Unredeemed Bonga points are accounted for as liabilities in their accounts so as per now, the company owes its subscribers up to Ksh 3 billion shillings. In a bid to reduce this liability, Safaricom has been encouraging subscribers to redeem their points to get smartphones and other electronic gadgets at a cheaper price.
“We encourage use of the points so that the programme can achieve its objective and also clear our books of accrued liability,” Safaricom said in a statement to Business Daily.
The accrued liabilities from Bonga points eat into Safaricom’s revenue given that accounting guidelines require the telco to only recognise the loyalty points as sales once customers redeem the credits. This means Safaricom’s total sales for the year to March 2013 would have been 127.4 billion without the deferral of revenue.
The number has grown from 1.4 billion in 2009 to 3.2 billion in the past financial year.