Why is it difficult to understand “point reduction”? September 30, 19:27

The consumption tax rate will be raised to 10%. In line with this tax increase, tomorrow will start a system in which a maximum of 5% of points will be returned for cashless payments at small and medium-sized stores.

However, there are many voices saying that this “point reduction system” is not well understood.

Why it's hard to understand

There are two main reasons why it is difficult to understand.

One is that it is difficult to understand the stores that are eligible for “point reduction” and the respective return rates.

The other is that the timing and methods for returning points to consumers are varied from store to store and from company to company.

How does “point reduction” work in the first place?

Under the “point return system”, when a consumer makes a purchase using “cashless payment” at a store that is eligible for “point return”, up to 5% of the purchase amount is given to the consumer. It is a mechanism that returns as "points".

The country will assist the cashless payment operator with the amount of money that comes back to the consumer.

For example, if you shop for 10,000 yen

(1) A consumer purchases 10,000 yen worth of goods using cashless payment at a point-rewarded store. If the consumption tax rate is 10%, the settlement amount will be 11,000 yen including tax.

(2) Cashless payment service providers will return 550 yen, equivalent to 5% of 11,000 yen, to consumers.

(3) The government will subsidize 550 yen for cashless payment operators.

It's hard to understand how to return to consumers!

However, what is not well understood by this “point reduction system” is the point at which consumers get the points and when and how they can return points.

The answer to when and how the points come back varies from company to company and from service to service.

In addition, there are places that return to consumers without taking the form of “points”.

For example, three major convenience stores deduct the amount equivalent to points at the moment of payment at the cash register. From the consumer's point of view, the price will be reduced on the spot.

Some credit card companies also deduct points equivalent from the monthly bill.

Search service by Ministry of Economy, Trade and Industry by HP

“I don't know what percentage the return rate will be.” In order to respond to this voice, the Ministry of Economy, Trade and Industry provides a service that allows you to check the status of each store on the map on its website and app. The homepage address is https://cashless.go.jp.

A dedicated app can also be obtained from this website via the app store.

Why such a complicated mechanism?

There are two main reasons for the government to introduce this “point return system”.

One is a measure against the economic downturn, which is worried about the consumption tax hike. There is a particular purpose to support small and medium stores.

Another aim is to spread cashless payment in Japan at this opportunity.

These two different goals are included.

In addition to this “point reduction”, this consumption tax rate increase will also introduce a “reduced tax rate” that keeps the consumption tax rate at 8% for food and beverages excluding alcoholic beverages and restaurants.

“Raise consumption tax rate”, “reduction of points” and “reduced tax rate”.

These three factors are intricately intertwined, and furthermore, there are various methods for returning the amount equivalent to points to consumers, which makes it very difficult for consumers to understand. .

(Please also see the special website that details consumption tax increases.)