@SouqKuwait shifts costs to Customers

How do business get ahead and report their numbers “in the black” on their financial statements? Legally, they attempt to cut costs or increase revenues. In this case, Souq.com is shifting part of the burden of the cost onto us, the Customers, as well as increasing their revenues by charging us for previously free services.

It first started out with their COD fees (Cash-on-delivery) of KD1 per delivery, meaning if you are buying goods from multiple suppliers, you could very well find your delivery costs in excess of the value of the goods provided. You might not think this matters, however, all of the sudden for 1,000 shipments a month (estimated), there is an extra KD1,000 out of thin air. That is increasing revenues.

When it comes time for payment, you are provided a few options, most notably K-NET and Credit Cards (Mastercard, Visa etc).


K-NET is a DEBIT CARD meaning you have a positive balance from which you pay for goods and services, i.e. they money is YOURS.

Credit cards are negative balance, meaning you are spending money you do not have at the moment. Banks charge fees for credit cards as they are effectively lending you the money.

Whenever you pay at a store, banks charge said stores a fee for collecting money on their behalf (POS – Point-Of-Sale), that fee is (or was as I used to be an accountant in 2007) 0.5% on K-NET and 2% for Mastercard/VISA (2.5% for American Express).

This means that when you shop at any store and pay them 10KD for example, the bank collects a fee of 50fils for K-NET payment, so the company effectively sold you the goods for KD9.950, or 200fils for Credit cards meaning net KD9.8.

It is for this reason that when you go shopping at a small store they often refuse to accept Credit Cards, as it costs them more and reduces their profit. Or, some of the more savvy shop owners insist on charging you more, whether or not this is legal is beyond my capacity.

Companies agree to pay this money to banks in order to facilitate easier/quicker collections from customers, imagine the tediousness of being asked to pay cash for everything, not to mention the security risk of carrying all that cash. The risk is also borne by the company as it would have to take the appropriate measures to protect that cash during its transit from its tills to the banks.

So, what is Souq.com doing?

If you select to pay via Credit Card, they are charging you more. Based on my last purchase, it is about 0.8% i.e. cutting costs.

Whereas if you go to their competitors; anyone who facilitates online payment and delivery in Kuwait (like maybe Blink.com.kw), you will find that you are not charged more for Credit Card payments.

Bad form Souq.com

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