Why Big Bazaar's Rs 12,000 for Rs 10,000 deal might just work for you

Flip through the newspapers, or flick the TV channels and it is impossible for you to miss a Big Bazaar advertisement for their current offering, “Big Bazaar Profit Club Card.”

[caption id=“attachment_770771” align=“alignleft” width=“380”] You have to buy the profit club membership card for a lump sum amount of Rs 10,000 and in return you can shop for Rs 12, 000.[/caption]

According to the advertisement you have to buy the profit club membership card for a lump sum amount of Rs 10,000 and in return you can shop for Rs 12, 000. If you are someone who is wondering, if this is a good deal, or just another marketing gimmick, read on to know more.

How it works: To be a member you will have to pay a one-time registration fee of Rs 100, which includes all taxes, and also do the necessary paper work. As mentioned above, you will first have to pay Rs 10,000 as lump sum and you will get a membership card with Rs 12,000 loaded on it. You can shop for Rs 1,000 per month for 12 months. So, it is like getting Rs 12,000 for Rs 10,000.

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What the numbers say: Rs 12, 000 for Rs 10,000 sounds like a really good deal. But do the numbers really add up? Let’s not forget that you are paying Rs 100 as one time registration fee, so your total cost is Rs 10,100.

Lets see what the numbers tell.

Let us assume that you gave a loan of Rs 10,100, with an EMI of Rs 1,000 per month for twelve month, which is a total of Rs 12,000. This means you earned a return of 38.787 percent.

Likewise, when you take this Big Bazaar deal, you actually get a rate of interest of 38.787 percent, which is actually good returns.

See the calculation table below:

[caption id=“attachment_770747” align=“alignleft” width=“600”] Chart by Bindisha Sarang.Firstpost[/caption]

Things to keep in mind: Of course, like every other deal, you must go through the Terms and Conditions (T&C) to know about the finer details. You can use this card to shop at stores of Big Bazaar, Food Bazaar, FBB - Fashion@Big Bazaar and Food Right. However, you won’t be able to use the card to buy certain category of items. For instance, the card purchases are not to be applicable on purchase from Navaras, Star and Sitara Salon and certain other categories. Moreover, if you lose your membership card, you will able to get a new card, but you will have to pay a membership fee. Also the company will not be responsible for refund if you are unable to use the amount, due to reasons beyond the company’s control. For instance, strikes and like.

As per the terms and conditions posted on their website, “On withdrawal/termination from the program within 12 months of the enrollment date, refund will be processed only after proper member verification. Refund amount will be, amount deposited by member, less the amount utilised by the member and excluding the bonus amount of Rs 2,000 which customer shall be entitled only on completion of program validity.”

And finally the retailer has the right to change these terms and conditions without giving you prior notice.

Firstpost Take: If you consider only the returns, this seems like a good scheme, especially for those who shop at Big Bazaar regularly, and understand the terms and conditions well. If the market rumours are to be believed, the retailer is aggressively looking for funds, hence they have come out with such a scheme.