Friday, 29 March 2013

Joke of the week: Airtime has an expiry date

First printed in the Namibian of 28 March 2013

All of us have at one time or another bought a product and on using the product notice that the expiry date has passed. The expiry date (or shelf life) indicates the length of time that foods, beverages, pharmaceutical drugs, chemicals, and many other perishable items are given before they are considered unsuitable for sale, use, or consumption. This is a way in which consumers are protected from unsafe products, and it provides protection for the seller of the product as the consumer has sufficient information through the printed expiry date.
Now imagine going to the shop and buying a roll of toilet paper. You store the toilet paper and after two months you take it out of its packing to use for what you bought it. Would you not be a little upset if when you start to use the toilet paper it all falls apart while you are using it? When you go to the place you bought it to insist they refund you your money, you might have to sit down a while and breathe deeply when they tell you there is an expiry date on toilet paper. All of us have an expectation that most non-perishable products should last a reasonable time and refuse to allow companies to make or sell inferior products because they have an “expiry date”.

This now brings me to prepaid services. Most of us have become used to having a prepaid metre in our house for water and electricity. The prepaid services are a way for these companies to ensure they get their money. In other words, prepaid takes out the risk of giving people an account and then having to struggle to get your money out of the customer. Prepaid means that the supplier has the money of the customer in their hands – but it does not belong to the supplier until the customer uses the service they paid for. Just as what the company will charge you interest if you have an account that is paid late, these suppliers should give you interest (or more units) the earlier you buy their service.  In my opinion, the companies that sell prepaid service should be selling it cheaper to the cash customers rather than giving cheaper services to people who are buying it on credit.

The word “credit” is translated from the Latin principle of “I believe”. Credit is the trust which a person or company has to be able to give something to another party where the receiving party does not immediately reimburse the debt but promises to do so at a later date. Thus our cellular, electricity and water companies have created a mechanism whereby we give them money (credit) on the understanding they will pay us back later in the service we wish to use. This idea of prepaid services has saved companies lots of money in tracing bad debt, etc and provided them a way to get the money from the consumer before the service is used. I believe this innovation has led to a very profitable business model and a “win-win” situation for both the consumer and the company supplying the service.Now let’s come back to the story of the expiry date.

Imagine this scenario: You purchase the electricity at the prepaid meter and you decide to buy four different credit notes with prepaid electricity. You use three throughout the month to help with your weekly budget and are very well pleased with your savings when you still have one slip of electricity credit left. (Remember this is your money that has not yet been paid in service.) The next month you only buy three more credit notes as you were able to save on your budget and this is your reward. Now let us imagine further that when you use the credit note of the previous month, it does not work. When you enquire at the supplier they inform you that your money has expired. That’s right. The money you have given them has no value any longer to the supplier because you took too long to use the prepaid service. I am sure you will feel the same as the customer who finds out the toilet paper is not doing its job because it expired.I was sitting on the throne this week when I read about the expiry date of the MTC airtime vouchers. I quickly looked up and made sure the toilet paper was not the next thing that would expire.

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