OF YOUR MONEY

Some­times the ben­e­fits you get out of a scheme don’t out­weigh the costs, writes An­gelique Ruz­icka

CityPress - - Business -

The rea­son I rec­om­mend ditch­ing pro­grammes that you don’t use is be­cause you are more of­ten than not charged for them in one way or an­other. Some com­pa­nies are trans­par­ent about it, though. For in­stance, Absa shows on its web­site that re­wards mem­bers pay a monthly fee of R23 a month, or an an­nual fee of R276.

Some­times you won’t be aware of how much you are pay­ing as the fees can be built into your monthly pre­mi­ums.

“Quite of­ten, fu­neral poli­cies have air­time or food vouch­ers as a ben­e­fit, but you are pay­ing for it. With cash-back schemes of­fered by life or car in­sur­ance providers, you pay ex­tra in the pre­mium for it. Re­mem­ber that none of th­ese busi­nesses are char­i­ties – it’s all costed into the pre­mi­ums,” says Keevy.

Re­wards are not al­ways cre­ated as perks for cus­tomers – they are also used to dis­cour­age cus­tomers from mak­ing claims.

“Short-term in­sur­ance com­pa­nies have in­cluded th­ese cash-back schemes as an in­cen­tive to their cus­tomer not to claim. By re­duc­ing their claims ex­pe­ri­ence, they are boost­ing their prof­its,” says Keevy.

If the ben­e­fits you get from join­ing a scheme don’t out­weigh the cost that you’re pay­ing, you’re not win­ning in my mind – you’re los­ing.

But there’s more to it than that. Have you ever tried to work out how much you’ve ac­tu­ally spent to achieve re­wards points? Of­ten, re­ward schemes make it dif­fi­cult to cal­cu­late how much you spent to get the num­ber of re­wards or points earned be­cause they use for­mu­las, such as, for ex­am­ple, for ev­ery R10 spent, you get two points and you get four points if you use a dif­fer­ent card, etc. If you can’t work out how you ben­e­fit, it’s prob­a­bly best to walk away.

YOUR RIGHTS ON RE­DEMP­TION

If you for­get to re­deem a voucher, you could still chal­lenge its va­lid­ity. Ros­alind Lake, a di­rec­tor at Nor­ton Rose Ful­bright who spe­cialises in com­pe­ti­tion and con­sumer law, says that the stan­dard rules un­der the Con­sumer Pro­tec­tion Act are that the voucher should be valid for three years from the date of pur­chase.

“The only time you would get it for less time is if it’s a pro­mo­tional of­fer. For ex­am­ple, a group-buy­ing web­site says you can get 80% off a mas­sage voucher, but you have to use it within a cer­tain time pe­riod. The re­stric­tions have to be dis­closed. Of­ten, there’s a dis­count in ex­change for the cus­tomer us­ing it in a re­duced time pe­riod,” Lake says.

She says that voucher re­demp­tions and their va­lid­ity are not com­plaints that she comes across of­ten.

“But I think this may also be down to the lack of aware­ness around this rule. Peo­ple also tend to for­get over time that their voucher is still valid. I ad­vise that, be­fore get­ting a voucher, you check the rules and reg­u­la­tions sur­round­ing it very care­fully.”

CALL­ING IT QUITS … OR NOT

If you are bad at re­mem­ber­ing when vouch­ers or re­wards ex­pire, but you’re still in love with get­ting re­warded for things you buy and do, rather join schemes that have re­wards and points that don’t ex­pire, such as FNB’s eBucks. Shop around to find the best re­ward scheme for your life­style and bud­get.

Al­ter­na­tively, quit them al­to­gether. Keevy says we’ve lost touch with why we use prod­ucts in the first place.

“Un­der­stand why you sign up for a prod­uct and don’t let re­wards cloud your judge­ment. Re­wards should be a sec­ondary thing. You need to un­der­stand that you never get some­thing for free. And the more de­pen­dent you are on the re­wards, the less in­clined you are to move some­where else,” he adds.

And this can be detri­men­tal for you in the long run, par­tic­u­larly if there are sav­ings to be made.

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