Supermarkets cash in on currency shortages

CUSTOMERS who wish to access cash from retail shops using the cash-back facility are now required to spend a substantial amount of money on goods to get the money.

A survey by Standardbusiness last week established that most retail shops now require customers to buy goods worth at least $15 in order to get $100 cash through the cash-back facility while others like OK will only give $100 to customers that would have spent $30 or more.

This comes as demand for cash at the banks remains high, with maximum withdrawals capped at $100 per day at most banks. Zimbabwe is grappling with a critical cash shortage which began early this year.

The cash-back facility is no longer the saving grace for the banking clientele as it is now based on a "give and take model".

Nearly three months ago, as the cash shortages began to bite, retail shops quickly became an alternative source of cash but the shops began putting in place requirements that beneficiaries buy some goods first although the amounts were not as high. Customers were also able to access as much cash as they required, but the situation has changed as most shops now give a maximum of $100.

Spar managing director Terence Yeatman told Standardbusiness that market developments were to blame for the current situation.

"Our current cash-back policy is as follows: for every $15 spent on groceries, you can request up to $100 cash back. The maximum limit has been set at $200. In order to receive $200, you have to spend $30 on groceries," Yeatman said.

"Cash-back as an additional service, hopefully goes some way in addressing the requirements of some members of the community who shop at Spar," he said.

Back in May this year, a customer was only required to spend an average of $5 to use the cash-back facility and get any amount of cash they required.

But now, due to fears over the impending introduction of bond notes, increased cash shortages and banks seemingly moving at a snail's pace to alleviate the shortages, retailers have increased the amount one has to spend in their shops and the cash disbursed is now limited.

Analysts have also noted that as the number of customers looking for cash in retail outlets grew, retailers were now using the cash-back facility as a way to lure customers through the "buy first" technique to push sales.

Food World marketing and sales director Tendai Chisvo said their approach to the growing demand for cash-back in stores was to allow customers to get "five times their amount of purchase as cash-back".

"The current prevailing economic situation has resulted in us making these decisions. Our aim is to serve every customer in a fair and impartial way, hence the need to apportion cash-back to all our customers equally," Chisvo said.

Despite the new "buy first" requirement instituted across different retail shops, a snap survey from Standardbusiness has shown that the number of cash-back seekers has remained high, an indication that people are desperate for cash.

"If by changes you mean a surge in customers requiring cash-back, then yes. There has definitely been an increase in cash-back requests," Chisvo said.

The cash-back facility has played a significant role in the increase of point of sale (POS) transactions by an average of 4,2% since the central bank dropped the charges nearly two months ago.
Confederation of Zimbabwe Retailers president Denford Mutashu said with the growth in POS transactions, retailers might soon be unable to give out cash to customers.

"Another area where they [retail stores] may soon face challenges is that not many customers are using cash to buy groceries due to the rise in the use of POS machines. As a result, at times retailers might not have enough cash to issue out cash-back," Mutashu said.

He said customers were always encouraged to visit their banks for cash and go to the supermarket only to make a purchase for groceries using their cards.

Most of the cards used to swipe on POS machines are from Stanbic Bank, CBZ Bank, People's Own Savings Bank, ZB Bank, MBCA Bank, BancABC, FBC, Cabs and NMB Bank, among others.

Recently, the central bank governor, John Mangudya, told Standardbusiness they would not be importing any new currencies soon, as they focused on encouraging the use of plastic money.

Bankers and the Confederation of Zimbabwe Industries have, however, called for the use of the rand as a transactional currency, while the dollar becomes a reserve currency.