Seoul's top court says a supplier's signed return form is not justifiable cause on its own

The law GS Retail was arguing under is generous to retailers on paper. A large retailer may not send back goods it has received without justifiable cause, but in direct purchase transactions that cause is presumed when the supplier asks in writing before the return date and attaches objective evidence that the return directly benefits the supplier ^[5]. The company satisfied the first half of that sentence and not the second. Division 6-2 of the Seoul High Court held in May of last year that a request resting on documents alone is not enough to treat it as voluntary ^[8], and the third division of the Supreme Court, presided over by Justice Roh Kyung-pil, found no error in that reading ^[1].

The volume explains why the presumption did not hold. Across the 31 months from April 2017 to October 2019, the returns ran at roughly 2,000 items a month ^[3], and the average item was worth about 29,800 won ^[2]. That is inventory housekeeping at scale, and a form generated at that cadence tells a court very little about whether any individual supplier wanted the goods back.

What the Supreme Court did not do is reweigh the facts. Its finding was that the lower court had not misapprehended the facts behind the fine calculation and had not breached the principles of proportionality and equality ^[12]. That is the whole of the review available, because an FTC sanction decision carries the effect of a first-instance judgment: the challenge opens at the Seoul High Court and terminates at the Supreme Court ^[13]. A retailer that loses the factual record at the commission has, in practice, already lost.

The third strand of the case shows how little room there was left to argue. Of 562 supplier employees the FTC flagged, 556 were found to have been made to work at GS Retail's own business sites in breach of the Act on Fair Transactions in Large Retail Business ^[10], a hit rate of 98.9 percent ^[4]. The conduct the commission assembled spans January 2015 to June 2020, about five and a half years ^[5].

In cash the outcome is minor: en.sedaily.com puts the penalty at about 1 billion won, or $720,000 ^[2], against a formal order of 1.027 billion won ^[3]. The corrective order and the test behind it are the operative part, and the same report says the confirmation is expected to influence trade practices across the retail industry, with analysts expecting it to speed up work on unfair practices ^[14]. For everyone else selling through a large Korean retailer or buying from one, the test is now evidentiary rather than procedural: a return needs a record of what the supplier gained ^[5], and a promotion needs a cost-sharing agreement dated before the event rather than reconstructed for an investigator ^[6].