Woowa Brothers said on Nov. 12 it will revise the terms of use for its Baemin Delivery service so that all food price discounts and delivery fee discounts borne by partners are excluded from the calculation of brokerage commissions and payment settlement fees. It estimated annual fee savings at 110 billion won.

Under the change, merchants will also have the amount they cut from delivery fees excluded from fee calculations. The company said it has voluntarily refined the system under a principle of not charging fees on discounts borne by partners. The exclusion of delivery fee discounts reflects requests from major small business groups in the restaurant industry. Food price discounts are already excluded from brokerage commissions and payment settlement fee calculations, and in May last year it also excluded these amounts after building a system to separate the portion borne by franchise store owners among discount coupons issued by franchisors.

Baemin made it easier from July this year for partners to invest in delivery fee discounts that raise the likelihood of customers placing orders, through an "integrated discount" program. Stores participating in the integrated discount program posted an average monthly sales increase of more than about 200,000 won from a year earlier compared with stores that kept the previous approach, the company side said. The company said it expects that once the terms are changed, partners will be able to use delivery fee discounts, which have a large effect on boosting sales, without the burden of fees.

For example, if a partner discounts 3,000 won on a 25,000 won order, Baemin settles only the brokerage and payment settlement fees on 22,000 won regardless of the stated reason for the discount. Compared with other platforms that do not deduct discounts, a store selling 30 orders a day on Baemin saves more than 290,000 won a month and nearly 3.5 million won a year in fees.

The 110 billion won figure estimated by Baemin based on its own data is the savings compared with a method that charges fees on pre-discount prices, and includes the existing deductions for food price discounts. The company said it expects customers using Baemin will also enjoy more discounts as the fee burden attached to delivery fee discounts is reduced.

Beomseok Kim (김범석), CEO of Woowa Brothers, said, "This revision of the terms has further strengthened the operating principle of deducting discounts borne by partner stores when settling platform fees." He added, "We will continue to steadily pursue practical ways of mutual growth that ease partners' burdens and can lead to customer benefits."