The High Court has declined to suspend a judgment quashing the imposition of expiry dates on Safaricom’s Bonga Points loyalty programme, pending an appeal the telecoms operator has filed.
The mobile services provider had sought the suspension of the judgement delivered last November, which quashed a notice by Safaricom that had introduced an expiry date on its Bonga Points scheme.
Justice Chacha Mwita, who quashed the notice on November 22, 2024, rejected the application saying it would not be in the public interest to grant a stay whose effect is to allow what was unconstitutional, to continue, pending the hearing of an appeal.
“In the circumstances, it would be inappropriate and possibly contrary to article 2(4) of the Constitution for this court, as the trial court, to grant a stay of its decision declaring the 1st respondent’s (Safaricom) notice constitutionally infirm,” said the judge.
The telco launched the loyalty programme in October 2017, offering both prepaid and postpaid subscribers one point for every Sh10 spent on its network.
In the notice, Safaricom had announced that from January 2023, all Bonga points older than three years would expire and be unavailable for redemption. But the court ruled that such a move was a violation of consumer economic rights, thus unconstitutional and void.
The court also held that Bonga points once earned, become customers’ property, thus Safaricom ceases to have control over them.
The telco argued that it had an arguable appeal and unless the decision was suspended, the notice would remain ineffective to its detriment since the bonga points held by subscribers would have been used and it would be impossible to recover them.
Safaricom said its customers will utilise and deplete Bonga points older than three years and should the appeal succeed, the decision would not be enforced and the effect would be irreversible.
On the other hand, Safaricom said customers would easily get back their Bonga points, in case the appeal does not succeed.
Nakuru-based surgeon and activist Dr Magare Gikenyi challenged the decision, arguing that it was unfair for the telco to force its subscribers to redeem their loyalty points or lose them.
He argued that the effect of introducing an expiry date was a violation of consumers’ economic rights and therefore unconstitutional. Safaricom reversed the decision after the 2022 Bonga points notice led to customer backlash.
High Court judge Chacha Mwita agreed and ruled: “An order of prohibition is issued prohibiting the 1st respondent (Safaricom) from giving effect to the public notice issued on October 28, 2022, purporting to introduce expiry dates of Bonga points of more than three years.”
The loyalty points are recognised as a liability or deferred income in Safaricom’s books and are only booked as revenue when redeemed by customers either for airtime, SMS, merchandise, or shopping.
During the Covid-19 period, Safaricom leveraged the loyalty programme to drive charity causes, including encouraging customers to donate points to the needy under an initiative dubbed Bonga for Good, which saw subscribers donate Sh330 million in the three months to June 2020.
