Foods Co., a Kroger-owned line of California Food 4 Less stores, now has 21 retail stores and 5 gas stations in California that no longer accept Visa credit cards.
Kroger will start the change on August 14, to avoid Visa’s high fees on credit card swipes. As the nation’s largest grocer, Kroger is seeking to lower these fees and has stated a willingness to expand the ban to further stores if a deal cannot be struck with Visa.
The company’s chief information officer, Chris Hjelm, stated that the change is with the customer in mind, “We are going to continue to work with Visa to get where we think is good for our customers, good for Kroger and works for Visa. If that means a ban at more stores, “that’s what we will have to do,” he said.
The Kroger Co. is not the only store to pay fees on credit-card purchases. In fact, retailers pay $90 billion in “swipe fees” annually. The Foods Co. change is a result of Visa’s rates, which are among the highest.
Cash, checks, and debit cards can be used without as much penalty for the grocery. Debit cards, a close relative to the credit card, often ask a much smaller fee from the retailer. For this reason, Kroger wishes to “get credit to a much more competitive place than it is today,” Hjelm said.
The change will allow Foods Co. to support their dedication to low prices, while still accepting Visa debit cards, MasterCard, American Express, and Discover.
Foods Co. President Bryan Kaltenbach says he understands that the change will be big for some of their customers, but that it is ultimately to better their experience. “…we believe this change will benefit all our customers by allowing our Foods Co. stores to continue to offer the things our customers value most, including our low prices, fresh produce and services,” Kaltenbach stated.
As for Visa, they aren’t as happy about the choice. In a statement about the ban, they’ve said they are “disappointed at Kroger’s decision.” Yet, they stay, “committed to working with Kroger to reach a reasonable solution.”
No information on if Arizona Kroger stores will be impacted.