Can You Get a Refund If a Marketing Agency Underdelivers?

TL;DR

What happens when you cancel a contract with an ad agency that didn't perform?

Hospitality & Law with Attorney Song Ji-eun

05. Can You Get a Refund If a Marketing Agency Underdelivers?

Hospitality Legal Q&A, Part 2

Writer: Attorney Song Ji-eun

Editor: ONDA Manager Lee Chae-eun

Following up on our last discussion, today's Q&A tackles a common headache: what to do when a marketing agency fails to deliver on its promises—and whether you can get your money back.

Many accommodations run social media or paid campaigns to attract guests. Some operators hand off marketing entirely to agencies so they can focus on running their property. But what happens when things go wrong? What are your options? Here's the question we received from a property owner:

I hired a marketing agency three months ago. Nothing's happening—no results, no progress. I asked to cancel. They refunded ₩240,000 out of the ₩1.32 million I paid upfront for a year-long contract. I escalated to a consumer dispute resolution board. They sent a registered letter to the agency, but got no response. The board told me there's nothing more they can do. Can I still get my money back?

This sounds like a poorly written contract—or no contract at all. Once you're in this situation, it's hard to fix. The agency did run some ads, just not effectively. There's probably no refund clause in the agreement (if one exists).

The ad spend is too small to justify litigation. Even if you sued, there's likely no performance benchmark in writing, so winning isn't guaranteed. Dispute boards and consumer protection agencies have no enforcement power—you can't rely on them.

The hard truth? If it's already broken, it's tough to fix. Prevention is everything. Which means: get a proper contract in writing.

What to Include in a Marketing Contract

Marketing falls under service contracts. If the agency promised not just "we'll run ads" but "we'll get you results," that needs to be in the contract. A simple ad placement contract is fulfilled once the agency posts your content on the agreed channels—at that point, you owe the fee.

To protect yourself, put performance goals in the contract. For example: "Social media campaign to increase bookings by 5% within one month." Then specify what happens if that doesn't materialize—additional services, partial refund, etc.

Bottom line: Agree on measurable outcomes. Write them into the contract. Define what happens if the agency misses the mark.

How to Protect Yourself Before You Pay

In the case above, it looks like the operator paid the full annual fee upfront. Split payments reduce risk. If it's a monthly contract, pay after each month's campaign wraps, not before.

Another option: ask the agency to get performance bond insurance (e.g., from Seoul Guarantee Insurance). This protects you if they fail to deliver.

The scenario here is a year-long contract paid in full, with cancellation requested after three months. A clear refund policy in the contract prevents disputes. Since the agency has now gone silent, prevention (as outlined above) beats the cure. Post-incident, your only real recourse is litigation.

In this specific case, legal costs may exceed the refund amount—so a lawsuit might not make sense. But if the damages are substantial, litigation is your path to recovery. Don't just file a lawsuit—apply for a provisional seizure (e.g., garnish the agency's office deposit). That's far more effective.

Of course, a detailed contract with clear termination and refund clauses dramatically improves your odds of winning.

In this second installment of our Hospitality Legal Q&A, we explored how to handle disputes with service providers—both before and after things go wrong. If you're contracting with a marketing agency, refer back to this guide.