Large retailer takes 'convenience fee' on prepaid electricity, sparking outrage

A South African retail giant is under fire for charging a convenience fee on prepaid electricity, with consumers calling it unfair and exploitative.

Have you no shame?

That's the charge being put to retailers who add so-called 'convenience fees' to pre-paid electricity purchases by people like CapeTalk listener Kashiefa Achmat.

Achmat is one of the administrators of the Facebook group 'Housing Assembly', which describes itself as a 'a city-wide movement committed to building a movement of all working class people living in bad housing conditions'.

Achmat recently posted a picture of the receipt she received from Shoprite after purchasing prepaid electricity.

To her horror, of the R100 spent, the retailer took a 'convenience fee' of R1.30 for the transaction.

Taking to social media, Achmat raged, "There's no shame in these scrupulous business [SIC] when they steal from us! Who benefits from this R1.30? How much more profit does the CEO of Shoprite want? We need to rethink buying at Shoprite."

Speaking to CapeTalk's Lester Kiewit, she says it's the first time she has seen this fee deducted from her purchase.

"Here in Maitland, Pick n Pay closed, and we normally got our electricity from Pick n Pay, and we never had any charges; we got the amount we paid for."

Achmat says she was told by the manager of the store that it is the City of Cape Town making the deduction, and not the retailer.

She says it's disappointing that a practice which consumers had complained about at spaza shops has now been adopted by the larger stores.

"The Spaza shops started it, and we complained, and they stopped, and now it's the big retailers. Every cent they are reeling in; it's like stealing from communities."

CapeTalk reached out to Shoprite, but they declined an interview, providing the following statement instead:

The decision to implement a R1.30 convenience fee on prepaid electricity purchases was guided by two factors: ensuring the sustainability of the service and aligning with standard practice in the banking industry.

Sustainability of the service

The commission earned on prepaid electricity transactions has been reduced to the point where it no longer covers the cost of providing this service.

Industry practice

Banks have been charging varying convenience fees for some time, while the Shoprite Group has until now subsidised these costs on behalf of its customers."

To listen to Kashiefa in conversation with Good Morning Cape Town's Lester Kiewit, click below: