I dont know if this is true or not, but I have heard is Sodexo is not paying these stores on time and there has been delay in payment for more than 3 mths at times.
So issuing Sodexo card will not serve the purpose..
There are delays in making payment by these coupon providers. I had discussed with one of my known departmental stores rep. who is accepting the food coupons. They make payment after 4 months. These big ticket supermarkets are selling with less margin and they calculate the interest component of the delayed payment in addition to the commissions at source.
That's why some grocery stores are charging upto 4% extra for the sum you purchased thru food coupons.
It is the handiwork of syndicate. Their sales volume will dip if they continue to decline the acceptance of food coupons. There are plenty of retail outlets still accept food coupons. Employees are still benefitted even if they shell out addl. 4% towards the usage of food coupons.
Sodexo: Who exactly is Sodexo? Sodexo is a French multinational corporation Sodexo is one of the largest food services and facilities management companies in the world, with 380,000 employees, representing 130 nationalities, present on 34,000 sites in 80 countries. They are the biggest beneficiary in this transaction. Since this is almost like a parallel currency, they have to invest a lot of money upfront to get the govt. machinery working in passing certain laws. They make money in three ways:
a) They receive Rs.100/- worth of coupons, while give back only Rs. 95/- in cash, netting a straight 5% gain.
b) Sodexo coupons usually come with an expiry date (think of it as a currency with expiry date *shudder*). Once its expired, no retail store would accept it and it becomes null and void. However, Sodexo had already received the money from your Company when they issued the coupon (and hence a 100% profit!). There is a complex process through which you can get new coupons issued, but most people would not have the time or the patience to go through the process for getting the new coupons.
c) The biggest of them all. They get money at 0% interest. Have a look at the diagram once again. Day 1, they receive Rs. 100/-. Day 24-34, they give back Rs. 95/-. That is, they have had the money for a full 20-30 days without paying any interest. In fact, till the coupon is used, it is practically free money (and they can lend this money at interest, thereby making money).
So, if this was a win-win-win-win arrangement for all the folks involved, why did the retail store chains suddenly stop taking Sodexo coupons in lieu of items?
There is no clarity on what exactly happened, but here are the news items floating around -
a) They have increased the brokerage from 5% to 9%. That is, the retail chains used to get back Rs. 95/- of their money, but in the revised scenario, would get back Rs. 91/-. Already under pressure for margins, this was not acceptable by retail chains. Presumably, they formed a clique and stopped taking the coupons across the table.
b) The number of days in which cash conversion happens has gone up from 20 days to close to 60 days, thereby impacting the cash cycle of organizations
I agree to the point forked out by Sumit; leave the numbers aside to get validated by experts here.
@Pon1965; you should not compare credit cards with food coupons. Credit card offers lots of convenience and instant loans (if i may say so) to its customers. Sodexho / accor offer nothing to the customer and they simply survive on a tax exemption. Remove the exemption and then you see how many people would prefer food coupons.
Someone should stop these guys from selling parallel currency.
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