In an effort to stimulate redemption and increase the underlying revenue, which stood at Sh4.5 billion as of March this year, Safaricom has added an expiry date to its loyalty program, widely known as Bonga Points.
All unredeemed Bonga points will now expire after three years, the listed telco has informed users, so points acquired before December 31, 2019, will expire starting on January 1, 2023.
Safaricom described the decision to provide loyalty points with an expiration date as a business strategy made to promote redemption. Over the past seven years, the outstanding value of the unclaimed points has doubled, going from Sh2.2 billion in 2015 to Sh4.5 billion this year.
In revised terms and conditions for the loyalty programme, Safaricom stated that any Bonga points older than three years will expire and become ineligible for redemption as of January 1, 2023.
“Your Bonga points will also expire immediately in the event that your line has been deleted as a result of inactivity and in accordance with the terms and conditions for the use of the Safaricom services.”
In Safaricom’s accounts, the loyalty points are recorded as a liability, or deferred income, and are only recorded as revenue when they are redeemed by consumers for airtime, SMS, goods, or shopping. The business counts the money from churning SIM cards’ loyalty points as well. Safaricom recognises airtime revenue using the same idea. Customers that purchase prepaid airtime are not reimbursed for it until they use it.
A subscriber receives one Bonga point under the loyalty programme, which was launched in January 2007, for every Sh10 spent on the phone, mobile data, and SMS on the Safaricom network as well as for every Sh100 spent on M-Pesa transactions.
When they meet their sales goals, business clients can also earn loyalty points, which they can then use to redeem services from Safaricom after their contracts have ended.
Bonga points can be redeemed for airtime and talk time minutes that have a seven-day expiration date and are used before charges from the primary airtime account. For 50 Bonga points, the telco offers four minutes of talk time; this amount increases to 280 minutes for 4,000 points. The airtime redemption ratio varies depending on the number of points, from Sh3 for 10 points to Sh600 for 2,000 points.
For SMS redemptions, the prize varies from 20 messages for 15 points to 3,500 texts for 600 points, with an expiration of between 24 and 30 days. However, the value of Bonga points has fluctuated throughout time, based on the goods or non-goods being redeemed.
The telco has been expanding the list of products and services that may be exchanged for Bonga points in an effort to stimulate wider redemption beyond the purchase of airtime, data, phones, and accessories.
The Lipa Na M-Pesa Buy Goods option and the Paybill option both allow for the redemption of points for retail purchases as well as the settlement of specific bills. Additionally, subscribers can exchange their points for Kenya Airways airfare. The telco also made it possible for customers to use their points to buy shares on the NSE last year, offering Sh1 for every five loyalty points used for investment.
Through a programme called Bonga For Good, Safaricom allowed customers to donate their points to those in need in order to purchase goods and services at the height of the Covid pandemic.
