I have a Debit Mastercard. After two years teetering on the brink of bankruptcy with the threat of foreclosure on my home hanging over me, I love my Debit Mastercard. Debt free now and renting, I can shop when I want where I want, online or off, without having to worry about bank fees. I know the exact price of every penny I spend and, as a single mother subsisting on nothing but her pension at the moment, those pennies are rather important to me.
Lately, however, something seems to be going wrong. For some reason, my Mastercard transactions have not been going through and I’ve been left at the counter with a queue of people waiting patiently (or not) behind me and then I end up having to push the “Savings” button instead of “Credit” and there goes that litre of milk I might have needed next week, or Caspar’s Freddo Frog.
Today, in a random tweet from S.H. Convery of Ginger and Honey I found out what has been going wrong. She got an answer from her bank, and I checked it out on the web.
Woolworths dumps Visa, MasterCard debit
Someone in the comments thread of that article thought it was an April Fool’s joke, but no. Liz Tay confirmed the story with both Woolworths and Visa. Woolworths is in the process of disabling the “Credit” option for Debit CCs across all their stores “including Big W, BWS, Dan Murphy’s, Dick Smith, Tandy, Thomas Dux and ALH, as well as Woolworths and Safeway supermarkets, liquor stores and petrol outlets.” And they are expecting savings “in the millions”.
Woolworths says “We can keep our costs low enabling us to deliver increased value to our customers.”
Visa’s ANZ general manager, Chris Clark, says, “there’s very little cost differential” (between debit CCs and EFTPOS) and that the move is “anti-consumer choice”.
Well, sure. It is. And I don’t know about you but I always assume, based on previous experience, that when corporate spokespeople says “customers” in this kind of context what they really mean is “shareholders”. But consumer choice, and corporate profit-seeking really aren’t my biggest issue here.
In all their stores they display Visa and Mastercard acceptance marks. This is not as simple as just showing a logo. Mastercard has Acceptance Mark Specifications and states, “Acceptance Marks and Brand Marks are not interchangeable. Each has a distinct purpose.” That purpose is to notify customers that they are able to pay with their Mastercard and while there are various designs for various products, there is absolutely no brand acceptance mark I could find which makes a distinction between the debit/credit product. I’m going to assume Visa uses the same practice.
I’m not a lawyer, and this is only my opinion, but doesn’t this qualifies as Misleading & deceptive conduct under the Trade Practices Act?
There is a very broad provision in the Trade Practices Act that prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive you.
It makes no difference whether the business intended to mislead or deceive you—it is how the conduct of the business affected your thoughts and beliefs that matters.
~ Australian Competition and Consumer Commission
I’ve already provided the example: I walk into a store which displays a sign meaning it accepts my chosen form of payment. That is the bait. Then I shop and I take my goods to the counter to pay for them. Once there, I am forced to pay by another method which costs me additional money.
Do I have the choice to just leave the store without purchasing the goods? Sure. But as anyone knows (and especially a mother who has on occasion had to pay for food with 5 cent pieces) there is actually a lot of pressure in checkout queues to make your purchase efficiently and it is extremely uncomfortable to even make repeat swipes, let alone just walk out knowing everyone thinks you can’t afford to pay. So Debit MC/Visa card users are baited and Woolworths game seems to be Hook, Line and Sucker.
Moreover, at no store where I have had this happen has the staff member at the counter informed me what the problem was. They just let me repeat the Mastercard transaction until I give up. Whether that is because they are poorly informed or have been instructed to not mention it is anyone’s guess, but either way… Surely that qualifies as deceptive conduct?
I should also note that I have this experience recently at stores which are not part of the Woolworths Limited as well. I will not mention them by name here as I have not yet had confirmation but this looks like it will be an escalating problem. As Chris Clark stated, “”It puts into question the competitive landscape for the entire payments industry when a major dominant retailer can decide not to accept a payment solution that is strongly supported by the public.”
We all dislike having mega-corporations pass their operating costs on to us to increase their profit margin. We all dislike having our consumer choices limited. And we really really dislike being misled.
So I’m asking you guys to please pass the word around – blog, tweet, whatever – so that Woolworths, and anyone else following suit, can’t just make these changes under the radar.
I’m asking Visa and Mastercard… Is it really okay for businesses to display your Acceptance Marks when they only accept the cards of some of your customers?
And I’m asking Woolworths Limited to tell the truth. Just be honest. Put up huge signs stating you no longer accept our money our way. Announce it regularly over the your PA systems in store. Inform your staff that they must inform your customers at point of purchase. Whether my understanding of the Trade Practices Act is right or wrong, doing anything less than that… Well, it doesn’t even come close to meeting community standards of integrity.
Sneaky, underhand and leaving the impression of something faintly smutty and unclean….now supermarkets are on an equal footing with banks. Hmph.
How is this going against consumer choice? It’s the exact same money, no matter which account you select, except the Bank providing the eftpos terminal takes a larger cut when you select Credit. Why should the bank make any more money off the transaction than they already do?
Basically, here’s how it works…
I have a debit visa card. If I put my card in to a terminal and select ‘Savings’ or ‘Credit’ the money comes out of the same account on my end.
I have no overdraw, or benefits for choosing one over the other.
If I hit ‘Savings’ the store gets charges a TINY fee by the bank, less than 1%. If I hit ‘Credit’ (even though the bank is not using their money to pay for the
like they would on a real credit card) the bank charges the store about 1% as a fee.
So good on Woolworths for taking a stand on this issue.
Jayne, I think the major supermarkets were already on par with banks for gouging customers anyway.
Mat, I think you missed the main point of my post which is about the issue of false advertising.
Regarding consumer choice, obviously any business is entitled to accept whatever payment forms they choose. The price differential for retailers isn’t the bank taking a larger cut, it is actually the bank taking theirs, and the card providers (Visa/MC) taking theirs as well. Extra middlemen cost money. If that puts such an enormous strain on companies the size of Woollies, then why are they accepting MC/Visa at all?
For the same reason they haven’t, like Aldi, placed a surcharge on credit transaction. Because it would end up costing them business and neither want or have to offer price points low enough to justify those charges. So instead, they deceptively claim to offer a service and then deny it to consumer group small enough to be unable to hit their pockets to hard by objecting. Not one cent of Woolies savings by doing this will ever see its way to lower prices on the shelves so even if you don’t make your purchase this way, why would you support them inconveniencing someone else.
And your numbers for what the differential is between the cost per transaction of EFTPOS vs. Visa/MC, by the way, are false. It is a matter of a few cents for the businesses (and trending lower and lower) whereas for consumers, it can cost anywhere between $0-$4 with zero notification at point of purchase of the added cost.
Sure, banks suck. But do you really think the massive supermarket chains which have far too much power over both consumers and producers in this country are just nice guys trying to make a buck?
Oh, lovely.
I only found this out today. Only went to woolies to buy milk, paper and lollies. We usually only use woolies for cleaning products, toilet paper and coffee. My wife from Germany has me shopping locally for fruit n veg, meat. with a saving of $40 per week, where i use to do all my shopping at woolies. The fact is, the little old lady with a walking frame and never driven in her life pays for fuel and rewards card subsidy as with everyone else at the check out. Those that use fuel dockets can save up to $2.40 per week. Why would you, when going local can save up to $40 per week.Btw, I stick with the one independent garage, sure his price is the same as Woolies without the docket, however, at least once a month, he can be up to 18c a litre cheaper then woolies with a docket. Time people started to show what they think of this monopoly and start shopping local. Once your green grocer and butcher gets to know you, they always throw something in for free, or knock of a few dollars here and there. have a look at pork loin chops at woolies, $15.99 per kilo, the dearest I have seen them at a butcher is $6.99 per kilo, average price $5.99 per kilo. Tomatoes up to $5 per kilo cheaper then woolies, you can leave them on the bench for a week without them going rotten, same for other fruit and vegies.
I don’t think it will be much longer before Coles and IGA follow suit. Just my 2 cents worth but financially better off by shopping local.