Is there a limit to amount of times switch supplier in one year?

stphnstevey

I have received substantial cashback from switching energy suppliers from Quidco - last one £60 for BG.

I was just wondering, is there anything to stop you continually switching, waiting for the cashback to be paid and then switching again?

With a 2-3 month average pay time, you could get around £70 a quarter or £280 a year. For me, thats a good chunk off our bill!

I realise some suppliers have higher rates than others, but with this amount of cashback and such a shor period with them, the prices are not so important. (I used to spend hours comparing prices, but whay bother, just go with the highest cashback!)

Cardew

Whilst not being critical of you personally for taking advantage of a crazy system, your suggestion shows why these parasitic organisations like Quidco and comparison networks simply increase the price of gas and electricity to all of us; the sooner companies stop paying commission to them the better.

Not only do we, the customers, pay in increased prices for this commission, but the huge numbers of extra staff in the Utility companies employed to handle the accounts of 'serial switchers' is also paid for by the customer.

1carminestocky

Not really an answer to the question, though. I have moved 4 times in a year (I used topcashback and Quidco so as not to make it look 'suspect') and there have been no questions asked whatsoever. As a long-time lurker I respect Cardew's knowledge of the utility market but would suggest he's maybe making too much of the alleged correlation between the various energy company's costs of admin and the prices they charge. The 2 don't tend to correlate much when there's a decrease in the wholesale price, lol.

Cardew

1carminestocky wrote: »

Not really an answer to the question, though. I have moved 4 times in a year (I used topcashback and Quidco so as not to make it look 'suspect') and there have been no questions asked whatsoever. As a long-time lurker I respect Cardew's knowledge of the utility market but would suggest he's maybe making too much of the alleged correlation between the various energy company's costs of admin and the prices they charge. The 2 don't tend to correlate much when there's a decrease in the wholesale price, lol.

Fair point!

I don't know how much effect the commission and extra staff have on the prices we pay, I suspect not a great deal. However I am not aware I have 'made too much' of this aspect or tried to quantify the effect on charges.

Evidence given to the recent Parlimentary committee on gas and electricity prices quoted a staggeringly high percentage(20%??) of those who switched companies, moved to a tariff that was higher than their existing tariff. No doubt many of them 'seduced' by the thought of a 'free' bottle of bubbly or cashback/Nectar points etc.

It doesn't alter the principle, that these organisations are parasitic and we pay for their profits in higher gas and electricity prices..

USwitch, who are just one of many operating in this Market, was sold for £210 million in 2006 to a US company and since then has grown tremendously.
Admittedly they cover other commodities, but this is a huge industry.

Plushchris

That 20% you speak of Cardew, does that include the vast amounts of people that were mis-sold to by door-knockers/salesmen in supermarkets etc?

I would think that most of that 20% were, any others were people who switched without knowing what they were doing (entering Kwh usage instead of spend etc)

Also, there a great amount of people that switch that DONT get cashback/wine etc, anyone just phoning the comparison sites off their own back and not using the links on here will not get cashback. Also there are many many people that still dont have the internet and rely on ads on TV/Newspapers to find out about comparison services, if you call from an ad in the paper you wont get cashback.

I still fail to see how we pay for their profits with higher gas and electric prices though, that just doesnt make any sense to me. The energy providers will pay for this comission out of their advertising budget, if they didnt deal with comparison sites etc I bet you would be on here moaning about the extra adverts they put on TV etc.

The fact is, if the energy suppliers didnt give the cash to comparison sites they would spend it in other ways NOT provide us with cheaper gas and electricity.

Ebico do not deal with any of the switching sites as far as I'm aware, does that mean they are a lot cheaper because they dont pay them commission? No, it doesnt.

1carminestocky

Speaking as a total non-expert here, my theory on maximising these cashback deals (let's face it, whilst they are available it would be folly not to take advantage!) with regard to the energy companies is to try and move 5 times per year - go for price plans WITH a standing charge in the Autumn/Winter months and one WITHOUT a standing charge during Spring/Summer. Any views?

PS I'm siding more with Plushchris in this discussion. The cashback 'sweetener' forms part of the energy company's advertising budget, this would be spent whether cashback sites existed or not IMO. I'm no accountant but can't advertising spend be offset against tax?

stphnstevey

I am surprised someone would call cashback sites "parasites" on this forum where Martin actively endorses most cashback sites? Especially by a long term member...

These companies need to advertise to attract new business and retain existing business - full stop. Whether this be by TV, radio, leaflets, door to door, supermarket stands, cashback sites etc etc etc.

Would you rather see their money (or effectively our money as we pay for their services) goto a large advertising company executives bonus or back to the customer?

Cashback sites are NOT an ADDITIONAL expense they need to claw back in price hikes. £60 per contract might seem alot and I can see why that might make you think that way, but these companies spend millions of pounds each year to do exactly that, get new contracts.

Of that millions of pounds, only a small part of their advertsing lead to customers signing up for contracts. (Think about it - how many energy supplier adverts have you seen on tv over just one night? How many contracts have you signed upto that one night? How much has that cost them for that one nights advertising (£60 or so quite possibly)?)

So £60 is nothing really to them and nothing compared to what they might have had to spend to stand out from their competitors and make you take notice, enough to go to their website and sign up.

Also, they don't pay unless it's confirmed you take a contract. Their not paying for something in 'hope' that you might be attracted. 100% of their payments lead 100% of sales.

So rather than being 'parasitic', cashback sites are leading to 'targeted' marketing and reducing the wasteful advertising spend. Therefore reducing advertsing budget's and 'possibly' then leading to reducing prices (although I doubt this last point and more likely leading to increased profits!)

stphnstevey

1carminestocky wrote: »

go for price plans WITH a standing charge in the Autumn/Winter months and one WITHOUT a standing charge during Spring/Summer. Any views?

My brain has gone on a go slow after my last post - need some chocolate

Why the change with the standing charges?

Cardew

stphnstevey wrote: »

I am surprised someone would call cashback sites "parasites" on this forum where Martin actively endorses most cashback sites? Especially by a long term member...

These companies need to advertise to attract new business and retain existing business - full stop. Whether this be by TV, radio, leaflets, door to door, supermarket stands, cashback sites etc etc etc.

Would you rather see their money (or effectively our money as we pay for their services) goto a large advertising company executives bonus or back to the customer?

A valid argument, looked at from the Utility companies point of view! Likewise(and understandably) Martin has to make this site pay and he makes no secret that the comparison networks are a source of revenue.

However one can argue that any form of advertising is parasitic in the strict sense of the word. i.e. it might help the merchant but it is the consumer that pays in the end.

In any case the majority of the commission goes to USwitch and not the consumer.

A non-profit making company like Ebico does not advertise or pay commission.

The merry go round of serial switchers, thus entailing additional staff to handle the accounts, issue has not been addressed???

On reflection I really do believe the term parasitic is justified! However if you prefer unnecessary;)

1carminestocky

stphnstevey wrote: »

My brain has gone on a go slow after my last post - need some chocolate

Why the change with the standing charges?

My thinking here is that a standing charge usually means a much lower unit used cost, so in the high-consumption Autum/Winter months it would be better value to do this. In the low-consumption Spring/Summer months it would be best to pay only for what you use? This could be all a load of codswallop, though...

Cardew

1carminestocky wrote: »

My thinking here is that a standing charge usually means a much lower unit used cost, so in the high-consumption Autum/Winter months it would be better value to do this. In the low-consumption Spring/Summer months it would be best to pay only for what you use? This could be all a load of codswallop, though...

This is exactly what it means I believe.

The two tier pricing is simply another way of collecting the 'standing charge'.

In the past most firms charged extra for the first 4,572kWh of gas and 900kWh of electricity per year. This was spread evenly each quarter(1143/225kWh).

If you used all these units then it was the same cost as the daily charge.

However some people did not use all their 1143/225kWh in the summer quarters so effectively paid a lower standing charge.

It has to be said that the companies have got wise to this and so some have a higher rate, for less units, each quarter. Also to combat this NPower introduced their infamous sculpting(don't ask!)