easyjet onboard vouchers

Chomeur

When you check in online for easyjet they offer you the chance to buy a £10 voucher to spend onboard for £8. How can that make financial sense for them?

Well I found out to my detriment the other day. I had a voucher, and made £10.50 of purchases onboard. The stewardess says "That's just 50 pence then please" and hands me the terminal end on so that I can't see the amount. It's awkward because I'm in a window seat and she has to lean over the adjacent passengers. So I just pass her my card and pay without seeing the terminal. She takes my boarding pass and crosses out the details of the voucher to show it has been used. There is no question but that I am using it. Back home I check my credit card and I have been charged £10.50. Moral of the story, ALWAYS insist on seeing the amount on the terminal.

Mr.Generous

I'd guess you were unlucky, I doubt they have a corporate instruction to rip people off. But here's why it works. The £10 worth of food or drink you purchase on board actually costs about £3 - so selling for £8 is profitable. It's called a mark up, or a margin. That's how retail businesses work. They probably know that anyone buying a voucher will on average spend a lot more onboard than those who don't. A bit like saying why do Tesco do clubcard prices and sell things cheaper.

Hoenir

Chomeur said:

Moral of the story, ALWAYS insist on seeing the amount on the terminal.

Always do. Mistakes do happen. With amounts miskeyed. 

DullGreyGuy

There will also be the vouchers that people buy and then dont use which become almost pure profit 

saajan_12

Chomeur said:

When you check in online for easyjet they offer you the chance to buy a £10 voucher to spend onboard for £8. How can that make financial sense for them?

Its effectively like a 20% discount code - 
- If they were making more than 20% then they are still profiting from the items
- It encourages people to buy something / more things as it feels like a deal. 

However its actually better because the payment happens upfront so you're locked in
- If you don't find anything you like, you'll still buy something since you've already paid
- If you lose it or forget, you've already paid with no recourse. 

soolin

I've used a number of the vouchers, so far never had an issue with them not being applied to the total.

DullGreyGuy

saajan_12 said:

However its actually better because the payment happens upfront so you're locked in
- If you don't find anything you like, you'll still buy something since you've already paid
- If you lose it or forget, you've already paid with no recourse. 

Its a bit of an accounting headache because because whilst the cash is in the bank you have to hold a liability on your balance sheet which offsets the cash as you're likely to be giving away some product in the future otherwise. 

Its why they have expiry dates otherwise it forever grows as more vouchers are bought and lost or you have to argue with your auditors on an appropriate rate of writing it down and that £5 voucher from 1998 is never going to be claimed.

Chomeur

I think the voucher is only valid on the flight you are checking in for when you buy it. So they may make some profit from vouchers that are never used. Anyway, easyjet have apologised, and reimbursed the money to my credit card.