“Are you a customer if you buy more than 50,000 won?”…The inside story of Gangnam Shinsegae百 without free parking

“I spent less than 50,000 won today, but I didn’t realize the coupon didn’t apply. Is there anything I can do?”

Last weekend, the underground parking lot at Shinsegae Department Store Gangnam was a little different than usual: while parking spaces were easy to find, the entrance to the lot was chaotic.

Scuffles often broke out between employees who informed customers that their free parking coupons could not be used and visitors who tried to use them.

This is because Shinsegae Department Store announced that the free 3-hour coupon, which it had been offering twice a month to expand its customer base, could not be used at the Gangnam store from this month. Originally, Shinsegae Department Store had been offering free coupons that could be used at a total of 10 stores (Gangnam, Gyeonggi, Gwangju Shinsegae, Gimhae, Daegu Shinsegae, Daejeon Shinsegae, Main Store, Centum City, Uijeongbu, and Cheonan Asan), but in May, the phrase “Gangnam store is an exception” was suddenly added.

Graphic by Seohee Jung

Customers who hadn’t seen the notice complained about the inconvenience, including those who came for a cup of coffee with a friend and ended up paying for parking, those who didn’t find what they were looking for and ended up paying for parking on their way home, and those who complained that they had to spend 50,000 to 150,000 won to be a customer.

The reason why Shinsegae Department Store Gangnam suddenly stopped using parking coupons like this is due to parking congestion. The store said that it was forced to temporarily suspend the program because the number of people visiting the Han River made parking inconvenient for department store customers. They plan to resume the program when the situation improves.

The department store’s explanation is understandable. For those who visit Hangang Park for a short time, department store parking coupons are a great deal, and Shinsegae’s Gangnam branch is often mentioned on the web as a tip for free parking at Hangang Park.

However, the department store industry looks at it differently. It’s all about cost control. This means that there must have been a plan to reduce the traffic congestion charge imposed by Seocho-gu Office in Seoul.

A traffic congestion charge is an economic burden imposed on facilities that cause congestion in order to alleviate traffic congestion based on the principle of causer-pays. According to the Urban Traffic Maintenance Promotion Act and the Seoul Ordinance on Reduction of Traffic Congestion Levy, facilities with a floor area of 1000㎡ or more are subject to a traffic congestion levy.

The levy is calculated by multiplying the sum of the floor area of each floor of the facility by the unit levy and multiplying it by the traffic generation factor. A department store has a trip generation factor of 10.92, which is 23 times higher than that of a factory (0.47). However, there are ways to reduce this burden.

According to Article 6 of the Seoul Metropolitan Government’s Reduction Ordinance, if a business is deemed to have made its own efforts to reduce traffic, the fee will be reduced by up to 20%. Suspending the use of free parking coupons is a sufficiently voluntary effort to qualify for the reduction.

An official from the department store industry said, “We are fully aware that suspending the use of coupons will inevitably lead to complaints and we will have to respond to them먹튀검증, but since the topic of the department store industry this year is cost control, it seems to be a pragmatic choice.”

In the first quarter of this year, Shinsegae’s consolidated sales were down 11.5% and operating profit was down 6.8% from the same period last year. This is because the retaliatory spending during COVID-19 has disappeared, and the low interest rate environment has reduced spending power.

Shinsegae Department Store Gangnam reportedly paid 2 billion won in traffic congestion charges as of 2020, and about 2.4 billion won in traffic congestion charges last year.

In these days of cost management, will Shinsegae Department Store Gangnam be able to reduce the levy? We’ll find out after the July 31st deadline.

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