Points for school fees

The largest supermarket chain in Kenya is a company called Nakumatt. They have styled themselves on the US's Wallmart supplying everything from fresh produce to DIY. They have numerous stores across Nairobi, and are opening additional stores all over Kenya, and have also recently expanded into Uganda and Rwanda.

While we often complain about their service (and by South African or US standards their service is shocking), they are one of the few supermarkets available to us here in Kenya, and so I suppose we bite the bullet and spend our money there.

Like many supermarkets, they have a loyalty program. Nakumatt gives us 1 point for every Ksh 100 spent in store. Ksh 100 is worth about USD 1.23 or ZAR 8.27. These points can be redeemed on further purchases in store at a rate of 1 point equals 1.2 Ksh. So in essence they are giving a 1.2% discount. On occasion Nakumatt runs special promotions to earn double points, or to increase the redemption value. I am not sure how this compares with other supermarket incentive schemes around the world, but 1.2% seems like a pitiful incentive to shop there. Perhaps its the fact that Nakumatt has a functional monopoly in Kenya that leads them to believe that their customers will be loyal with such a small incentive. I use the term functional as there are 2 other supermarket chains in Kenya - Uchumi and Tusky's, however neither of these are effective competition for Nakumatt. Until recently Uchumi was under receivership, while both Tusky's and Uchumi don't have the number of stores and reach that Nakumatt has.

Considering my generally negative feelings about the loyalty program I was pleasantly surprised this week when I spotted a poster at one of the Nakumatt branches that read "Redeem your points at 2 Ksh per point to pay your school fees, or buy school supplies." I had to know more - I asked a manager and he explained that I could fill in some forms and Nakumatt would convert my points into cash to pay my school fees!

I don't have any school fees to pay, however this is a really great idea. The conversion rate isn't much improved, but the mere fact that they will actually pay cash out (albeit a check issued to the school) in lieu of points is a brilliant idea and a great service to the community. Since we have been in Kenya we have been asked at least 5 times for loans to pay school fees. These fees are usually payable up front at the start of the term/year and can be a serious financial burden on many Kenyan's.

So, kudos to Nakumatt for this initiative. Perhaps Nakumatt could extend this offer to enable people to trade points for donations to registered charities?