Passing on the cost to the supplier and mobilizing staff… Home shopping again

◀ anchor ▶

TV Home Shopping was found to have abused its suppliers and was subject to sanctions.

In addition to high commissions, they freely used the supplier’s manpower and passed on the cost of promotions to the supplier.

However, this is not the first time these TV home shopping scams have occurred, and they have continued as if it were a custom.

This is the report by Lee Jung-eun.

◀ Report ▶

Home shopping companies with annual sales ranging from 8.5 trillion won to 200 billion won.

They receive close to 30% entry fees from their suppliers.

Compared to the entry fee of department stores and large marts that do not exceed 20%, it is close to exorbitant.

However, despite receiving such a large commission, home shopping companies did not stop the so-called ‘gap abuse’ against suppliers.

Leaving promotional costs on to vendors or over-paying within 40 days is an old practice.

Recently, it has been revealed that home shopping companies have shifted the cost of mobilizing suppliers’ employees to broadcasts or hiring guests and demonstration models to the suppliers.

In principle, this is a violation of the current law that prohibits the use of manpower by suppliers.

[박기흥/ 공정거래위원회 유통거래과장]

“Originally, since we receive a lot of broadcasting fees, home shopping companies have to pay for (broadcast) production.

The Fair Trade Commission decided to find 7 home shopping stores that engaged in fraudulent sales, such as GS Shop, CJ OnStyle, and Lotte Home Shopping, and to impose a fine of 4.1 billion won.

This is the second time.

In 2015, the Fair Trade Commission imposed a fine of KRW 14.3 billion on six home shopping companies for discovering various abuses, such as passing on promotional expenses, delaying sales, and giving disadvantages to commissions.

[서남교/ 공정거래위원회 (2015년)]

“The tyranny against the supplier has been going on forever.”

Although it was unclear whether the re-approval of the home shopping channel was due to this, the industry practice was still there.

The Fair Trade Commission announced that as non-face-to-face commerce has increased due to COVID-19, it will look into unfair practices in online shopping malls and TV commerce in the future.

This is Lee Jung-eun from MBC News.

Video Editing: Yang Hong-seok

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