Kroger bans Visa cards

[Walt34]

Not quite.

Besides the merchant the other group that pays our rewards are those who pay the high interest rates CCs charge. Cashback rates from 1-6% are peanuts compared to CC rates on the unpaid blance.

Ah yes, there is that. I forget sometimes that not everyone pays off their cc's every month.

 

[beppie58]

From what I can tell the profit margins in the grocery industry are so slim 2-4% swipe fees can be the difference between a profit and a loss. Personally I think they should just offer a 1.5% discount for paying cash.
I rarely use debit/credit cards now I am almost entirely cash. Some merchants like some auction houses I use charge the entire swipe fees to the purchase price.
And I have very strong feelings about self checkout or scan and go. To put it in a nutshell I enjoy hearing a hello from a real person and I also am not going to work for my grocer for free. I shop a human that is paid will swipe my groceries, done I will even be happy to pay an extra fee for the service.

 

[thepalmersinking]

Does anybody think it’s odd that you can Venmo or Zelle money from one person to another for free. Yet giving money to a business costs them money. If Kroger wins, this fight has the ability to alter the payments landscape 20 years from now. Half of Visa’s transactions are debit anyway. Venmo or Zelle will put the whammy on them. Just a matter of time.

 

[athena53]

From what I can tell the profit margins in the grocery industry are so slim 2-4% swipe fees can be the difference between a profit and a loss. Personally I think they should just offer a 1.5% discount for paying cash.

My guess is that grocery store prices already have a load for swipe fees built in, and the slim margins they quote are AFTER the swipe fees. I agree with you. though- a discount for cash might tempt me.

Two thoughts, though: first, cash is a pain for stores. You have to collect it periodically from the cash registers. You have to count it, bundle it, and store it safely till you can get it to the bank. Many of these tasks require two people to decrease the risk of embezzlement. There's also an extra cost of insurance against loss of cash via embezzlement or other crime.

Second- some of us really like our credit card perks. If you redeem miles or points for some of the really high-ticket items , they can be worth a lot more than cash back or a discount for paying cash. My next planned reward is a Business-Class flight to Europe- even using the Unrestricted award level it works out to 4 cents per airline mile, and I get one mile for every dollar spent on most purchases. more for restaurants and flights on the airline.

Update on why I couldn't charge my new plantation shutters on my MasterCard: I got them through Costco. I'd completely forgotten until I tried to use it at a Costco gas pump that they don't take MC.

 

[Sue J]

Interesting that a large company would be moving in the direction of not taking VISA.

Locally, one of our favorite grocery chains (Marcs) just started taking VISA and MasterCard. They had always been cash, check or Discover as their only acceptable forms of payment. They made a big deal out of announcing the change to accepting VISA, MasterCard and mobile pay options.

And Aldi recently started accepting credit cards, too.

 

[MichaelB]

This announcement by Kroger reminds me of an airline raising a price on one flight route. It's a signal to other airlines. When they follow the lead, the price is suddenly higher everywhere, but there's no increase in competition. If they choose to keep their current price, the price increase quietly goes away.

This might be a signal to other grocers or large retailers, an invitation to follow suit. If no other follows their lead, little harm to Kroger, as it's only some stores in one region and they can reverse this policy. If enough retailers follow suit, it could give them some badly needed bargaining power with the CC co's.

 

[Chuckanut]

Ah yes, there is that. I forget sometimes that not everyone pays off their cc's every month.

No doubt that to we LBYM folks the thought of not paying off the CC balance every month is such a strange concept that it never crosses our minds. As difficult as many of us here may find it to believe, there are people who keep a running balance that they never quite pay off.

 

[ychuck46]

I don't believe Kroger wants to ban any particular credit card or company. They are merely in a battle over what they consider to be fair merchant charges by the CC companies; the CC companies in turn are trying to maximize their profits. Something will have to give but I would bet in the end that Kroger, the largest grocery store chain in the country, will continue to accept all major CCs.

 

[samclem]

This might be a signal to other grocers or large retailers, an invitation to follow suit. If no other follows their lead, little harm to Kroger, as it's only some stores in one region and they can reverse this policy. If enough retailers follow suit, it could give them some badly needed bargaining power with the CC co's.

Agreed.

If they drop Visa I will shop elsewhere.

If I lived where Kroger was no longer accepting Visa, I would make it a point to shop there and use a different card. As a consumer, it benefits me when service providers compete. While there may be several charge card companies, if stores feel they >must< accept both Visa and MasterCard, then those card companies have tremendous pricing power, and that's not good for me, ultimately.

I want every card company exec to believe consumers are fickle, that they are in a competitive business, and that swipe fees and other charges are important factors in that competition.

 

[gerntz]

Interesting that a large company would be moving in the direction of not taking VISA.

Costco moved the opposite way: to VISA only & away from AmEx or anything else. So Kroger wouldn't be alone.

 

[audreyh1]

Just to be clear - this was only for the ~30 stores of the Foods Co supermarket chain, a subsidiary of Kroger in CA.

 

[LOL!]

Our Krogers still take Visa and no word on not taking Visa.

Got a Kroger credit card offer in the mail today. Looks worthwhile because of all the money they would fling at you.

 

[audreyh1]

Our Krogers still take Visa and no word on not taking Visa.

Got a Kroger credit card offer in the mail today. Looks worthwhile because of all the money they would fling at you.

It's not the Kroger stores. Just the Food Co stores. But because Food Co is owned by Kroger, the headlines run that it's Kroger!

 

[ownyourfuture]

As of this year, my dentist only accepts cash or checks.

 

[ownyourfuture]

And I have very strong feelings about self checkout or scan and go. To put it in a nutshell I enjoy hearing a hello from a real person and I also am not going to work for my grocer for free

I feel the same way, but it's starting to look like you/we may have no choice in the future. There's about 12 items that I use on a consistent basis that are considerably cheaper at Walmart grocery. 2 years ago, I'd estimate the ratio between self-service & full service checkouts was about 15-85, now I estimate it to be 80-20.

I haven't read the entire thread, so others may have mentioned this, but I believe part of this (including Kroger's decision) could be related to hikes in the minimum wage.

 

[athena53]

As of this year, my dentist only accepts cash or checks.

I really like my dentist and my oral surgeon but I would find that annoying. Do they offer a financing plan for major work? Most do have some "partnership" with a healthcare financing company and my guess is that they get a few bucks for referrals.

For cleanings, repairs, X-rays, etc. I pay by check to save them the percentage- but if it's a root canal or a crown I want my 2% back from Fidelity.

 

[ownyourfuture]

I really like my dentist and my oral surgeon but I would find that annoying. Do they offer a financing plan for major work? Most do have some "partnership" with a healthcare financing company and my guess is that they get a few bucks for referrals.

For cleanings, repairs, X-rays, etc. I pay by check to save them the percentage- but if it's a root canal or a crown I want my 2% back from Fidelity.

I feel the same about my dentist, so I put up with it. It seems kind of unprofessional to me though. Just like you, if I ever need a root canal or crown, I would also want the 2.00% from my Fidelity Visa rewards card.

 

[davebarnes]

As of this year, my dentist only accepts cash or checks.

No problem with that as long as he can receive money via Venmo.
I am not writing a paper check.
I have not used any cash this calendar year.

 

[RobbieB]

I would not bag my Dentist that I've been going to for 30 years to get 2% cash back.

I'd rather have I guy I trusted than 2%.

 

[Just_Steve]

As of this year, my dentist only accepts cash or checks.

Does he give you special discount for actual greenbacks?

 

[teejayevans]

As of this year, my dentist only accepts cash or checks.

For those that pay using HSA funds, that would be hassle as they use credit cards to pay.

 

[athena53]

I would not bag my Dentist that I've been going to for 30 years to get 2% cash back.

I'd rather have I guy I trusted than 2%.

Totally agreed- I hope mine never retires!- but I'd still find it annoying.

 

[braumeister]

I would not bag my Dentist that I've been going to for 30 years to get 2% cash back.

I'd rather have I guy I trusted than 2%.

Totally agreed- I hope mine never retires!- but I'd still find it annoying.

+1
This is the key.
DW has been going to the same dentist for over 40 years and I’ve been seeing him for 30. His daughter took over the practice a couple of years ago but he’s still in there at least part of most days to help and advise. We love them both!

No membership in any dental plans, so not “in network” anywhere. They will bill your insurance if you have it, but then bill you directly for whatever insurance didn’t pay. Well worth it.

 

[RunningBum]

It's not the Kroger stores. Just the Food Co stores. But because Food Co is owned by Kroger, the headlines run that it's Kroger!

Yeah, and it would be helpful if the title of this thread reflected that it's limited to those stores.

 

[ownyourfuture]

Does he give you special discount for actual greenbacks?

Glad you mentioned that, I had forgotten. Yes, the total cost is supposed to be
$143.00, but if you pay by check/cash you receive a discount of $7.15 (5.00%)
See scan