Foods Co. Supermarkets is turning its back on Visa because of an ongoing dispute about high fees that retailers face when accepting credit cards at the register.
Visa ban may be expanded to other Kroger-owned stores
The Visa ban at Foods Co., which is owned by Kroger, affects 21 stores and five fuel centers in California and goes into effect later this month, according to Bloomberg.
At this time, the ban does not apply to any of the nearly 2,800 stores across two dozen supermarket chains that Kroger also owns.
However, that could change soon.
Kroger’s executive vice president Chris Hjelm tells the media outlet that the nation’s largest grocery operator is thinking about expanding the ban beyond just Foods Co. stores if need be.
“If we have to expand that beyond Foods Co., we’re prepared to take that step,” Hjelm said, calling Visa’s card fees “out of alignment.”
Retailers currently pay $90 billion in swipe fees to Visa annually.
“We don’t believe we have a choice but to use whatever mechanism possible to get it back in alignment.”
While it’s possible that Visa and Foods Co. will work out their issues, there certainly is precedent in the industry for successful grocery stores turning their backs on credit cards.
Prior to two years ago, Aldi only accepted cash and select debit cards. That all changed in March 2016 when the discount grocer starting taking Visa, MasterCard, Discover and American Express at checkout.
But there is one grocery store that’s never changed its “no credit cards” policy.
It’s an employee-owned grocery store called WinCo with locations in Arizona, California, Idaho, Nevada, Oklahoma, Oregon, Texas, Utah, and Washington. As you might imagine, WinCo cites the high fees that go along with credit card processing for the reason it won’t accept them.
Interestingly, both Aldi and WinCo were named among the cheapest grocery stores in America last year. So maybe they’re onto something. Maybe not accepting credit cards isn’t such a bad thing if it allows grocers to hold food prices down!