If you're a member of a club linked to your Edgars account or to any other retailer that gives you credit, you may be confused as to whether the charging of a club fee is legal or not.

For the past several years, the National Credit Regulator (NCR) has been involved in legal battles with Edcon and Lewis over the levying of a club fee to consumers of credit.

The regulator's fight against the two retailers has now gone all the way to the Supreme Court of Appeal after judgments by other courts that club fees are permissible.

Retailers, which rake in millions in revenue from club fees, have successfully argued that the club fee does not form part of the "cost of credit", which is strictly regulated by the National Credit Act (NCA).

Edgars has contended that club membership is a stand-alone product, is optional and can be cancelled at any time.

A spokesperson for Edcon told Money this week that club income for the 2018 financial year was R453m.

But the regulator is of the view that it is not legal.

In a judgment in favour of the NCR and against Edcon, the National Consumer Tribunal said the question was broader than whether or not a club fee constitutes a cost of credit.

"The question is rather whether the NCA allows a credit agreement to contain any fee or charge other than that permitted by the NCA."

The tribunal judgment says the NCA is clear and goes to great lengths to describe the fees and charges which are permitted to form part of a credit agreement.

"The intention of the legislature is clearly to ensure that consumers are not misled in any way and know exactly the fees, charges and costs associated with the credit agreement. These are described in section 101 of the NCA. There is no section of the NCA which provides for a club fee or anything similar. Any fee appearing on the credit agreement which is not a fee or charge described in the NCA would therefore not be permitted," the judgment says.

The regulator succeeded in obtaining an order from the tribunal directing Edcon to refund all consumers who were, from 2007 to date, charged club fees, as well as an interdict restraining Edcon from charging consumers club fees in future and an administrative fine in the amount of 10% of Edcon's annual turnover.

However, this ruling was overruled in August when the North Gauteng High Court in Pretoria found the tribunal had erred in finding that Edcon was not allowed to charge a club fee and that in charging this fee it had engaged in conduct prohibited by the NCA.

Nthupang Magolego, a senior legal adviser at the NCR, says the regulator has applied to the Supreme Court of Appeal to overturn the Pretoria high court's decision on Edgars. In the Lewis case, she says, the Supreme Court of Appeal has already granted the regulator leave to appeal the high court decision in favour of Lewis that its club fees are lawful.