Mergepoint abruptly halted its discount currency — court ordered it to compensate users

Mergepoint was once a popular Korean online discount app: consumers bought items or ate out with Mergepoints at 20 percent off the regular price, usable at about 60,000 places nationwide including retail chains, convenience stores and coffee shops.

In August 2021 its operator abruptly announced that sales of Mergemoney, the service's currency, would be halted and the number of retail stores accepting the currency reduced. The announcement immediately triggered a rush for refunds.

A total of 148 users sued Mergeplus, the operator, and others for ₩200 million ($151,885) in compensation. On 1 September 2023 the Seoul Central District Court ruled against Mergeplus, its CEO Kwon Nam-hee and an affiliate, who are expected to pay the compensation jointly. The court found Lotte Shopping and five other online shopping malls that had sold the virtual currency not liable.

Criminal exposure ran alongside the civil suit: Kwon Nam-hee and her younger brother Kwon Bo-gun, the firm's chief strategy officer, had already been given prison terms of four years and eight years respectively on charges including fraud.

Halting currency sales while simultaneously cutting acceptance points signalled collapse rather than restructuring.

Users held prepaid value, so every cut to the acceptance network devalued money they had already handed over.

The operators' conduct was severe enough to draw criminal fraud convictions, not just civil liability.

Selling channels like Lotte were cleared because they resold the currency without running the scheme.

A discount currency is a promise inventory: the moment holders suspect it will stop circulating, your only choices are an orderly wind-down or court-ordered refunds.

The 1 September 2023 ruling left Mergeplus, its CEO and an affiliate jointly owing the 148 plaintiffs; the founders were already serving prison terms for fraud.