Safaricom has introduced an expiry date on its loyalty programme, popularly known as Bonga Points, in a bid to encourage redemption and unlock the underlying revenue that totalled Sh4.5 billion as of march this year.
The listed telco has told subscribers that all unredeemed Bonga points will now be expiring after three years, meaning that those accumulated before December 31, 2019, will expire effective January 1, 2023.
Safaricom termed the move to put an expiry date on the loyalty points a business decision aimed at encouraging redemption.
The value of outstanding or unredeemed points has been going up over the years—hitting Sh4.5 billion in March 2022 from Sh3 billion in 2015— despite the company expanding the options for redemption to include the purchase of shares at the Nairobi Securities Exchange (NSE), air time, phones and even plane tickets.
The outstanding value of the unclaimed points has doubled over the last seven years, from Sh2.2 billion in 2015 to Sh4.5 billion this year.
“Effective January 1, 2023, all Bonga points older than three years will expire and will be unavailable for redemption,” said Safaricom in updated terms and conditions for the loyalty programme.
“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.”
The loyalty points are recognised as a liability, or deferred income, in Safaricom’s books and are only booked as revenue upon redemption by customers either for airtime, SMS, merchandise or shopping.
The company also recognises loyalty points on churned SIM cards as revenue.
Safaricom uses the same concept to recognise airtime revenue. Prepaid airtime sold to customers is held as deferred revenue until the customer uses it.
The loyalty scheme, introduced in January 2007, gives subscribers one Bonga point for every Sh10 spent on the Safaricom network on voice, mobile data and SMS, and for every Sh100 spent on the network for M-Pesa transactions.
Business customers also earn loyalty points when they achieve their sales targets and redeem the points at the completion of revenue contracts with Safaricom.
Airtime and talk time minutes bought using Bonga points expire after seven days, and are prioritised for usage ahead of charges from the main airtime account.
The telco awards four minutes of talk time for 50 Bonga points, graduating to 280 minutes for 4,000 points.
For those redeeming airtime, the redemption ratio ranges from Sh3 worth of airtime for 10 points, up to Sh600 worth of airtime for 2,000 points.
