Payment cards at malls

The logic behind why some malls have their own cards for payment.

February 9, 2006

The other day me and my friend went to watch the movie ‘Rang De Basanti’ at the Inox theatre at The Forum, Calcutta.The evening show was at 5:25pm and we reached the place 20 mins in advance.Both of us were very hungry so we went to the food court which was on the topmost floor.The food court had all kinds of stuff from Puchkas to Pizzas in stalls of different sizes.We went to the puchka stall to have some puchkas. The guy manning the stall told us that we needed to get a ‘Burp!’ card to buy stuff and that cash was not accepted at the stalls. Me and my friend wondered why the payment procedure had to be so needlessly complicated.

The MBAs ;) that we were we decided to investigate the logic behind the ‘Burp Card’.The Burp card is a swipe card akin to your credit card. Only that the limit is determined by the amount you pay at the counter.You also need to pay Rs.25(caution deposit for the card I guess) extra for the card which is refunded if you return the card. You have use the card at the food stalls to buy stuff and based on your purchases the amount gets deducted from the card. All this is fine but we still couldn’t figure out what purpose the card solved.

When we went back to the puchka guy, we asked him what the advantages of the Burp card system were.The guy told us that the Burp card system helps ‘The Forum’ management keep track of the sales generated at each store.The stall owners don’t pay a fixed rent for the stall space, instead they pay ‘The Forum’ a percentage(which is outcome of the negotiations between the stall owner and ‘The Forum’ management) of the stall’s sales.

The advantages of this system are obvious. In case the sales are high ‘The Forum’ guys gets to benefit and in case of lower sales the stall owner doesn’t get affected very badly like he does in case of a high fixed rent.’The Forum’ management determines the ranges of the prices of the food items which are sold and it can also get rid of the stalls which have not been performing well as it has the sales information.

Interesting stuff I thought(revenue sharing, a concept I studied in supply chain management)… We were not disappointed with the movie either..excellent visuals and very nice songs. All in all it was good fun.

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