Evaluation of the Issuance and Management System of Local Gift Certificates

Published on November 14, 2025
Published by Social Administrative Program Evaluation Division, Budget Analysis Department

    In recent years, the issuance of Local Gift Certificates (Local Certificates) has become a nationwide practice and almost every region in South Korea now sells them. However, as each local government independently handles issuance and management, there are no publicly available statistics regarding Local Certificates including operating fees, not to mention a consistent management system. Against this backdrop, this report provides an analysis of the current status of the issuance, management, and administration of Local Certificates by local governments and recommends future tasks to improve overall management.First, all local governments are subject to a uniform minimum contribution rate when receiving national grants, which places a relatively heavier burden on local governments with low fiscal capacity. This may also restrict local governments from expanding certificate issuance due to limited financial resources. For this reason, this report advises that the Ministry of the Interior and Safety (MOIS) applys differentiated minimum contribution rates depending on each local government's circumstances.Second, unlike physical ones, digital gift certificates (i.e. mobile, card type) force merchants to pay transaction fees depending on the payment method. To prevent these fees from becoming a financial burden on micro business owners, policy measures should focus on subsidizing merchant fees, promoting the use of QR payment methods that incur no transaction fees, and negotiating reductions in card processing fees.Third, some local governments demonstrate weak fiscal management, such as failing to disclose the status of certificate management funds on their websites as required by the Act on the Promotion of Use of Local Gift Certificates, or retaining interest income in their bank accounts while the Local Gift Certificate Management Guidelines require that such income shall be treated as revenue. MOIS needs to strengthen administrative support and supervision to improve the transparency of certificate fund management.