Don’t discount; sell smart!

Chicken wings being cooked slowly over charcoa...

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Lowering prices when your sales trail goes cold has potential for future conflict

When times are tough, the not-so-tough get discounting. The temptation to ‘give away’ what you cannot sell is strong – at least there is money coming in and numbers on the board – but it is a guaranteed hiding to nowhere. Sure, you are getting turnover, but profits are small (or sometimes non-existent); there is no customer loyalty; and when times improve, you are going to have a hard time convincing those customers to stick with you and pay more.

via Don’t discount; sell smart!

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Consumer Protection Act explained

There’s always one. One schoolkid – it’s usually a boy – who will direct what he thinks is a terribly clever, brazen question to a visiting speaker.

Last week was no exception. I was talking to a group of high school kids about the Consumer Protection Act at the invitation of their business studies teacher.

They were a lively bunch, flinging up their hands to ask mostly very intelligent questions. Then it came, delivered with a straight face: “So what happens if someone goes to an escort agency, and they aren’t happy with the service…?”

Well, he’d have redress, of course, as long as that service wasn’t illegal.

When the act becomes effective on April 1, it will give consumers the right to demand quality service and to full disclosure of the price of goods and services, and protection against false, misleading or deceptive representations.

Predictably, the section of the act which is shaking up the marketplace most is Section 56: “Implied warranty of quality”.

For decades, many retailers have adopted a “sorry for you” attitude when their customers return problem goods.

Either they refuse to accept that the goods were defective in any way, or they begrudgingly take the goods back and issue a credit note, valid for a short period of time.

In short, they’ve assumed total power to decide how to respond when problematic goods are returned.

Actually, common law has for many years protected consumers against defective goods – though few realise this – but it doesn’t give consumers the right to decide how they’d like to be compensated, leaving suppliers to decide what to do, if anything.

And manufacturer or store warranties limit recourse to repairs, because it’s obviously much cheaper for a company to repair an item than replace it or refund a customer’s money in full.

But the act has turned that status quo on its head, giving the consumer the power to decide on the remedy – and he or she is backed up by a Consumer Commission and Consumer Tribunal which have the power to impose hefty penalties on companies which fail to comply with the terms of the act.

If goods bought by consumers fail in some way, the consumers get to decide which of the three Rs – a refund, replacement or repair – they want.

via Consumer Protection Act explained – South Africa

Banking association and Khula in deal to help small business

SMALL-scale enterprises could now enjoy better access to financial services and low financing costs following the signing of a co-operation agreement between state-owned developmental funding agency Khula Enterprise Finance and the Banking Association of SA (Basa).

Small businesses in the country are regarded as the main contributors to job creation, something that SA — with an unemployment rate of 25% by some measures — is working hard to encourage.

Khula and Basa said they would endeavour to facilitate the formation of a credit bureau for small and medium enterprises, the first of its kind in Africa, and would provide access to an information portal for small businesses.

They would also conduct research, facilitate skills transfer, assist in the development of a national mentorship programme and promote financial literacy.

In April, Economic Development Minister Ebrahim Patel told Parliament Khula was to become a wholly owned subsidiary of the Industrial Development Corporation (IDC) with a budget of R2,8bn this year. It would incorporate the South African Micro Finance Apex Fund as well as the IDC’s small business loan book.

Khula is SA’s main small business financing vehicle but has been hampered by underfunding and, until recently, its restriction to wholesale financing. Its agreement with Basa comes at a time when banks are often seen as doing too little to finance small business development.

Basa MD Cas Coovadia, however, said statistics showed that the sector provided 95% of funding for small businesses. The proposed credit bureau could change how the banks look at risk in the market, he said.

“The (small business) credit bureau initiative will assist banks to access reliable information on the day-to-day transactions of the business and not just the individual.”

The role and mandate of the publicly funded Khula should be to develop markets, allowing the private sector to come in with funding, Mr Coovadia said.

He said there was a need to develop more risk-appropriate evaluation models and products tailored to small business development.

“Here we are talking about a very focused, on-the-ground, issues-based collaboration. The first thing we need to do is to sit down and have an assessment of what we have been doing independently and agree on what we see as each other’s role,” Mr Coovadia said.

via BusinessDay – Banking association, Khula in deal to help small businesses

You cannot just break an agreement

To determine if the mistake was reasonable the SCA considered whether Slipknot was culpable in the mistake. Here it relied on Du Toit’s submission that Slipknot was blameless as the misrepresentation as to the nature of the document came from his brother and his nephew. The SCA then considered if there was a duty on Slipknot to inform Du Toit of the terms relating to the suretyship terms and found that “even a cursory glance” at the documents would have alerted Du Toit that he was signing a suretyship. The SCA also considered the submission that Du Toit was a farmer and found it irrelevant as he was a trustee with trusts of his own and that Slipknot was entitled to rely on his signature as a surety just as it was entitled to rely in his signature as a trustee.

The SCA therefore found that Du Toit’s mistake was not reasonable and there was no basis to suggest that Slipknot knew or ought, as a reasonable person, to have known Du Toit’s mistake.

The message here is clear and simple: read what you sign.

via Read what you sign – Lexology

South African Post Office – SAPO

The South African Post Office Group currently consist of a number of divisions and subsidiaries operating in the fields of mail, financial services, logistics, property, electronic commerce and retail services. Traditional collection, sorting and delivery of letters and parcels constitute the primary business activity of the group, responsible for nearly 65% of the groups revenue in 2010/12. In the 2010/11 financial year nearly 1,5 billion mail pieces were processed. In order to process and distribute this volume of mail items the group operates 6 large mail centers and more than 40 depots across the republic. The group has, however, suffered a decline in traditional mail volumes over the last 3 years. This decline is in line with similar declines experienced by the majority of postal operators across the world as traditional mail as a communication medium is substituted by electronic alternatives such as email and more recently cell phones.

The second largest activity of the group is financial services which it offers through its savings banks that operates under the name Postbank. The Postbank itself was formed in 1910 and is the largest savings bank in the country. More than 6 million customers have accounts with Postbank making it one of the largest banks in South Africa as measured by customer number. The Postbank is a deposit taking institution only, and thus does not offer credit products, only savings and investment products.

via South African Post Office – Wikipedia

SABC

Official SABC website

A throwback to the Apartheid days, many opposition politicians believe the SABC to be the mouthpiece of the ANC government or “SANC”, just as it was that of the National Party. Despite a change in government, this public perception was reinforced when, in August 2005, the SABC came under heavy fire from non-affiliated media and the public for failing to broadcast a scene whereby Deputy President Phumzile Mlambo-Ngcuka was booed offstage by members of the ANC Youth League, who were showing support for the newly-axed ex-Deputy President, Jacob Zuma.

Rival broadcaster eTV publicly accused SABC of ‘biased reporting’ by failing to show the video footage of the humiliated Deputy President, but Snuki Zikalala, Head of News and ex-ANC spokesperson retorted by stating that their cameraman was not present at the meeting, a claim later established to be false when eTV footage was released which showed an SABC cameraman filming the incident.

SABC’s government connections also came under scrutiny when, in April 2005, Zimbabwean president Robert Mugabe was interviewed live by Zikalala, who is a former ANC political commissar. The interview held was deemed by the public eye to have side-stepped ‘critical issues’ and controversial questions regarding Mugabe’s radical land-reform policies and human rights violations.

In May 2006, the SABC was accused of self censorship, when it decided not to air a documentary on South African President Thabo Mbeki, and in early June requested that the producers (from Daylight Films) not speak about it. This has been widely criticised by independent media groups. In response, the International Freedom of Expression Exchange issued an alert concerning the SABC’s apparent trend toward self-censorship.

In June 2006 the International Federation of Journalists denounced the cancelling of the Thabo Mbeki documentary, citing “self censorship” and “politically influenced managers”.

Also in June 2006, SAfm host John Perlman disclosed on air that the SABC had created a blacklist of commentators. A commission of inquiry was created by SABC CEO Dali Mpofu into the allegations that individuals were blacklisted at the behest of Zikalala.[11][12]

Critics, including the influential newspaper, Mail and Guardian (Vol 24, No 35) have accused the broadcaster of cultural myopia by failing to recognize the diverse cultural mix of South Africa and excessive favoring of certain ethnic groups in their choice of entertainment offered particularly by the TV services.

via South African Broadcasting Corporation – Wikipedia

Financial Services Board

The Directorate of Market Abuse is a committee of the Financial Services Board with the statutory mandate to investigate cases of Market abuse and to enforce the prohibitions against market abuse in the Securities Services Act, 36 of 2004 (SSA).

Market abuse consists of insider trading (prohibited in section 73 of the SSA), market manipulation (prohibited in section 75 of the SSA), and false reporting (prohibited in section 76 of the SSA).

If the DMA is of the opinion that the SSA has been contravened, it will take enforcement action against the offender. Such cases could be referred to the Enforcement Committee of the FSB, or handed over to the prosecuting Authorities.

The prohibitions against market abuse, the penalties and the DMA’s powers to investigate are set out in Chapter VIII (sections 72 to 87) of the SSA.

The DMA makes a media release after every meeting to update the public on its current investigations. every enforcement action is published once it is completed.

The Johannesburg Stock Exchange, in consultation with the DMA, published a booklet on insider Trading and Other Market Abuse, including the effective management of price sensitive information An electronic version of the booklet is available on this page.

Financial Services Board Internet Site