Take the phone and run

So it’s the worst Christmas for years if you’re a retailer. The NCA has cut the easy credit card hand out scheme that got people spending (much) more than they really had. I found another way to get some credit, and am yet to find the catch.

You might have seen Makro, Game, Hyperama advertising their ‘Cash voucher’ deals that come with a cellphone contract purchased instore. Having to shell out a bunch of cash for some big-ticket items for my new bachelor pad, I looked into it further at Makro, and here’s the deal:
Week-end everyday contract (R200 activation + R135 x 24months)
Free nokia ring ring phone (value R300)
120 off peak minutes
R2900 gift voucher
Do the math and for R200 upfront you get all that. I looked at it as a way to get an upfront loan that I pay off over 2 years.
Some simple sums gives you: 200 + 135*24=R3440
Some better sums with Excel takes interest into account {PV(8%/12, 24, 135)}+ 200 = 3184.

So that’s it, in present terms you get all the above for R3184, what is the catch?
a)R2900 gift voucher doesn’t cost them R2900, assume an average 30% markup on store items and it’s costing them R2070.
b)They’ve done the research, and the average spend will be well over the R135/month.

Of course I’m a geek and went for a fancier phone, but my 3G enabled Samsung still came with two grands worth of spending money, which I immediately spent. If you need to buy anything big, can discipline yourself to only use the free minutes and don’t mind waiting around for about 45 minutes then it’s silly not to go for it.

What's even worse is the people who still pay R3000+ for a fancy pre-paid phone.