucher card for 130,000 won, citing a lack of time to use it.

"My registered address is in Seoul, but I work and live in Incheon, so I don't have time to use it," the seller wrote.

The resale attempts are believed to stem from the nature of the vouchers, which can only be used within the area governed by the recipient's registered address. In addition, the coupons are valid only at shops with annual revenues under 3 billion won, which excludes large supermarkets, department stores and entertainment establishments.

If the coupons are converted into cash, there is a greater chance that the money will be spent at major retailers or corporate-owned stores, which reduces the support intended for small businesses. As a result, the Interior Ministry decided to tighten monitoring and enforcement, labeling such misuse illegal.

Citizens apply to receive voucher-based cash handouts at a welfare center in Suwon, Gyeonggi Province, Monday, the first day of applications. Yonhap

According to the ministry, if the vouchers are converted into cash, the full or partial amount must be refunded under the Subsidy Management Act. Additional sanctions may include fines and restrictions on receiving future subsidies.

Sellers who unlawfully profit from reselling the coupons will also face penalties. Posting false listings or demanding more than the coupon's value can result in up to three years of imprisonment or fines of up to 20 million won under the Specialized Credit Finance Business Act.

They may also be punished for fraud under the Criminal Act, as such conduct is considered deceiving the government to gain financial benefits contrary to their intended purpose.

Following a request from the ministry, online secondhand marketplaces have limited the use of certain search terms like "consumption coupons" and "livelihood support funds." Posts containing these keywords are being deleted.

"We have urged local governments to set up regional hotlines to receive reports of illegal coupon distribution and to carry out frequent inspections of participating merchants," a ministry official said. "We also asked for strengthened monitoring to prevent individual transactions on online communities and similar platforms."