Spaza shops: Can my spaza give credit (and other questions)?

Spaza shops: Can my spaza give credit (and other questions)?Most neighborhoods have spaza shops selling snacks, airtime, or cigarettes. Are spaza shops allowed to give credit and sell alcohol?

by Alex Coyne

14-08-2023 15:59

in Business

Spaza shops

Image by Pexels

Research shows more than 150, 000 informal shops in South Africa. Informal traders are a big part of South Africa's economy, and most neighborhoods have several spaza shops selling basics like snacks, airtime, or cigarettes.

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Are spaza shops allowed to give credit and sell alcohol?

Here are important questions about SA's informal shops answered.

What is a spaza shop? Spaza shops are small businesses usually run from home.

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A suggested local bylaw suggests that shops must use at least 60% of the property for residential use, and be no larger than 20m .

How can someone open a spaza shop? Guidelines from SARS recommend that store owners, even smaller shops, register their business for tax purposes.

Government financial help is available to spazas who are registered with the South African Revenue Service (SARS), the Companies and Intellectual Property Commission (CIPC), and who have a valid trading license.

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Registration with the CIPC protects names and trademarks (e.g. Joe's Trader ).

ALSO READ: More than 6000 spaza shops assisted with R58 million

Spaza stores can receive governmental support through the Department of Small Business Development (DSBD).

Can a spaza give cash loans? No, according to the National Credit Act only registered financial institutions, like short-term lenders or banks are allowed to provide cash loans.

ALSO READ: Loan shark in court for contravention of the National Credit Act

Can a spaza sell alcohol? Yes, but only under certain conditions.

Shops wanting to sell alcohol must apply for a legal liquor license.

ALSO READ: Tavern tragedy: why South Africa needs to tackle underage drinking

Can stores sell cooked food? Yes, but also only permitted some criteria are met.

A business selling cooked food will need the correct certificates for food preparation, often with a trading license.

ALSO READ: Government blasts fake news photo of Spaza shop expired food victim

What if I'm not happy with a shop's product? The Consumer Protection Act covers goods and services sold in South Africa.

However, most shops buy their goods from other retailers, and re-sell these products.

What happens if you aren't happy with a product bought from a smaller or informal shop?

Shops can be asked to refund or exchange products in the case of unhappy customers. However product complaints can also be sent to the product maker, listing the batch number and complaint.

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