Card payment cancellations have surged, centered on Samsung Card and Shinhan Card, following the decision to terminate Homeplus's rehabilitation proceedings. The spike came as deliveries and installations of large home appliances halted on top of a suspension of appliance supplies from major manufacturers, effectively canceling en masse the orders of customers awaiting delivery.
According to the card industry Friday, Homeplus card approval cancellations centered on Samsung Card and Shinhan Card increased significantly compared with usual levels over the past weekend. The two card companies, which operate private-label credit cards (PLCC) with Homeplus, offer benefits for appliance purchases and are known to have a high proportion of customers buying appliances at Homeplus.
The payment cancellations occurred after the Seoul Bankruptcy Court decided on the morning of the 3rd to terminate Homeplus's rehabilitation proceedings, prompting Samsung Electronics' partner logistics firms to halt deliveries and installations of large home appliances. Large Samsung Electronics appliances sold at offline stores are delivered and installed by partner logistics firms. "The logistics firms stopped their work out of concern that they might not receive delivery and installation payments on time," a Homeplus official said. "For this reason, orders for large Samsung Electronics appliances requested for delivery after the 3rd were effectively canceled en masse."
Appliance supplies had largely been suspended since the period when the rehabilitation proceedings were underway. Homeplus subsequently continued large-scale discount events, centered on offline stores, to clear its large appliance inventory. On top of this, a "Thanks Festival" that Samsung Electronics ran from the 8th of last month through the 5th of this month also increased the scale of cancellations. Samsung Electronics held an event refunding a portion of purchase amounts in Onnuri gift certificates, and Homeplus was included among the distribution channels eligible for the event.
As payment cancellations surged, disruptions also emerged in card payment settlements. Samsung Card temporarily suspended payments to Homeplus merchant accounts on the 6th, then resumed payments a day later. "Card sales cancellations increased sharply after the decision to terminate the rehabilitation proceedings," Samsung Card said. "This was a measure to prevent customer harm such as the suspension of goods and service provision and the inability to cancel."
Shinhan Card was also known to have internally reviewed whether to suspend payments to Homeplus merchant accounts. However, considering merchants' settlement disruptions and business burdens, it decided to maintain its policy of normal payments.
The financial sector has begun examining the ripple effects of the Homeplus situation. The Financial Supervisory Service (FSS) held a meeting of lenders related to Homeplus's leased stores and reviewed financial companies' exposure and potential risks. However, it was reported that the level was not deemed sufficient to significantly undermine the soundness of financial firms so far.
