If You Want the Public to Help… Reward Them!

Panellists at a recent Consumer Goods Council of South Africa (CGCSA) webinar said that the country has reached a tipping point with the alarming growth of illicit trade, and the CGCSA is now calling on civil society to assist in mitigating this scourge by reporting instances of illicit activity.

According to the group, the South African Police Service (SAPS) cannot fully address the situation, and so civil society, including the general public, should assist by stepping up.

As far as illicit alcohol is concerned, Lucky Ntimane of National Liquor Traders said there were roughly 39,000 taverns across South Africa versus approximately 120,000 unlicensed shebeens.

‘These are people selling alcohol in competition with the legal taverns, the same products, albeit they want to push higher profit margins, and illicit and counterfeit alcohol provides a great opportunity for them to make that money because they are not bound by any laws or regulations; they are not even scared of the police,’ said Ntimane.

‘In fact, in many instances, these guys have police in their pockets.’

But while getting the public on board in the fight against illicit trade may seem like an ideal solution, the reality is that this will never happen in a country like South Africa, where unemployment levels are the third highest in the world, and where more than half the population lives below the poverty line.

In such a situation, one therefore wonders why anyone would want to crack down on establishments that could be seen as offering a lifeline in the form of cheaper products. Wouldn’t they be shooting themselves in the foot by helping to close these establishments down?

In fact, maybe the only real way to get the public on the side of law and order and prepared to help combat illicit trade is to reward them for doing so – ideally with money.

The South African government could do well to take a leaf out of Taiwan’s book in this regard. Taiwan uses a consumer reward programme to reduce illicit trade and thereby increase government revenue.

The scheme is actually a huge national lottery, where instead of buying a lottery ticket, the public can use everyday receipts obtained from buying groceries at a local store as tickets. Even a receipt for a tiny purchase, such as a bottle of water from a 7/11, can count as a lottery ticket as long as it is printed with a QR code and serial number, which act as the lottery number.

The Taiwanese government is very keen on this system because it has proven popular with consumers, who are motivated to only make purchases from law-abiding, tax-paying establishments that issue these coded receipts. So it’s a win-win situation. The government collects revenue from taxes, which are now getting paid, and the consumer is able to participate in the lottery via the receipts, without having to buy a ticket.

So, why not something along the same lines for South Africa?