South African Rip-offs Ranking

[Jedisword]

South African Rip-offs Ranking


1 Telecommunication 400% overpriced

2 Music CD & DVD 300% overpriced

3 Banks 300% overpriced ( eg. cash deposit fee 1% ,service fees,admin fees,transaction fees .....)

4 Motor car +- 60 % overpriced


This is based on my personal observation as an well travelled Businessman ,Any more Ideas ?

[pat22]

Yep. Totally true. I've been all over the place. South Africans just seem to accept this. I've no idea why.

We just don't whinge enough. Government should also address these overpricing issues.

[lucifir]

I totally agree. But really, what can the common south african do about this stuff? Most of the companies could not give a damn as they consider our market share to be minimal and thus don't care if we do complain??
[}:)]

[jimmy]

For the high banking costs there may be an explanation: banks spend millions on secutity of our money in SA. Banks with cheaper cost may not survive in SA due to crime etc. It is still not nice, but at least the pricing is not based on greed.



"I am jimmy and I approve this message"

[loosecannon]

the bigest ripoff was a few years back and not so much now when there was special import tarrifs on electronic goods to help the local manufacturers ... what landed up happening was the local guys making a massive profit and no benefit been passed to consumer/employeee ...

[Gooku]

Indeed our motor cars & banking are unreasonably overpriced.

It is time some actions needed here.

[bb_matt]

I know, lets all stop buying cars ! :D

Seriously though, one of the worst aspects of car prices in this country is second hand cars.

In the UK, you can pick up an old second hand car that's passed it's MOT for the equivalent of R6000.
Sure, it's not going to be the most upmarket car on the road - probably a polo or something similar, but still, it's a car.

Over here, anything under R20 000 is a lemon.

I'm not sure how we got to the point we are at regarding prices of ALL things - one thing missed from that list was the price of food, which as we all know, skyrocketed out of control in 2001 and never recovered, even though the rand did and even though we're being told how strong our economy is.

The only things that ever seem to go down in price are electronic goods and that's only because it's a continuous upgrade cycle that drives the prices down. The "next best thing" comes along etc.

Oh yes, and as for the budget, good news, but ...

Who wants to make a bet on the petrol price having a serious hike in the next 3 months ?
That's exactly what happened after the last budget when clever trevor gave us all a break ...

[Gooku]

I am contemplating a plan - since received many requests to fight down car prices.

I just need to find my "lost insanity" to complete the last part of the master plan :)

[fergus]

Don't forgot software prices. These are thumbsucks but I'm sure they're not too far off:

Windows XP Proffessional - R1500
MS Office - R4000
Adobe Photoshop - R6000

I'm talking about the retail versions. Its so ridiculous. Probably 95% of Photoshops in use are pirated and its not suprising.

[Razer0]

Im not a smoker but my mates buy boxes of whatever brand for something like R15 these days?
Someone is coining it big time...

[bb_matt]

Well, I have no sympathy to smokers and the price they pay.

I gave up three years ago and never looked back.

Personally, I think they should be R30 a box and that extra R15 should go directly to subsidising low cost housing, education and health services.

[kb]

For the high banking costs there may be an explanation: banks spend millions on secutity of our money in SA. Banks with cheaper cost may not survive in SA due to crime etc. It is still not nice, but at least the pricing is not based on greed.


This is not correct last year I saw a report showing that our retail banking margins were twice that of the overseas banks.
Unfortunately I cannot find the original source.

[Gooku]

We have much work to do here,wthin a week I will announce the new target for consumer activism

The new Villain will either be the "Banca" (banking cartel ) or Motor cartel

but only one of them will be our target..

[werner]

Personally, I think they should be R30 a box and that extra R15 should go directly to subsidising low cost housing, education and health services.

I'd be the happiest bloke alive if it was R30 a box tomorrow. Currently paying +-R60 a box in london 9if you buy retail). Haha

Just another thing to note: the price of clothes in s.a. has also gone for a bit of a hike recently. It is cheaper to buy babyclothes in london (the third most expensive city in the world) and send to s.a. than what it is to buy the equivalent stuff in s.a.

[Peapod]

i concur. groceries are also pathetically expensive here. In the UK groceries are mocked as the most expensive in Europe yet shopping in a UK supermarket in July with my mom, i almost broke down and wept. She did her entire months groceries for R900 equivalent including all their wine supplies! BLERGH!!!

[krycor]

I think something needs to be done... I remember at one stage a house costed about as much as a car. Anyways i think its all fixed-price wise and somebody needs to take them up on it,.. i mean when the rand devalued the prices sky rocket quickly but when the rand recovers the prices remain wtf ? i think some of the poverty in this country is self imposed by our own companies and perhaps the goverment who sits by idle and just says 'ya theres a problem...' but does not do anything.

[CyberMatix]

We don't have any effective anti-trust legislation in SA such as in the USA and Europe. Well that's understandable I guess because then a monopoly like Telkom & Sentech would be illegal right off the bat.

Remember that a private business works on Market Principles, with the most fundamental being, "Charge what the market will bear". The market for cars as an example will bear the increased prices, because the people will keep on buying cars, no matter if it is 60% or whatever more expensive than the o/s prices.

One of the things anti-trust legislation protects the consumer from is market collusion, such as the emergence of cartels. All we have to protect us is the pathetic SA Competition Commission. And they are as effective as the Public Protector. I.o.w. a total waste of space and effort. Not even worth mentioning.

[RoosTa]

Yep. Totally true. I've been all over the place. South Africans just seem to accept this. I've no idea why.

We just don't whinge enough. Government should also address these overpricing issues.
And when we do whinge, we are called "spoilt white brats".

[VQuest]

We are being overcharged in many different avenues. The other day at Pick n Pay I purchased 2 small fresh peaches and was charged R4.90. I never thought I would ever see the day I would have to pay R2.45 for a peach.

The car industry is another guilty party.

But my pet hate (besides Telkom) is the high banking charges we are paying. It was only when I saw what overseas banks were charging did I realise how badly the banks are ripping us off. We already pay a very high interest rate on money we owe. We already get a very low interest rate on our savings, but on top of that you have to pay to deposit money, withdraw money, transfer money, etc, etc, etc, etc.

So if anyone wants to start some sort of banking movement, count me in!! It's really time for these corporate guys to realise that the time of stealing from us is over.

[doobiwan]

I must agree, my new gripe is banking charges (the old gripe is still Telkom ;) )

After my monthly run of debit orders I was shocked, For simple things like online inter account transfers, they're charging about R4+. That's for something the bank requires 0 input for!

Although I can see what's going to happen. I used to work for a large financial institute. All the banks are connect via diginet (typically 384-2Mb pipes) They'll just blame the high cost of business on telkom . . .

[noswal]

As mentioned before there is a similar group of concerned consumers - www.fedup.co.za

[BTTB]

Yep. Totally true. I've been all over the place. South Africans just seem to accept this. I've no idea why.

We just don't whinge enough. Government should also address these overpricing issues.
Government is one of the biggest culprits of fuelling inflation.
1. Rates and Taxes. 300% up since 2000.
2. Water + Sewerage. Between 200 and 1200% since 2000. Depending on area.
3. Electricity. 200% since 2000.
4. Petrol. Heavily overtaxed. 25% or more of the cost of petrol goes to taxation.
5. Licence Fees. At least 200% since about 2000.
Etc Etc Etc

Each Government Department is fighting for money and the public is the target.
*Above figures are rough.

The South African Government indirectly is the cause of stress amongst the average man on the street, who has to work harder and harder to make ends meet. The Rich are still getting richer and the poor are still getting poorer.

[Ghatto]

But why would someone like the motor industry even consider to lower prices if this is the trend?

Car shortage as sales surge (http://www.wheels24.co.za/Wheels24/News/0,,1369-1372_1764248,00.html)

This only shows that us South Africans is happy and comfortable with the situation.

[AJoe]

This kind of thing happens all over the world. Check UK vs. rest of europe amongst others!

[Tim182]

add mastercars 90% overpriced...

somehow a 2 years old car with 20000 km has the same price as a new one... PLEASE EXPLAIN THAT???

[Hunted]

I agree with everyone that we are paying too much for cars/houses/clothes/food etc.

I think one of the reasons we pay what we are paying is the high labour costs. I think SA has the one of the highest in the world. This being very true in the clothing industry. As everyone have seen lately with all the strikes that went on regarding increases. Most of that was increases much more then the inflation rate. Also imagine all the job losses that will take place if the prices have to come down, because I can't see the companies cut their profit margin that easy. I'm not in anyway coming up for the companies concerned, just stating what I think that will happening prices get dropped, which is not likely.

Regarding VQuest's comment, paying that much for Peaches is sort of understandable, because it's not “Stone Fruit's” season yet and that is most likely imported fruit. The same with grapes in the shop. We should be seeing the first South African "Stone fruit” from end of October mid November. Then prices will also be high, because of the demand. It's even better that time of year to sell it locally then selling it overseas.

Anyways I went off topic there, but something will have to be done with the prices in all segments, but it's the how that is the difficult one.

Cheers

[werner]

it seems quite simple to me.
You cant have high salaries, yet have cheap labour=cheaper products.
So, as long as the folks keep dancing in the streets and striking for increases (which they eventually get) then the cost of living goes up, as the cost of the empployees salary inevitably gets shuffled down to the consumer, who is an employee for someone else etc.

Rinse, repeat.

The more you get paid, correspondingly, your cost of living will go up.

(no, I am not taking into account corrupt managers, importation of goods etc)

If street sweepers demand a 20% increase, strike, and subsequently get a 20% increase, I dont feel it is a cause for celebration. Because your rates and taxes will reflect that increase, and some sorry-eyed minister will sit there and explain how it is because "of rising labour costs and blah blah <insert apartheid-regime-get-out-clause-here>"

When a company pays staff more, then their cost of doing business increases, and consumers pay more. Simple cycle.

[RoosTa]

What should actually happen is, top execs should have decreases while labourers, increases, but instead they push up the price of their products.

[VQuest]

Regarding VQuest's comment, paying that much for Peaches is sort of understandable, because it's not “Stone Fruit's” season yet and that is most likely imported fruit. The same with grapes in the shop. We should be seeing the first South African "Stone fruit” from end of October mid November. Then prices will also be high, because of the demand. It's even better that time of year to sell it locally then selling it overseas.


Yep, had already thought about that :) Out of season items are always more expensive. But my peach story was only an example. In general food prices are totally out of control. I really don't know how the average man on the street survives.

[daysleeper]

How can a municipal manager with a Std 4. earn R1,2 millions p/a?

Its happens! I bet I could find somebody to do that job for R300 000 p/a.

try me!

[VQuest]

What should actually happen is, top execs should have decreases while labourers, increases, but instead they push up the price of their products.

Yeah exactly. As things stand now, the rich get much richer and the poor get much poorer. I have no problem with people making money, but it should be against the law for people to be getting a salary like $izwe gets. I don't know how they can justify his salary - not to mention his bonuses. Other top execs are in the same boat. They don't care about the man who struggles to feed his family. It's very sad.

[werner]

would it not make more sense then to strike, the motivation being to "reduce the top execs exhorbitant salary" instead of to "increase my meagre salary"? as option 1 will lead to reduced prices for consumers? option 2 seems to increase the divide between rich and poor even more

[alacos]

It's really very simple.

All of these consumer woes arise out of the fact that the relevant suppliers are either monopolists or members of price-fixing cartels.

In other words, the cause in each case is the same: absence of genuine competition.

The reason why this situation is tolerated by most South Africans is that there has never really been a widely-accepted free-market ethic in SA. Commercial "competition" here consists very largely of competition for political influence with crucial interest groups -- including, most importantly, the government and the dominant political party (formerly NP, now ANC).

The entire mindset of much of the country is fundamentally skewed towards governmental interventionism in economic matters -- and the result is an economy dominated by successful "rent seekers" (of which Telkom is in fact a prime example).

And that is why any form of consumer activism in SA has, in the end, to be a political project (in a sense in which it would not necessarily be in other countries).

By "political project", I don't mean that it all boils down campaigning for or against this or that particular political party or organization. What I mean is that it is actually a matter of attempting to catalyse or accelerate a particular form of social/political evolution.

Winning the battle against Telkom would, of course, be nice -- and I actually believe that sooner or later we will in fact do that. But that's only really a part of something much bigger.

Michael Alachouzos

[pookfuzz]

Second hard cars should be cheap, very cheap. There are places in the world where they have almost no value and are willing to part with them for next to nothing.
http://www.news24.com/News24/Africa/Features/0,,2-11-37_1562060,00.html

If you want cry, go find out what car you could easily afford.
http://www.japanesevehicles.com

Sadly our government prohibits importing of second hand cars, apparently for your protection. Meanwhile in other African countries without laws to protect the motor industry the people are enjoying being able to own a vehicle at a fraction of the price of local second hand goods.

A simple thing like owning a car is something that most of us take for granted, living without one seems almost impossible, yet this is the reality that most of our country has to live with due to cars being completely beyond their finances. Our Gov needs to think hard about who they are really protecting with this legislation.

[alacos]

Sadly our government prohibits importing of second hand cars, apparently for your protection.
See my last posting above.

[pookfuzz]

See my last posting above.

Yup, I just did, and you highlighted the real problem area with greater clarity. So often we vent our anger at the companies yet often they are simply playing the game according to the prescribed rules.

We need to change the rules. This is somewhat depressing, fighting a company is easy compared to fighting a stupid government.

[alacos]

We need to change the rules. This is somewhat depressing, fighting a company is easy compared to fighting a stupid government.
It's not even just a matter of "fighting a stupid government", I'm afraid. It's bigger than that, because the problem about government here is actually merely one more manifestation of the same lack of free-market ethic.

What I mean by that is that we're all, in a sense, "consumers" of "government" (and of the political and economic "services" of government) -- and, for quite deep-seated cultural reasons, there's no genuine competition in that market either.

So it's really a matter of trying to push in the direction of a very fundamental sort of social change -- which is why, in my first posting, I used the word "evolution". There's only so much we can do, of course -- and the Telkom thing is at least something. In fact, it's something very important. But there's a bigger picture -- much bigger -- and I think it necessary for as many forumites as possible try to see it (even if there's not a great deal, at the moment, which we can do to change it).

In politics as in business, "Start small but think big" is not a bad motto.


Michael Alachouzos

[Gooku]

It's really very simple.

In other words, the cause in each case is the same: absence of genuine competition.

Michael Alachouzos

Totally agree ,GENUINE competition is the solution.

[BandwidthAddict]

I wish I could see how the situation could be changed to allow for real competition. The only entity that can fix this situation is the government by reducing the cost-of-entry into the market. The government will not do this as it is statist and prefers to work with a few companies that it can milk for tax, and kickback revenue.

I have met a few high-level managers and, in conversation, they let slip of a common practice for an entry in their general ledger to cover cost of business for bribes, kickbacks and inefficiency. I know of only one that refused to provide kickbacks, instead, they set up shop in India but that is an English company so was not tied to South Africa, they were looking to set up shop here. Basically, the reality today is that corruption is cost-of-business in South Africa.

Welcome to the Banana Republic of South Africa.

[Hunted]

Yep, had already thought about that :) Out of season items are always more expensive. But my peach story was only an example. In general food prices are totally out of control. I really don't know how the average man on the street survives.

he he he , Yeah understood what you meant :) Lives basic items are way too $

[wajordaan]

South African Rip-offs Ranking


1 Telecommunication 400% overpriced

2 Music CD & DVD 300% overpriced

3 Banks 300% overpriced ( eg. cash deposit fee 1% ,service fees,admin fees,transaction fees .....)

4 Motor car +- 60 % overpriced


This is based on my personal observation as an well travelled Businessman ,Any more Ideas ?

5. Multichoice or should that be Monochoice :)

[Debbie]

It's really very simple.

All of these consumer woes arise out of the fact that the relevant suppliers are either monopolists or members of price-fixing cartels.

In other words, the cause in each case is the same: absence of genuine competition.

The reason why this situation is tolerated by most South Africans is that there has never really been a widely-accepted free-market ethic in SA. Commercial "competition" here consists very largely of competition for political influence with crucial interest groups -- including, most importantly, the government and the dominant political party (formerly NP, now ANC).

The entire mindset of much of the country is fundamentally skewed towards governmental interventionism in economic matters -- and the result is an economy dominated by successful "rent seekers" (of which Telkom is in fact a prime example).

And that is why any form of consumer activism in SA has, in the end, to be a political project (in a sense in which it would not necessarily be in other countries).

By "political project", I don't mean that it all boils down campaigning for or against this or that particular political party or organization. What I mean is that it is actually a matter of attempting to catalyse or accelerate a particular form of social/political evolution.

Winning the battle against Telkom would, of course, be nice -- and I actually believe that sooner or later we will in fact do that. But that's only really a part of something much bigger.

Michael Alachouzos


Nice and eloquent alacos. Now try making your lawyer-talk more like this :D
Seriously though, I agree with you 100%.

[CyberMatix]

Somewhere in this equation must be the factor of productivity. One of the reasons China is growing out of all preportion to the rest of the world is productivity. I've been in Taiwan, and on a Friday afternoon 5 mins to 5 everybody is working like crazy. Then a hooter (horn) goes off. Everybody stands up, switches off and packs away, and leaves. 5 minutes after five the place is empty. That's productivity, combined with a work ethic. Try that here, they'll throw you in jail - there's probably a law against it.

The COL in SA have been lower in some instances w.r.t. other countries for many years for many reasons. But at present government is implementing a labour policy that promotes persons of inadequate skills and training to have employment in jobs that they aren't qualified for, and for this they are getting exorbitant salaries. And other people that have some of the skills that are required are either unemployed, underemployed, or buggers off to another country. So what happens? Productivity suffers. And what is the result. Higher inflation and COL increases. It's an economic fact, even Economics 101 teaches you this on the first day.

And this situation it will keep on until the situation finds a natural balance. And this natural balance is most probably high inflation and high COL. Unless the people that make the economic decisions get a clue, but how can they, they all got their business training in the Soviet Union.

[RoosTa]

Don't forgot software prices. These are thumbsucks but I'm sure they're not too far off:

Windows XP Proffessional - R1500
MS Office - R4000
Adobe Photoshop - R6000

I'm talking about the retail versions. Its so ridiculous. Probably 95% of Photoshops in use are pirated and its not suprising.

In the software market, there is not a huge difference in price in South Africa compared to the US. (we just earn less)

Well the Adobe Creative Suite Standard edition costs around $899 (from Adobe shop) = R5843.5
Adobe Photoshop Alone costs $149 (From adobe shop) = R968.50

So I'm assuming you're talking about the suite, which is not badly priced incomparison to what you pay overseas.

MS Office 2003 Basic is R1400
MS Office 2003 SBE is R2000
MS Office 2003 Pro is R2500
MS WinXP Home is R700
and MS WinXP Pro & x64 is R1200

These are the full packaged versions, then there are options to buy more licenses which are cheaper.

You just need to look around (not at the overpriced incredible connection)

http://shop.prophecy.co.za/index.php?option=com_phpshop&page=shop.browse&category_id=132
:)

But the real shocker: 3DSMax 7.5 $3,495.00 = R22,717.50

[mak2000]

Lets not forget our very competeitive Cellphone companies. I'm glad these guys are also under scrutiny now.

[Vlad]

a foreigner's input about what's f**** up in SA: (generally speaking, don't feel targeted)

1. people are obsessed with money
2. people have jobs they're incompetent for
3. people feel 'they deserve it' for no apparent reason
4. service sucks, and people accept it
5. people are complacent about being ripped off...

obviously there is no competitive pressure on companies in such a society...

they say ppl get the government they deserve, the same is probably true for companies.
For instance, i still have a bank account in Belgium, for which i pay nothing at all, not even for my credit card. So imagine, a bank that doesn't charge you!
Which is how it should be, b/c after all they make money with your money. Apparently in SA, banks derive proportionally more profit from bank charges than anywhere else in the world.
At the moment. i just transfer a lump sum once a month to my wife's account, who uses Go banking and then withdraws the money for me from PnP for free. That way i keep my banking costs down to R19 a month. Still to much, but no bank is going to get more out of me...

[pookfuzz]

Interesting you mention the Go Banking place. Since Go Banking is pretty much just Nedbank with a different name it makes you wonder why there is such a large disparity in service charges between the two.

[Vlad]

indeed, but we as consumers should at least try to exploit these differences

[Vlad]

and the audacity to charge for internet banking...
considering how mauch banks save by NOT haveing a bank teller having to deal with clients, banks should PAY us for using internet banking...

[Jedisword]

and the audacity to charge for internet banking...
considering how mauch banks save by NOT haveing a bank teller having to deal with clients, banks should PAY us for using internet banking...

The banks not only over charge for internet banking,they withhold our money for two days without good reason if you make transfer to another bank


My bank is my problem !