1 reviews | Active since Sept 2016
Edgars’ account-customers held to ransom
<p>Until August 2016 I had an Edgars credit account for over 45 years.</p> <p> A small monthly ‘Account Protection Plan’ charge introduced in February 2012 was explained as ‘insurance in case an account-holder dies, leaving the account unpaid.’ (As people die every day, I wondered at the time why the charge was added in 2012.)</p> <p> In July 2016 Edgars then began to charge account customers an additional ‘Service Fee’ of R22.80 per month.</p> <p> Not willing to accept this, on 3 August I paid for all purchases on my account, instructed Edgars in writing to close the account and cut up my ThankU card.</p> <p>In spite of five or six mails to their accounts department in Durban since then, my account remains open.</p> <p>They claim proof of my agreement to the service fee is a purchase slip for stationery bought at CNA in July (and paid for on 3 August).</p> <p> The latest Edgars statement (16 09 10 to 16 10 10) reflects Account Protection Plan and Service Fee charges for July, August and September.</p> <p> Edgars/Edcon: Fashion disaster</p> <p> Looking for answers, I discovered the Financial Mail cover story of July 16 2016. Titled "Edgars/Edcon: Fashion disaster" and written by Zeenat Moorad and Stafford Thomas, it explained a lot.</p> <p> I quote: ‘A corporate disaster tale with little precedent in SA … analysts speculate about whether Edcon can survive as it faces … a battle to keep its market share [due to] crushing R5bn in debt obligations within a year, and another R26bn in the next three years.’</p> <p> A litany of warnings followed publication of Edcon’s recent annual report.</p> <p> According to independent analyst Syd Vianello, “How [Edgars] got to this point is a tale in itself…. They were the family store. The largest clothing retailer in Southern Africa, the darling of the local sector, there wasn’t much they could do wrong.”</p> <p> [However,] ‘Edcon, like many retailers, re**** heavily on credit … [and] in the four years before … 2007 signed up a whopping 2m credit customers.’</p> <p> "They dished out credit like there was no tomorrow," Vianello says. “Banks became wary of giving Edcon much credit leeway, given its precarious balance sheet. And with 70% of its sales on credit (near R25bn debt) Edcon began to choke.”</p> <p> ‘Edgars responded by moving the chain upmarket to appeal to wealthier customers, bringing in a swathe of foreign brands. Its own higher-margin brands like Penny C, Charter Club and Kelso were relegated to dusty side racks to make way for fancier labels like Mango and Diesel.</p> <p> ‘It then embarked on a 72-store refurbishment, improving sourcing and beefing up its merchandising…. It spent R2,4bn on refurbishing stores, and expanding from 1 323 stores in 2010 to 1 500 by this year — an 18% jump in trading space.’</p> <p> “Whatever Edcon tried seemed to backfire … leaving [it] at the mercy of Absa, which shut off the lending taps….” A case, says Vianello, of Edgars "losing direction" and moving away from its traditional business of supplying middle-class SA families.’</p> <p> Social media</p> <p> A circular sent to credit account customers is clearly designed to cover Edgars/Edcon legally. Whether abuse of goodwill by foisting a R22.80 per month service fee on middle-to-low-income customers is ethical, is open to debate.</p> <p> Simple arithmetic reveals that the service fee could generate additional revenue in excess of R548m per annum for Edgars. Their account customers, it seems, are being held to ransom to prop up years of chronic mismanagement.</p> <p> Edgars/Edcon has apparently forgotten that we live in a democracy where trending protest amplified by powerful social media can latch onto and demolish an expected outcome within minutes.</p> <p> I first heard Talk Radio 702 mention complaints about the Edgars service fee before 05.00 on Sunday 18 September. On Wednesday 21 September John Robbie commented on the intensity of customer anger generated by the issue. Social media across the board have now had almost a week to pick up on the it.</p> <p>No prizes for the sane decision here.</p> <p> </p> <p> </p>
Please be advised as per investigation, your query was resolved by our accounts department, Although it has become necessary to charge a service fee, we have taken the plight of our customers into consideration and discounted this fee to R22.80 per month which equates to R273.60 yearly as opposed to the prescribed maximum fee of R60 allowed per month by the NCA (R720 yearly)
As noted within the letter , your consent will be required when next purchasing in store and should you wish to decline the implementation of the service fee, Edcon reserves the right to action your account accordingly.
Kindly note you have received a copy of the signed acceptance letter on the 31 August 2016.
You have been a longstanding customer and we thank you for your patronage and hope that you will continue to be part of the Edcon family.
Your reference number is ***/GO
Kind regards,
Edcon customer experience team,
***
Please be advised as per investigation, your query was resolved by our accounts department, Although it has become necessary to charge a service fee, we have taken the plight of our customers into consideration and discounted this fee to R22.80 per month which equates to R273.60 yearly as opposed to the prescribed maximum fee of R60 allowed per month by the NCA (R720 yearly)
As noted within the letter , your consent will be required when next purchasing in store and should you wish to decline the implementation of the service fee, Edcon reserves the right to action your account accordingly.
Kindly note you have received a copy of the signed acceptance letter on the 31 August 2016.
You have been a longstanding customer and we thank you for your patronage and hope that you will continue to be part of the Edcon family.
Your reference number is ***/GO
Kind regards,
Edcon customer experience team,
***
Edgars ‘Service Fee’: the outcome
In a review of 24 September, I mentioned having been an Edgars credit customer for over 45 years until, in July 2016, the store imposed what it called ‘a service fee’ of R22.80 per month on all credit account customers.
The term is misnamed on two counts: no tangible service is provided for said fee and payment of it is ring-fenced by legalese. Customers intimidated by the threats imp**** in the small print think they have no option but to pay.
Not willing to accept this, on 3 August I paid for all purchases on my account, instructed Edgars in writing to close the account and cut up my ThankU card.
In spite of five or six mails to their accounts department in Durban my account remained open and the current statement (16 09 10 to 16 10 10) reflected Account Protection Plan and Service Fee charges for July, August and September.
Looking for answers, I found them in the Financial Mail cover story of July 16 2016.
Edgars/Edcon: Fashion disaster by Zeenat Moorad and Stafford Thomas explained a lot. All credit account customers are urged to read and learn from it, as I did.
It appears that through chronic mismanagement for 13 years or more the Edcon group incurred debt in excess of R31bn, of which R5bn has to be repaid by mid-2017.
In view of the timing – from July 2016 – foisting the offending R22.80 per month tariff on more than two million unsuspecting Edgars account customers looks suspiciously like an attempt to recover around R548m of the R5bn needed by Edcon by mid-2017.
In a swift response to my HelloPeter.com review of 24 September Edgars invited me to call at my nearest store. I did so on Friday 30 September, and found that the accumulated service fee charges for July, August and September had miraculously vanished from my account.
I settled a remaining balance of R17.20 (for the equally euphemistically named Account Protection Plan, I suspect) and insisted on final closure of my account before leaving the premises.
What clearly emerges from my stare-down with Edgars/Edcon is that, countrywide, concerned customers hold in their hands the same deterrents to abuse of their goodwill I app****:
· Vigilance;
· Dates, facts and figures;
· Non-payment of unclear or untenable debits unless satisfactorily explained; and
· ‘Getting their story out there’ via HelloPeter or their social medium of choice.
Hilary Phillips
Edgars ‘Service Fee’: the outcome
In a review of 24 September, I mentioned having been an Edgars credit customer for over 45 years until, in July 2016, the store imposed what it called ‘a service fee’ of R22.80 per month on all credit account customers.
The term is misnamed on two counts: no tangible service is provided for said fee and payment of it is ring-fenced by legalese. Customers intimidated by the threats imp**** in the small print think they have no option but to pay.
Not willing to accept this, on 3 August I paid for all purchases on my account, instructed Edgars in writing to close the account and cut up my ThankU card.
In spite of five or six mails to their accounts department in Durban my account remained open and the current statement (16 09 10 to 16 10 10) reflected Account Protection Plan and Service Fee charges for July, August and September.
Looking for answers, I found them in the Financial Mail cover story of July 16 2016.
Edgars/Edcon: Fashion disaster by Zeenat Moorad and Stafford Thomas explained a lot. All credit account customers are urged to read and learn from it, as I did.
It appears that through chronic mismanagement for 13 years or more the Edcon group incurred debt in excess of R31bn, of which R5bn has to be repaid by mid-2017.
In view of the timing – from July 2016 – foisting the offending R22.80 per month tariff on more than two million unsuspecting Edgars account customers looks suspiciously like an attempt to recover around R548m of the R5bn needed by Edcon by mid-2017.
In a swift response to my HelloPeter.com review of 24 September Edgars invited me to call at my nearest store. I did so on Friday 30 September, and found that the accumulated service fee charges for July, August and September had miraculously vanished from my account.
I settled a remaining balance of R17.20 (for the equally euphemistically named Account Protection Plan, I suspect) and insisted on final closure of my account before leaving the premises.
What clearly emerges from my stare-down with Edgars/Edcon is that, countrywide, concerned customers hold in their hands the same deterrents to abuse of their goodwill I app****:
· Vigilance;
· Dates, facts and figures;
· Non-payment of unclear or untenable debits unless satisfactorily explained; and
· ‘Getting their story out there’ via HelloPeter or their social medium of choice.
Hilary Phillips