PracticeAccounting FirmsThis week’s blogs: the price of loyalty

This week's blogs: the price of loyalty

Our bloggers discuss the abuse of the loyalty card system and contradictions in the standards debate

I’ve finally paid off a really weird overdraft… This could be the ultimate
‘green shoots’ story. As we all try to get out of debt, I can now tell you I
have, after six months, finally repaid my Nectar loyalty points overdraft.

Here’s what happened.

Last Christmas, Mrs Shareholdervalues was doing the festive food shopping at
Sainsbury’s. I arrived a bit later and started getting the festive booze. Mrs
Shareholdervalues was paying at one till, while the master of the house was
going through another with all the drink.

Both of us had big bills and unbeknownst to each other, whipped out our
Nectar cards (which run off the same account) and asked for the full balance –
some 5,500 points, worth £55 – to be taken off our bills.

The computer couldn’t handle two near-simultaneous transactions and allowed
them both to go through! Not until we got home did we realise that we’d struck a
bargain.

Fortunately, the next time we went to Sainsbury’s, we weren’t arrested.
Instead, our till receipt showed minus 5,500 points. So, for the last six
months, every point we’ve earned has gone straight into repaying what was, in
effect, a £55, interest-free, unauthorised overdraft.

Colleagues suggested this had the makings of a modern-day Great Train
Robbery, if you upscaled it. Not so sure. Do you know how much money you have to
spend at Sainsbury’ s to earn 5,500 points?

There must be cheaper ways to commit a crime.

Andy Sawers, editor, Financial Director,
shareholdervalues.financialdirector.co.uk

I had dinner as a guest of the CCAB, Belgian branch, and had to ‘sing for my
supper’ with a talk on the Politicisation of the Accounting Standard-Setting
Process.

I used the opportunity to comment on a number of apparent contradictions in
the current situation, including:

  • The fact that political pressure on FASB to amend standards seems to have
    been overlooked, while any suggestion that the EU might want to influence the
    IASB is seen as overt political pressure.
  • The large sums of money apparently being spent on lobbying in the USA,
    compared to the almost nonexistent activity in the EU.
  • The attention we are giving critics of mark-to-market, while ignoring the
    strong support for it from the CEO of perhaps the most successful bank in the
    current crisis, Lloyd Blankfein of Goldman Sachs.
  • A concern that regulation of the audit profession has made it harder for
    auditors to assume a wider role in drawing attention to the level of risk
    inherent in a client’ s business model.
  • was pleasantly surprised at the support I received – as well as the strong
    support for more people in the profession to speak up and more publicly
    participate in these discussions.

Jeremy Newman, CEO, BDO International,
blog.e-bdo.com

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