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Help and advice from Jac Roper

03 April, 2009
This month Jac looks at Payzone, the mobile networks and energy firms
Page 16 

== You'll soon have to pay to stock top-ups! ==

Are you making anything on mobile top-ups? I can hear the collective 'don't-get-me-started' groan from here. Steve Dyer, who runs Knight Brothers at Thornfalcon Garage in Taunton, sent me copies of two letters he had received from Payzone. One informed him that O2 and T-Mobile had reduced the agent commission rate by 1% and the other said exactly the same but referred to Orange and Virgin.

"Here we go again!" he says. "I have requested a copy of my contract from Payzone telling them that I will be terminating. Let's see if that triggers a response. The other alternative is to consider levying a small charge for all top-ups, say 50p. Then the customer can decide to top up here or go elsewhere, I really don't care any more. But it would be nice to see other retailers make a stand."

The end result is that, following Vodafone's example, almost all the networks are now paying just 2.5%. I can, I guess like many of you, remember when this percentage was in double figures as the networks were building.

The company pointed out in its letters that the reduced rate was not exclusive to the Payzone retail network and highlighted its 'richer basket of commissions' which include payment facilities for gas, water, electricity, rent and council tax plus money transfer and credit/debit cards.

I asked Steve if he had considered any of these. He does his credit/debit transactions through Esso. "They do a good job of polling it for us." But he said he'd discuss some of the other services with Payzone.

His next email said: "I have enquired about the margins offered and was told that with regards to utilities, ie electricity, water etc the margin is capped at 10p per transaction. It doesn't take Einstein to work out that a 10 payment is going to earn us at most 10p or just 1%."

Unfortunately, mentioning footfall to Steve (as Payzone did) is the proverbial red rag.

"Then of course there is that all important FOOTFALL. So that's all right then! I am assuming that if someone pays, for argument's sake, a 100 bill then we still only get 10p or 0.1%. Great when bank card charges are running at 1.9% or 9p per transaction depending on the card."

As Steve is quick to add: "They are our customers. Not theirs."

As a postscript to this I should add that rival company PayPoint has told me in the past that it will not tolerate its agents sticking a little extra on the transaction cost. I believe it is in their contract.

== The mystery of the freebie car wash ==

Subhash Varambhia is a newsagent and a regular commentator on a column that I have similar to this one in Forecourt Trader's sister magazine Convenience Store. He writes: "On my annual leave (Christmas Day) we travelled to London for a visit. We stopped at a BP garage in Mill Hill to top up the mobile phone.

"The garage attendant pointed out that if we spent 20 on the top-up on any network, we would get a 'Gold' car wash free! That's three star and worth 8.

"By contrast if I sell 20-worth of mobile credit, the most I would get is 80 paltry pence. That's at the going rate (at the time) of 4%."

He has drawn his own conclusion that this is not a level playing field but a steeply-inclined one. However I doubt very much if any retailer is getting a good deal out of any of the mobile networks.

The deal also sounds like a helluva promotion. Not one my local garage is likely to be able to afford to offer - a spare plot of land next door to its car wash has just been concreted over and two men with hoses are offering a hand-washing service.

== Are you ready yet to make the switch? ==

I hesitate to ever advise anyone to switch their utilities supplier given the cowboyish tactics of some suppliers. Still, a new supplier will give you a new deal - you just have to make sure that you get your notice in to quit the minute you sign up. That way you will always be a new customer.

However, here are some pretty persuasive figures from Business Advisory Service Ltd which I discovered via The Telegraph Business Club.

The company describes itself as an independent utilities brokerage that provides companies with a completely free service to ensure that they are getting the best possible value and service from utility suppliers.

The literature says: "We are not tied to any particular supplier and have vast experience of the industry. We are completely different to other brokering/purchasing companies. Our services are completely free. There are no signing-on payments, no monthly payments and you do not have to pay a percentage of your savings to us. Our fees are settled by the suppliers at their own costs. We operate in the same way as an insurance broker."

The company claims that it can save you up to 40% on electricity and gas, and up to 60% on telecoms. I'm passing the number on just in case: 0845 1800 777.