Knowledge shared is power gained

(First Published in New Era Newspaper - 15 July 2014)

The following complaint was brought to the attention of Consumer Court last week: “Woermann & Brock does it again! Shelf price N$ 22,49; at the till they charge N$ 23,99. It happens all the time and over and over again. No apologies, nothing, just sheer ignorance! I am convinced that this a deliberate rip off, as this happens regularly. When will the consumers stand up to this?”

The customer also included a photograph of the till slip next to the unit price displayed on the shelf to show that the two differed. Consumer Court contacted the General Manager, Mr Rudolph Fourie, and requested feedback from him regarding the consumer’s complaint. He returned our mail and indicated they would attend to the complaint and thanked us for bringing this to his attention.

On Saturday, I was at my local grocery store (which happens to be Woermann Brock Hyper in Khomasdal), and noticed there was a hive of activity on the floor. Upon closer inspection I noticed that in each row there was a supervisor in charge of checking the price on the shelf against the barcode reading they received when scanning the product. It was very heartening to see the company reacting to the complaint in such a short period of time. A little later, while strolling near the mayonnaise shelf, I noticed an elderly couple doing their shopping. The old lady reached for a particular brand of mayonnaise when I noticed her male companion (husband?), call her attention to the pricing on the shelf. They got into some discussion, and then she returned the brand she had taken and took another brand which obviously had a better pricing option.

This is what the Consumer Court hopes to achieve on behalf of the consumer – having their complaints heard AND acted upon by the business community. Well done to Woermann Brock and we will keep watching to see they adhere to the legal requirement of displaying the correct price on the shelf, and ensuring the consumer is being charged the displayed price at the counter.

Scanner Price Accuracy Code

The consumers in Namibia are regularly being cheated out of their hard earned cash as most modern retailers use shelf pricing that differs from the price the consumer has to pay at the checkout. To combat this we need to put pressure on getting a “Scanner Price Accuracy Code” to be adhered to by all retailers in the country.

The purpose of the code should be to:

• Visibly demonstrate the commitment by retailers to scanner price accuracy;
• Provide retailers with a consistent national framework for dealing with scanner price accuracy issues; and
•  Provide the consumers and the retail industry with a mechanism for consumer redress in scanner price accuracy cases, to be managed by a joint committee of retailers and consumer bodies.

It is further proposed that all retailers implement an Item Free Scanner Policy whereby a customer presents proof that the scanned price at the checkout counter is higher than the price on the shelf (or even higher than advertised) the lower price will be deemed to be the one that will be charged. It is also proposed that should the correct cost of the product be less than N$ 100, then the store will give the product to the consumer free of charge. If the correct cost of the product is more than N$ 100, the store should give the consumer a discount to the value of N$ 100 on the product price.

If the retail industry is willing to work together with consumer bodies, the Namibia Competition Commission can be approached to assist and even endorse such a code.

After the weekly column was written, I received an email from Woermann and Brock stating the following: “On behalf of Woermann & Brock, we apologise for the inconvenience of the customer. We do have a Company Policy in place that when this kind of situation arise, the customer will receive the first item for free, and the second item can be purchased at the lower price indicated on the shelf”. Well done – now we must share it amongst our fellow consumers.

Where medicine is loved, there is a love of humanity

(First Published in New Era Newspaper -9 July 2014)

Recently I visited one of the stores that sells a range of beauty and personal hygiene products in the western part of Windhoek. My fiancé, who is presently pregnant, wanted to purchase something for her flu and had me tag along. Once inside the shop (which I have never actually visited before), I noticed they stocked a large variety of products including pots, pans, and other white goods. In our case, we moved to the section dealing with vitamins and cough mixtures to see what was available. I requested one of the shop assistants to help us but it was painfully clear the person had no real training on the products that were offered. After some discussion, my fiancé and I felt it would be better to visit a nearby pharmacy. The same products were available at the pharmacy and we requested the pharmacy assistant to give us some guidance. After ascertaining that we were “expecting”, she quickly pointed out that it is not healthy to take some of the products and suggested we should rather look at effervescent (soluble in water) flu medications.

I took the time to speak to the pharmacist after this recommendation and asked about the level of training needed to be an assistant at their pharmacy. The owner informed me that they tried to take students in the field of biology or at least a three month course in first aid. In addition, only the pharmacist may actually suggest a product for a client that is pregnant or breast-feeding.

When I asked about the nearby hygiene products chain store, the pharmacist did admit that they were facing fierce competition and it was unfair as the staff who were working at the chain store were mostly school drop-outs with little or no education in basic medical care.

After this discussion, I took to the Internet to gauge the reality of people purchasing over the counter medicines. I came across the following definition by an international pharmaceutical company:

“Over-the-counter (OTC) medicines can be purchased at a pharmacy without a prescription. These include Schedule 0, 1 and 2 drugs, such as medication for headaches, coughs and colds, minor skin conditions, etc. It is always a good idea to consult the pharmacist (or assistant) when choosing an OTC product. They are trained to ask you some important questions in order to give you the individualised care you need.”

Now it begs the question, what training does the person need in a supermarket or chain store to suggest (prescribe) such a product when they have received no training in this matter at all? I went to the law books and looked up the Medicines and Related Substances Control Act 2003 as well as the Pharmacy Act of 2004. But in my rather layman understanding could not see any regulation prohibiting a retail store from selling schedule 0,1 or 2 drugs. Thus, there is no legal recourse it seems to make sure that such stores do not sell these over-the-counter drugs, at at the very least have a staff member that is at least semi-qualified to assist clients.

To cut a long story short, I believe that we need a consumer protection act and a consumer protection council that is empowered to look after the interests of the Namibian consumer. This will prevent stores from selling products to customers that will actually do more harm than good.

Milton Louw is the IT Project Coordinator at the Electoral Commission of Namibia. This column is written in his personal capacity as a consumer activist and the views expressed in this column are his own.

A sure way of getting nothing for something

(First Published in New Era Newspaper - 2 July 2014)

At the end of every month I enjoy going to one of the big casinos in Windhoek and trying out my luck on the machines. Sometimes I win a little, but most of the time I lose. While sitting there though, I have noticed quite a few people who seem to lose every time that I am there. These gamblers are quite vocal when they lose and loudly claim that the casino management is purposefully preventing “their” machine from winning. They believe that after all the money they have spent, they should be getting a return on their investment.

The dictionary defines gambling as “takin a risky action in the hope of a desired result”. In the case of a gambling house, the owners are sure they will get their money as there is only a certain percentage that actually gets paid out in winnings. This percentage of winnings and other legal aspects are controlled by the Ministry of Environment and Tourism through the Casino and Gambling Houses Act 32 of 1994.  

Most consumers throughout the world are aware that giving a businesses a “free-hand” will lead to them maximising their profits while giving as little bit as possible back the client. Thus in the case of casino’s, governments must put in place legislation to ensure that the gambler has a least a certain percentage chance of winning. (Of interest in the Namibian law, is that the law states “The Minister may designate any person in the employment of the Public Service as an inspector for the purposes of this Act”. Thus, technically any government employee could act as an inspector?)

Now back to the role of government regulation.

If we take the definition of gambling and we look at various business models we will notice that very often a business idea is a “risky action in the hope of a desired result”. Take life insurance: The life insurance company is taking the risk that should you die, they must pay you a certain amount of money even if the amount you have paid in does not yet equal that amount. This means, the company is taking your money in the hope that you actually live long enough to pay them more that the amount that they pay out on your death. The insurance company is of course working with a profit motive to make money for the owners so the company must do everything in their power to reduce the risk to get their own desired result – namely you should stay alive as long as possible. If the company finds it difficult to reduce your chances of dying, they must find other methods of reducing their risk.

Insurance companies thus spend a lot of time in risk management and putting in place agreements that will be of maximum benefit to themselves without scaring away their customers. Therefore most insurance companies have mechanisms in place to reduce the amount they have to pay out in the case the “desired result” in not in their favour.

Here too governments have to play their role an regulate the market to ensure the customer on the street is being benefitted in the manner they expected – especially as that customer is now no longer among the living to ensure the contract is upheld by the life insurance company. To this end the Government has created the Namibian Financial Institutions Supervisory Authority (NAMFISA). It operates under the auspices of the Ministry of Finance, and it has no profit motive.

I believe that taking out life insurance is not a gamble but a risk reduction factor in my planning of my financial matters. As a consumer, I must hope that the government through NAMFISA will ensure that my interested are looked after even when I am in my grave. Looking at the present capability and track record of the regulator, I wonder if it will be there for me against the insurance company?

Milton Louw is the IT Project Coordinator at the Electoral Commission of Namibia. This column is written in his personal capacity as a consumer activist and the views expressed in this column are his own.

Let us sue for our money rights

(First Published in New Era Newspaper - 25 June 2014)

Imagine your brother loses his job. He is a family man with two children and is now in need of a place to stay. You have a one-bedroomed flat at the back of your house that you normally rent out for N$ 2,000.00 a month. At the time he loses his job, you have no renters so you decide to give your brother and his family the chance to stay there. In addition, your brother and you agree that you will help him until such time as he gets another job and that when he gets a job, he will give you back the money that you have lost as an opportunity cost.

Now, while it is true that you are helping your brother, you are also having an “opportunity cost”.

Opportunity cost is the value of the next best choice that one gives up when making a decision. In basic terms, any decision that involves a choice between two or more opportunities has an opportunity cost. In the case above, the cost of helping your brother is going to mean a loss of N$ 2,000 to your monthly.

After three months, your brother got a job and is able to move back into a new place for him and his family. However, he has now been working for over a year and does not seem intent to repay your three months of “lost rent” amounting to N$ 6,000. What can you possibly do to get your money paid back?

Before we look at the possible solutions to this problem, let us explore another scenario.

You have purchased a second-hand vehicle and as part of the deal you exchanged your old car and paid an additional amount of N$ 20,000. After two months, the car you purchased breaks down and the vehicle is not reparable. You find out after some investigation that the dealer who sold the car to you had bought the car on auction after the car had been declared a write-off by an insurance company. When you speak to the dealer he insists that you took the vehicle “voetstoots” and that he can return your car in exchange for the broken car, BUT, he will keep the deposit of N$ 20,000 as his cost for the transaction. What can you possibly do to get your money paid back?

As can be seen from the two examples, you have done something in good faith, but the other person, either as an individual or a business, has not treated you fairly.

This is not a criminal case, but is referred to as a civil case. According to the dictionary, “A civil case is a lawsuit that usually deals with contracts and/or torts. Torts, generally speaking, are wrongful (negligent) acts that result in damage or injury.”

In the two examples above, the amounts are not over N$ 25,000 and will probably cost you more in lawyer’s fees. You may even end up getting your money but this would be an empty victory as the lawyer’s fees may exceed the amount you receive in compensation.

What we need in Namibia is a small claims court to assist the person on the street to be able to claim money that is too little to involve a lawyer.

A “Small Claims Court” is a court of law where ordinary people can handle their own cases. It is not necessary to have a lawyer (and their costs) as the forms are meant to be a kind of “do-it-yourself” where you fill in the blanks. The court has less formal and less complicated rules and procedures than the Magistrates Court.

I propose a small claims court be established where parties could settle their differences in cases up to the value of N$ 25,000. This can, and should, become part of a Consumer Protection Act.

Milton Louw is the IT Project Coordinator at the Electoral Commission of Namibia. This column is written in his personal capacity as a consumer activist and the views expressed in this column are his own.

Namibia’s form of capitalism must be reigned in

(First Published in New Era Newspaper - 4 June 2014)

Recently a family member of mine woke up to the reality of how cold it really is this winter in the capital. At the end of April the City of Windhoek came to cut his power supply because of arrears in the family water and electricity account. The amount of arrears had accumulated over a period of twelve months as the family did not every time pay the full amount due. After around a year, the family was faced with just under N$3,000 they had to pay before electricity could be re-connected.

A friend in Windhoek recently came to the end of their rental contract of a year and presumed that the contract would automatically be renewed with a possible slight increase from her present N$ 5,000 per month. Imagine her surprise when the landlady sent her the new contract with the rental agreement now being N$ 6,200 per month. This is a month on month increase of N$ 1,200 or 25%. The friend and her family earns around N$ 12,000 in total and there is no way that they will be able to afford this sudden increase. The worst part is that the landlady is aware of this, but she already has a future renter that is willing to pay the proposed N$ 6,200 per month.

The price of chicken and milk has gone up since the government started protecting these industries as infant industries. This means that imports from outside the country are made more expensive by charging administrative levies on these products from outside and in this way allowing the local producer to increase their prices as the competitions prices are now higher for the end consumer.

Looking at these issues one has to come to the realisation that the Namibian form of capitalism has lost its course.

Now what is capitalism? Capitalism is the economic system in which trade, industry and the means of production are controlled by private individuals with the specific goal of making profits. Capitalism is also reliant on a political system that agrees with the principle of capitalism and actively encourages the economic aim of individual profit making.

In a perfect capitalist world, both parties to a transaction determine the prices at which assets, goods or services are exchanged. Namibia is not such a place!

In Namibia, most of the poor consumers have very little choice, if any, on what is available to buy and at what price. The location of consumer to the service outlets, and the lack of political action still leaves the consumer as a victim in a situation where they have no bargaining power, and no protection by the legislature (parliament), the executive (GRN) or the judiciary.

It is up to the consumer activists and the media to bring an end to this never ending road to poverty for the majority of Namibians. The economic situation of this country and its citizens was ruled by the apartheid policies before independence and this was one of the main factors for the people of the country wanting change. Now, twenty years after our Independence, the economic systems that are in place still do not reflect the needs of the poor. It is high time that the parliamentarians and the state takes cognisance of the need to protect consumers through the enactment of a Consumer Charter and relevant consumer protection measures.

Milton Louw is the IT Project Coordinator at the Electoral Commission of Namibia. This column is written in his personal capacity as a consumer activist and the views expressed in this column are his own.