Warning: Don’t fall for the “honeymoon strategy” when choosing electricity offers

Many power companies use this trick to win you over and then make money out of you in years two, three and four.

Australia has some of the world’s highest electricity prices, so it’s vital to ensure you’re not paying top dollar by global standards!

The best way to do that is to get onto a good market offer with low rates or a big discount or a combination of both.

But it’s not enough to just do that once and then forget about it. You need to switch or negotiate with your retailer every year or two.

Why? Because many power companies use what’s sometimes called ‘The Honeymoon Strategy’.

It’s one of the oldest tricks in the book and it goes like this:

  • Entice you to switch with a very good 1-year offer, then
  • Move you onto an inferior offer with a lower discount and/or higher rates, and
  • Hope you either don’t notice or couldn’t be bothered moving or negotiating with them.

This trick works because many of us are busy or confused by the electricity market and the law says that in most states, all retailers need to do is tell you on your next bill that your special discount has expired.

BUT if you can get a 2-year deal at least and you’re prepared to shop around every couple of years, you can win and win again from this business model, taking honeymoon after honeymoon.

The time a discount lasts is known as the “minimum benefit period” or “contract term” in the fine print of your energy plan. Be sure to check it.

If your discount only lasts a year, you’ll have to shop around every year.

You can read the 9Saver Electricity Savings Guide at this link

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.

Most read