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Voucher program goal up in smoke? Use for cigarettes, beauty treatment criticized.

Published: 27 Jul. 2025, 19:56

A sign reading “Consumer Coupons Accepted Here” is posted at a shop in Cheongnyangni Traditional Market in eastern Seoul on July 27. [YONHAP]

Korea's latest consumer coupon program, meant to boost spending at small businesses, is drawing criticism after a viral post on Sunday revealed that recipients are using the subsidies to buy cigarettes or receive beauty treatments.

“It’s ironic that essential goods face strict restrictions while cigarettes remain eligible,” the user wrote, sharing a news article on rising tobacco sales. “If this is a taxpayer-funded benefit, shouldn’t it be used for healthier, more productive spending?”

Others agreed. “Shouldn’t the system be reviewed?” one commenter asked. “We should exclude harmful items,” another added.

The controversy reflects a broader debate over the effectiveness and direction of the government’s coupon program — part of an effort by the Lee Jae Myung administration to stimulate sluggish domestic spending. The program provides 150,000 won ($110) per person in its first phase beginning July 21.

While consumers cannot use the coupons at large supermarkets or department stores, they are able to use them at convenience stores and small clinics.

That has triggered a wave of purchases that some argue stray far from the program’s intended purpose.

On online communities used by convenience store owners, several wrote that cigarette sales had noticeably spiked since the coupons rolled out.

One store manager on Wednesday posted a receipt showing a customer spending 150,000 won on various tobacco products.

“Our tobacco sales have nearly tripled lately,” another owner in Gangwon said. “But since cigarette margins are so low, small business owners gain little.”

Convenience store operators point out that tobacco’s profit margin is only around 7 to 8 percent, far lower than the 20 to 30 percent for typical goods.

Cigarettes are displayed at a convenience store in Seoul on June 12. [YONHAP]

Some workers have admitted that they sometimes pretend not to know whether the coupon can be used for cigarettes.

Others, however, have welcomed the volume.

“Cigarette buyers often purchase other things too,” another worker said. “Even low-margin items can be profitable when sold in bulk.”

Consumer coupon-funded tobacco sales are not a new phenomenon. During the emergency Covid-19 relief payment period from May to August 2020, national cigarette sales rose 4 percent year-on-year to 1.25 billion packs.

Some experts argue it is time to rethink what the coupons should be allowed to cover.

“When you consider the social and economic costs of smoking and drinking, the rules need an update,” said Kim Dae-jong, a business professor at Sejong University. “The United States already excludes alcohol and tobacco from food assistance programs. Korea should consider doing the same.”

Lee Eun-hee, a consumer studies professor at Inha University, cautioned against overregulating how consumers use the coupons.

“In this current domestic demand setting, encouraging additional spending matters most,” Lee said. “While it’s better if consumers support small merchants, over-restriction may not be advisable.”

Consumer coupons are also increasingly being used for cosmetic treatments at plastic surgery and dermatology clinics as many dermatology and cosmetic surgery clinics qualify for the program because they meet the government’s definition of small businesses — annual sales under 3 billion won.

A sign reading “Consumer Coupons Accepted Here” is posted at a shop in Cheongnyangni Traditional Market in eastern Seoul on July 27. [NEWS1]

Some clinics have launched promotions encouraging coupon use, leading to online reviews like, “Used my coupon for Rejuran" — a skin rejuvenation treatment — and “Spent it all on hair removal.”

Industry representatives worry this could undermine the program’s original goal.

“Even among small businesses, if coupons flood into clinics instead of restaurants and local shops, it defeats the purpose,” one retail source said.

Some experts say consumer behavior is hard to regulate, even if the outcomes are questionable.

“There’s no legal problem here, so regulation is tricky,” said Heo Kyung-ok, a professor of consumer science at Sungshin Women's University. “But since the program is taxpayer-funded, it would be better for consumers to spend with the broader economy in mind.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY HWANG SOO-YEON [[email protected]]