Baemin fee change: delivery tip discounts no longer taxed

How does the new Baemin fee calculation work?

Take a 25,000 won order where the owner gives a 3,000 won discount. Whatever the discount is called, the brokerage fee and the payment settlement fee are both calculated on 22,000 won. Baemin will amend its terms of service for its delivery service to say so.

The change fits with the "integrated discount" Baemin introduced in July. An owner sets one discount amount, which goes to the customer's delivery tip first, and any remainder comes off the food price. Some in the industry note that owners pay the delivery tip discount on top of existing delivery costs. Woowa says the structure doesn't add to discount costs.

What happens with Coupang Eats?

Coupang Eats charges fees on the sale price before discounts. South Korea's Fair Trade Commission ordered it on October 27 to fix that clause, and it has 60 days from that date to do so. Separately, the regulator said on November 9 it will fine Baemin and Coupang Eats a combined 631.9 billion won over practices including most-favoured-customer demands.

Five small-business groups, including the Korea Federation of Micro Enterprises, called Baemin's move a "major step forward" and urged Coupang Eats to follow, threatening a strong response if it doesn't. Kim Jun-hyung, chair of an owners' association, said a 1,000 won coupon means about 100 won less in fees per order, which adds up quickly for shops using 3,000 or 5,000 won coupons.

He also pointed to a bigger problem: owners must offer such coupons to get orders, and some raise menu prices first, then discount them.