Kroger bans Visa cards

[Amethyst]

Essentially, Kroger doesn't want to pay Visa's swipe fees.

We earn a nice bit of change from Visa and Master Card rebates and other incentives. Still, I've been wondering how much the various credit card incentive/rebate programs have pushed up bank charges to merchants, and whether a pushback by merchants could eventually cause banks to scrap rebates.

https://www.usatoday.com/story/money/2018/08/01/kroger-ban-visa-credit-card/881228002/

 

[omni550]

I see that this is currently limited to a few dozen stores in California. Perhaps it's a pilot?

I'd hate for this to roll-out nationally as Kroger is 1/2 mile away and I ALWAYS pay with my Visa card.

I noticed that at 'my' Kroger they recently started a program where you can scan and bag your own groceries with a hand-held scanner so you don't need to go through a check-out line. They've even incentivized this -- I think you get something like a $5 discount the first time you try it on a purchase of $35 or more. This may also be a pilot.

Looks like they are looking to cut costs, big time.

omni

 

[audreyh1]

Essentially, Kroger doesn't want to pay Visa's swipe fees.

We earn a nice bit of change from Visa and Master Card rebates and other incentives. Still, I've been wondering how much the various credit card incentive/rebate programs have pushed up bank charges to merchants, and whether a pushback by merchants could eventually cause banks to scrap rebates.

https://www.usatoday.com/story/money/2018/08/01/kroger-ban-visa-credit-card/881228002/

Wow! Well I use my American Express Blue at Kroger anyway. 6% back on groceries.

 

[athena53]

Interesting- they'll have to pick their battles. I was unhappy to find that my nice new American Airlines MC wasn't accepted by the business doing work on my house- that charge would have made up half the $3K I had to spend to get the 60,000-mile signing bonus. I gave them my trusty Fidelity 2% cashback Visa. I've also run into businesses, mostly smaller ones, that don't take American Express due to high swipe fees.

If I were a retailer I'd have to choose only one out of the Big 3 to ban.

 

[Amethyst]

While most of the contractors who work on or around our house accept CC's, they all charge 3% or 4% extra for doing so. Otherwise we really would have raked in the rebates. Same with property taxes - we could use a CC to pay, but the fee would add more than $300.00 to the yearly charge.

I was unhappy to find that my nice new American Airlines MC wasn't accepted by the business doing work on my house- that charge would have made up half the $3K I had to spend to get the 60,000-mile signing bonus. I gave them my trusty Fidelity 2% cashback Visa. .

 

[GalaxyBoy]

Wow! Well I use my American Express Blue at Kroger anyway. 6% back on groceries.

+1. I wish Kroger would take NFC payments like Apple Pay, but it appears they have been resisting that.

Our local Kroger has rolled out the self-scan and at the same time eliminated the express lanes in favor of additional self check out lanes. I find the hand scanners to be too time consuming, and the self check gives me (and others around me) too many errors where it locks up until the attendant comes over to reset it. Now they're re-arranging the entire store again.

Sorry, this is turning into the Pet Peeve of the Day thread.

 

[FIREd_2015]

WinCo is another grocery store that doesn't accept credit cards.

 

[candrew]

I noticed that at 'my' Kroger they recently started a program where you can scan and bag your own groceries with a hand-held scanner so you don't need to go through a check-out line.

Looks like they are looking to cut costs, big time.

omni

Next they'll want customers to stock the shelves, round-up stray carts in the parking lot and mop the floors, too.

 

[Chuckanut]

Next they'll want customers to stock the shelves, round-up stray carts in the parking lot and mop the floors, too.

We have to bring our own bags (a city law), bag the groceries ourselves and then polish the shoes of the Welcome Gal on the way out. But, I get bonus points to use on all sorts of industrial processed junk food I no longer eat.

 

[Lakedog]

I see that this is currently limited to a few dozen stores in California. Perhaps it's a pilot?

Guess USAToday is going for headlines as this appears to involve only 21 stores owned by Kroger in CA branded as Food Co. No Kroger branded stores at all, at least yet, so maybe they are doing a test run on a smaller footprint?

 

[Brat]

If they ban Visa I will shop elsewhere.

 

[HadEnuff]

there needs to be, and IMO will be, some sort of push back from the merchants. When I ran my dental practice, and we started taking credit card payments, the swipe fee was relatively small, and consistent, and worth the money it cost us in order to be paid at the moment.

By the time I retired the swipe fees were all over the place, and they were at the point where I was about to stop accepting them. I am sure this is the price, being paid by the merchants, for the marketing game played by the CC companies of offering bigger and bigger rewards for using their particular card.
At some point, something has to give, and I suspect that what Kroger is doing is the start of a trend.

 

[FIREmenow]

They are closing a whole bunch of stores here in NC. I think they're in trouble.

 

[mpeirce]

+1. I wish Kroger would take NFC payments like Apple Pay, but it appears they have been resisting that.

It's odd to me. One of the benefits of self-scan for Kroger is that it speeds people through their checkouts. Apple Pay also speeds people through checkouts.

Eventually they'll get around to it. One reason my DW favors Meijer over Kroger is that Meijer takes Apple Pay. So does Aldi for that matter. Though really the only thing I buy there is their 85% cocoa chocolate bars.

 

[audreyh1]

It's odd to me. One of the benefits of self-scan for Kroger is that it speeds people through their checkouts. Apple Pay also speeds people through checkouts.

Eventually they'll get around to it. One reason my DW favors Meijer over Kroger is that Meijer takes Apple Pay. So does Aldo for that matter. Though really the only thing I buy there is their 85% cocoa chocolate bars.

Definitely the fastest checkout I experience is with Apple Pay - way faster than anything else. But for me for groceries, Sprouts is the only place accepting it.

BTW - all these chip credit cards now don't require signature, but stores still ask for signatures. I know, I know, they have to update their terminal software......

 

[travelover]

WinCo is another grocery store that doesn't accept credit cards.

Actually most grocery stores did not used to accept credit cards. Winco is all about low prices, so it is logical to me that they avoid the extra expense of credit card fees.

 

[Jerry1]

A local True Value store charged me a fee to use my credit card. It was about a $20 charge and the fee was about $1.50. The biggest issue I have is there was nothing to let me know about this charge before I paid. Even then, I didn’t notice it. Of course had it been a bigger purchase, I would have noticed. Point is, no warning. Guess what hardware I no longer patronize.

 

[braumeister]

A local True Value store charged me a fee to use my credit card. It was about a $20 charge and the fee was about $1.50. The biggest issue I have is there was nothing to let me know about this charge before I paid. Even then, I didn’t notice it. Of course had it been a bigger purchase, I would have noticed. Point is, no warning. Guess what hardware I no longer patronize.

I believe that’s a violation of their merchant agreement with Visa.

 

[explanade]

Wow! Well I use my American Express Blue at Kroger anyway. 6% back on groceries.

I get only 3% on my Amex Blue Cash but no annual fee.

For that extra 3% to be worth the $95 annual fee, you would need to spend over $3,166.

Also use Chase Freedom, which will always have one quarter during the year of offering 5x points, redeemable towards cash or transferring to airlines if you have a premium Chase card.


I've never shopped Krogers. But Whole Foods, Trader Joe's, Safeways and Lucky supermarkets all have NFC or Apple Pay in the Bay Area.

 

[Teacher Terry]

Winco is so much cheaper that I am fine with them not taking CC’s.

 

[fosterscik]

I get only 3% on my Amex Blue Cash but no annual fee.

For that extra 3% to be worth the $95 annual fee, you would need to spend over $3,166.

Also use Chase Freedom, which will always have one quarter during the year of offering 5x points, redeemable towards cash or transferring to airlines if you have a premium Chase card.


I've never shopped Krogers. But Whole Foods, Trader Joe's, Safeways and Lucky supermarkets all have NFC or Apple Pay in the Bay Area.

I'm also a 6% Amex user at Kroger. It's easy to get the extra benefits (through extra spending). I regularly buy amazon gift cards so that all my amazon spending becomes 6% back (and I get very cheap gas for the car because I buy cards when Kroger has their 4X fuel bonus weekends for card purchases). It's been a long time since I filled up with anything less than a $1 discount per gallon on gas.

 

[Walt34]

By the time I retired the swipe fees were all over the place, and they were at the point where I was about to stop accepting them. I am sure this is the price, being paid by the merchants, for the marketing game played by the CC companies of offering bigger and bigger rewards for using their particular card.
At some point, something has to give, and I suspect that what Kroger is doing is the start of a trend.

I've been wondering about that myself. There aren't any Kroger stores around here so even if the whole chain bans Visa it won't affect us. But I'm sure other stores would take similar actions. We have a M/C that rebates 2%, a Visa that rebates 1.5%, and at the moment the Sears M/C has a program going that gives a statement credit of 5% on gas, groceries and restaurants. That money isn't coming from me, I'm sure the CC companies aren't paying it, so that leaves the merchant. There's bound to be pushback eventually.

 

[Red Badger]

They are closing a whole bunch of stores here in NC. I think they're in trouble.

Kroger acquired Harris Teeter last year. Might be effort to reduce overlap. Not sure a company with $122B in sales last year is on the ropes.

 

[Tadpole]

Maybe they needed to find some place in the budget to pay for "Fred Meyer's parent company will test grocery deliveries with driverless cars".


(Kroger is Fred Meyer's parent company.)

 

[NW-Bound]

From the article:

... Merchants like Kroger simply think that these swipe fees – which can range between 1 percent and 3 percent – are too high, says Matt Schulz, chief industry analyst at CompareCards.com, which is owned by mortgage lender LendingTree.

Grocery stores operate with profit margins below 5%, so the fee is a big deal to them, unlike clothing or other retail stores that have huge markups of 100% or more.

Does anyone recall the time in the past when no grocery stores, absolutely none, accepted credit cards? I remember that they certainly did not in the 1980's, and perhaps the 1990's.


PS - From the Web:

The average supermarket has a profit margin of about 1 percent, according to Stacey Vanek-Smith of National Public Radio. Some experts suggest this figure might be as high as 3 percent...