Smith's Food & Drug stopping Visa acceptance

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SamSpade
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Smith's Food & Drug stopping Visa acceptance

Post by SamSpade » March 1st, 2019, 7:23 am

:idea: Guess they're here to play hard ball.
https://twitter.com/BenWinslow/status/1 ... 9097109507

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Re: Smith's Food & Drug stopping Visa acceptance

Post by pseudo3d » March 1st, 2019, 8:17 am

SamSpade wrote:
March 1st, 2019, 7:23 am
:idea: Guess they're here to play hard ball.
https://twitter.com/BenWinslow/status/1 ... 9097109507
I'm sure Albertsons appreciates the sentiment, though.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by Super S » March 1st, 2019, 11:01 am

pseudo3d wrote:
March 1st, 2019, 8:17 am
SamSpade wrote:
March 1st, 2019, 7:23 am
:idea: Guess they're here to play hard ball.
https://twitter.com/BenWinslow/status/1 ... 9097109507
I'm sure Albertsons appreciates the sentiment, though.
Interesting. For years it was always American Express that had excessive fees, at least with smaller businesses.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by storewanderer » March 2nd, 2019, 12:26 am

Super S wrote:
March 1st, 2019, 11:01 am
pseudo3d wrote:
March 1st, 2019, 8:17 am
SamSpade wrote:
March 1st, 2019, 7:23 am
:idea: Guess they're here to play hard ball.
https://twitter.com/BenWinslow/status/1 ... 9097109507
I'm sure Albertsons appreciates the sentiment, though.
Interesting. For years it was always American Express that had excessive fees, at least with smaller businesses.
I am sure there has been a big celebration in Boise today when this news broke. Because it is such a stupid move.

American Express still has higher fees. Kroger is just playing hardball with Visa. And they are using Smiths customers and employees as pawns in the situation.

I think Kroger should just end Visa acceptance at all stores. See how it works out. They will lose customers, but maybe the loss in customers will be made up for in profitability by the decrease in card processing fees. People who want to use Visa Credit Cards for groceries have NUMEROUS other options to go get groceries at. I think people are probably more loyal to their "rewards based" credit card than they are to their grocery store. And Visa has so many different cards out there, I think a lot of people who accumulate credit card rewards have a wallet full of Visa cards co-branded with various companies issued by various banks.

Or maybe it plays out that everyone who used Visa Credit at Kroger loves Kroger so much that they keep shopping there but change payment types. That will hurt Visa and force them to cave in. There is so much competition in the grocery business, however, that I do not think this scenario will play out.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by marshd1000 » March 2nd, 2019, 7:34 am

I just recently received an application for a Smith’s Rewards credit card! I hadn’t noticed if it was Visa or MasterCard. Upon looking at it, I see it is MasterCard. So I am guessing that Kroger has been frustrated with Visa for a long time since there wasn’t an application for a Smith’s branded Visa. On a side note, I’m not sure why I got an application for the Smith’s card? I live near Seattle and have the QFC and Fred Meyer loyalty cards. When in Idaho, Montana and Wyoming on vacation last summer, I did use my QFC card at Smith’s. Just was surprised that I didn’t get an application for a QFC or Fred Meyer branded MasterCard! Getting back to Kroger divisions not using Visa, I think that would be particularly be harmful in divisions like Fred Meyer!

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Re: Smith's Food & Drug stopping Visa acceptance

Post by Super S » March 2nd, 2019, 7:49 am

marshd1000 wrote:
March 2nd, 2019, 7:34 am
I just recently received an application for a Smith’s Rewards credit card! I hadn’t noticed if it was Visa or MasterCard. Upon looking at it, I see it is MasterCard. So I am guessing that Kroger has been frustrated with Visa for a long time since there wasn’t an application for a Smith’s branded Visa. On a side note, I’m not sure why I got an application for the Smith’s card? I live near Seattle and have the QFC and Fred Meyer loyalty cards. When in Idaho, Montana and Wyoming on vacation last summer, I did use my QFC card at Smith’s. Just was surprised that I didn’t get an application for a QFC or Fred Meyer branded MasterCard! Getting back to Kroger divisions not using Visa, I think that would be particularly be harmful in divisions like Fred Meyer!
While not exactly the same kind of store, WinCo does just fine not accepting any credit cards. At Fred Meyer it probably would not have as big of an effect on the grocery end as it would on the GM end.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by klkla » March 2nd, 2019, 9:43 am

storewanderer wrote:
March 2nd, 2019, 12:26 am
I am sure there has been a big celebration in Boise today when this news broke. Because it is such a stupid move. ... I think Kroger should just end Visa acceptance at all stores. See how it works out. They will lose customers, but maybe the loss in customers will be made up for in profitability by the decrease in card processing fees.
I have no idea if Boise is celebrating or not, but by doing this division by division they are signaling to their competitors that they are serious about this issue and I am sure they are hoping that their competitors will join in the fight. If they don't jump in Kroger will have to give up the fight.

As I understand it the issue boils down to the rates charged for different types of cards. I own a business and am shocked at the amount charged for Visa cards that offer award programs. The fees continue to escalate each year. My business has higher margins than a grocery store so it's not as big a deal but I can see why Kroger is trying to bring more attention to this matter.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by storewanderer » March 2nd, 2019, 9:57 am

klkla wrote:
March 2nd, 2019, 9:43 am
storewanderer wrote:
March 2nd, 2019, 12:26 am
I am sure there has been a big celebration in Boise today when this news broke. Because it is such a stupid move. ... I think Kroger should just end Visa acceptance at all stores. See how it works out. They will lose customers, but maybe the loss in customers will be made up for in profitability by the decrease in card processing fees.
I have no idea if Boise is celebrating or not, but by doing this division by division they are signaling to their competitors that they are serious about this issue and I am sure they are hoping that their competitors will join in the fight. If they don't jump in Kroger will have to give up the fight.

As I understand it the issue boils down to the rates charged for different types of cards. I own a business and am shocked at the amount charged for Visa cards that offer award programs. The fees continue to escalate each year. My business has higher margins than a grocery store so it's not as big a deal but I can see why Kroger is trying to bring more attention to this matter.
I think it came out recently those fees are going to be rising again.

I do not expect many if any Kroger competitors to join in on this. Smith's division has a ton of competitors touching Albertsons NorCal, Intermountain, Southwest, and Denver divisions so it isn't like one of those divisions could easily change policy (they could apply it to just their few stores that compete with Smiths, but when you are talking store counts in the single digits is it even worth it for a division to bother with an exception policy in a few stores to go along with Kroger). Then there are Sprouts, Trader Joes, Whole Foods, and Wal Mart going against Smiths in its major markets and again I just do not see them going along with this. Too much at stake at Wal Mart where they deal with much higher dollar purchases/transactions. Then you have those independents that Smiths competes with in most of the mountain states and I am sure those small business owners really feel credit card fees but would they go along with this or see it as an opportunity to steal customers?

I think they should have done this at Ralphs and/or Food 4 Less. Those two chains only compete with one Albertsons division so if they wanted to entice them to join in, that would have been a logical spot to do this. But then there are all those other pesky competitors in SoCal, similar to the strike, and even moreso today with all the closures, people in SoCal can get by without the conventional grocers. Also, California consumers are already somewhat familiar with hassles about card acceptance (the gas stations with a cash price credit price, WinCo and Arco being debit only, and scattered other random businesses like a great small grocery and deli in Santa Monica) who have gone debit only due to high fraud or fees.

The merchants have the ability to surcharge legally. That may be a better path to take. But Visa has made it difficult with all these different rates for different card types. Still, the surcharge is one that I expect if one started it, many others would follow. Similar to those gas stations in California with the "cash price credit price." Now they almost all do it that way, short of some big company operated sites that still do a single price. When it started, the oil companies were trying to say it was against their branding agreements, etc., then eventually settled to allow it if the stations extended the cash price to the oil company branded cards and seem okay with it now. Yet go to a place like Kansas or Oklahoma and the "cash price credit price" is unheardof at gas stations because nobody ever tried it there.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by arizonaguy » March 2nd, 2019, 3:44 pm

storewanderer wrote:
March 2nd, 2019, 9:57 am
klkla wrote:
March 2nd, 2019, 9:43 am
storewanderer wrote:
March 2nd, 2019, 12:26 am
I am sure there has been a big celebration in Boise today when this news broke. Because it is such a stupid move. ... I think Kroger should just end Visa acceptance at all stores. See how it works out. They will lose customers, but maybe the loss in customers will be made up for in profitability by the decrease in card processing fees.
I have no idea if Boise is celebrating or not, but by doing this division by division they are signaling to their competitors that they are serious about this issue and I am sure they are hoping that their competitors will join in the fight. If they don't jump in Kroger will have to give up the fight.

As I understand it the issue boils down to the rates charged for different types of cards. I own a business and am shocked at the amount charged for Visa cards that offer award programs. The fees continue to escalate each year. My business has higher margins than a grocery store so it's not as big a deal but I can see why Kroger is trying to bring more attention to this matter.
I think it came out recently those fees are going to be rising again.

I do not expect many if any Kroger competitors to join in on this. Smith's division has a ton of competitors touching Albertsons NorCal, Intermountain, Southwest, and Denver divisions so it isn't like one of those divisions could easily change policy (they could apply it to just their few stores that compete with Smiths, but when you are talking store counts in the single digits is it even worth it for a division to bother with an exception policy in a few stores to go along with Kroger). Then there are Sprouts, Trader Joes, Whole Foods, and Wal Mart going against Smiths in its major markets and again I just do not see them going along with this. Too much at stake at Wal Mart where they deal with much higher dollar purchases/transactions. Then you have those independents that Smiths competes with in most of the mountain states and I am sure those small business owners really feel credit card fees but would they go along with this or see it as an opportunity to steal customers?

I think they should have done this at Ralphs and/or Food 4 Less. Those two chains only compete with one Albertsons division so if they wanted to entice them to join in, that would have been a logical spot to do this. But then there are all those other pesky competitors in SoCal, similar to the strike, and even moreso today with all the closures, people in SoCal can get by without the conventional grocers. Also, California consumers are already somewhat familiar with hassles about card acceptance (the gas stations with a cash price credit price, WinCo and Arco being debit only, and scattered other random businesses like a great small grocery and deli in Santa Monica) who have gone debit only due to high fraud or fees.

The merchants have the ability to surcharge legally. That may be a better path to take. But Visa has made it difficult with all these different rates for different card types. Still, the surcharge is one that I expect if one started it, many others would follow. Similar to those gas stations in California with the "cash price credit price." Now they almost all do it that way, short of some big company operated sites that still do a single price. When it started, the oil companies were trying to say it was against their branding agreements, etc., then eventually settled to allow it if the stations extended the cash price to the oil company branded cards and seem okay with it now. Yet go to a place like Kansas or Oklahoma and the "cash price credit price" is unheardof at gas stations because nobody ever tried it there.
Safeway tried the Cash Price / Credit Price at its gas stations in Arizona. Nobody else around here did it (and even ARCO has abandoned its backwards pricing scheme in this market). Safeway fuel centers gave up on the separate pricing about a year and a half ago (as people simply chose to go elsewhere without gimmicks).

Phoenix has a ridiculously competitive grocery market (even though Albertsons and Safeway have combined). I'd imagine that Albertsons/Safeway, Bashas', Sprouts, Whole Foods, Trader Joe's, Smart and Final, Walmart, and the other chains won't end up joining Kroger in this market if Kroger ended Visa. Costco is a major player in Phoenix as well (stronger here than a lot of their markets) and they're Visa only. I'd probably transfer about 75% of my shopping from Fry's to Safeway (as I've become pretty good with their Just 4 You program and Safeway is closer with friendlier employees). I'm not sure I'd be alone in this.

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Re: Smith's Food & Drug stopping Visa acceptance

Post by rwsandiego » March 2nd, 2019, 5:06 pm

arizonaguy wrote:
March 2nd, 2019, 3:44 pm
storewanderer wrote:
March 2nd, 2019, 9:57 am
klkla wrote:
March 2nd, 2019, 9:43 am


I have no idea if Boise is celebrating or not, but by doing this division by division they are signaling to their competitors that they are serious about this issue and I am sure they are hoping that their competitors will join in the fight. If they don't jump in Kroger will have to give up the fight.

As I understand it the issue boils down to the rates charged for different types of cards. I own a business and am shocked at the amount charged for Visa cards that offer award programs. The fees continue to escalate each year. My business has higher margins than a grocery store so it's not as big a deal but I can see why Kroger is trying to bring more attention to this matter.
I think it came out recently those fees are going to be rising again.

I do not expect many if any Kroger competitors to join in on this. Smith's division has a ton of competitors touching Albertsons NorCal, Intermountain, Southwest, and Denver divisions so it isn't like one of those divisions could easily change policy (they could apply it to just their few stores that compete with Smiths, but when you are talking store counts in the single digits is it even worth it for a division to bother with an exception policy in a few stores to go along with Kroger). Then there are Sprouts, Trader Joes, Whole Foods, and Wal Mart going against Smiths in its major markets and again I just do not see them going along with this. Too much at stake at Wal Mart where they deal with much higher dollar purchases/transactions. Then you have those independents that Smiths competes with in most of the mountain states and I am sure those small business owners really feel credit card fees but would they go along with this or see it as an opportunity to steal customers?

I think they should have done this at Ralphs and/or Food 4 Less. Those two chains only compete with one Albertsons division so if they wanted to entice them to join in, that would have been a logical spot to do this. But then there are all those other pesky competitors in SoCal, similar to the strike, and even moreso today with all the closures, people in SoCal can get by without the conventional grocers. Also, California consumers are already somewhat familiar with hassles about card acceptance (the gas stations with a cash price credit price, WinCo and Arco being debit only, and scattered other random businesses like a great small grocery and deli in Santa Monica) who have gone debit only due to high fraud or fees.

The merchants have the ability to surcharge legally. That may be a better path to take. But Visa has made it difficult with all these different rates for different card types. Still, the surcharge is one that I expect if one started it, many others would follow. Similar to those gas stations in California with the "cash price credit price." Now they almost all do it that way, short of some big company operated sites that still do a single price. When it started, the oil companies were trying to say it was against their branding agreements, etc., then eventually settled to allow it if the stations extended the cash price to the oil company branded cards and seem okay with it now. Yet go to a place like Kansas or Oklahoma and the "cash price credit price" is unheardof at gas stations because nobody ever tried it there.
Safeway tried the Cash Price / Credit Price at its gas stations in Arizona. Nobody else around here did it (and even ARCO has abandoned its backwards pricing scheme in this market). Safeway fuel centers gave up on the separate pricing about a year and a half ago (as people simply chose to go elsewhere without gimmicks).

Phoenix has a ridiculously competitive grocery market (even though Albertsons and Safeway have combined). I'd imagine that Albertsons/Safeway, Bashas', Sprouts, Whole Foods, Trader Joe's, Smart and Final, Walmart, and the other chains won't end up joining Kroger in this market if Kroger ended Visa. Costco is a major player in Phoenix as well (stronger here than a lot of their markets) and they're Visa only. I'd probably transfer about 75% of my shopping from Fry's to Safeway (as I've become pretty good with their Just 4 You program and Safeway is closer with friendlier employees). I'm not sure I'd be alone in this.
My two rewards credit cards are Visas, so I would do even less shopping at Fry's than I already do.

@arizonaguy, I agree - If Fry's tries this in Phoenix they will fail.

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