Store club fees - What are you getting for your spend?
Do you know how much you're spending on membership fees for a store account? Are you benefitting from the monthly payments? Consumerwatch's Wendy Knowler chats to a Toti resident who has had an account for about 20 years.
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Last year, store account club fees were making headlines especially the bit about the National Consumer Tribunal handing down a judgement outlawing the charging of club fees on store accounts.
This ordered Edcon - owner of the Edgars, Jet, CNA and Boardman’s brands, among others - to refund all the club fees it had charged its millions of accountholders since 2007 and to stop charging club fees.
That’s when the National Credit Act came into effect and according to the Tribunal, it does not allow for a club membership fee to be added to a credit agreement.
Many retailers have created membership clubs, offering discounts on things such as movie tickets and the like for a fee of anything between R30 and R80 a month, but many of those who agree to join end up paying every month for years without benefitting at all.
The Foschini Group and Mr Price were also referred to the Tribunal with regard to the charging of club fees, but no judgements have been handed down.
Meanwhile, Edcon’s club members have been excitedly looking forward to a lovely bonus in the form of refunded club fees.
But that’s not happening. Edcon took the matter on appeal to the High Court, so the Regulator can’t enforce the judgement while that’s pending.
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So it’s pretty much business as usual.
And many accountholders have been asking me - what now? When do we get our money? Do we have to keep our accounts going and keep paying our club fees to qualify for a refund?
One of them was Charnelle Rossouw of Amanzimtoti, who’s had an Edgars account for about 20 years.
“I have been waiting for someone to inform accountholders about the payback of our club fees,” she wrote.
“They are still charging me a club fee of R44 a month. I thought they would stop it.
“I want to close my account, but I do not want to lose out on pay back if it ever happens.”
Elsie van Niekerk wrote: “I still have my account, which I opened sometime in the late 80s or early 90s, but have cancelled the club magazine fees and asked for a refund, which they have declined.”
“I never used any benefits. And Edgars no longer posts the magazines, you have to collect it in-store, and we were charged for it every month regardless of whether we did or not,” she says.
What do Edcon accountholders get for their monthly membership fee?
Edcon said - "Things like preferential rates and savings on gyms and spas; movie and theatre tickets; accommodation and car rental and emergency services and education benefits”.
But many club members have told me that they never claimed any benefits and hadn’t realised that they needed a club card in order to do so.
I did ask Edcon what percentage of those members regularly use those benefits, but the company didn’t answer that.
Charnelle told me she plans to cancel her club membership and spend that R44 a month on something else.
And I’d advise anyone else who is not deriving any benefit from their club membership fees to do the same.
If Edcon is legally obliged to refund the club fees accountholders have paid - and that’s a long shot, in my view - I doubt that you would have to be a current member to qualify for the refund.
But it’s not just club fees which bloat many Edcon accountholders’ indebtedness. Other extras include travel insurance, personal accident insurance, funeral insurance, dental insurance and the Edgars legal plan.
And they’re not the only retailer padding customers' accounts with add-ons.
The cost of living is high enough without extras you don’t particularly need or can be sourced far cheaper.
Just say no!