Visa Update: Visa Offers $10 in Free Groceries to Shop Somewhere ElsePosted November 14, 2016 in News
The battle between Visa and Walmart over credit card interchange fees just got more intense. Visa is now offering its cardholders in Thunder Bay, Ontario, a $10 rebate when they use their Visa card to spend at least $50 at any supermarket.
Thunder Bay just happens to be one of the locations Walmart has banned Visa. Could this be just a strange coincidence? I highly doubt it.
$10 off groceries isn’t a game-changer. In fact, the deal is only for a limited time. In order to take advantage, you have to enroll in the offer before November 30, 2016. After that, you only have 15 days to use the credit. You have to spend at least $50 on one shopping trip to the grocery store to get the $10 off your purchase. Here are links to the offers:
Walmart recently expanded its rolling ban of Visa to all 14 of its locations in Manitoba. Coincidentally, Visa also started offering $10 in free groceries shortly after. Obviously, since Walmart no longer accepts Visa in Manitoba, cardholders have to shop somewhere else to take advantage.
Why is Walmart’s Rolling Ban Taking So Long?
It’s been five months since Walmart announced it would be banning Visa at its over 400 locations in Canada. Instead of yanking out Visa cards from all its Canadian locations at once, Walmart is slowing removing them. What gives?
The rolling ban has led to speculation from industry experts that perhaps Walmart is ready to throw in the towel. Not so, according to the retail giant. Walmart has fired back, saying that removing Visa isn’t quite that easy. Not only does it involve changing technology, associates need to be trained.
Walmart also needs the time to spread the word to its customers. It doesn’t want customers to show up at its locations where Visa is banned with a shopping cart full of groceries, without a backup payment method.
I’m just speculating, but it seems Visa is testing the water with smaller regions. While Thunder Bay and Manitoba have some store locations, they certainly aren’t heavily populated areas like Toronto or Vancouver. Perhaps Walmart wants to see if same store sales fall at some of its smaller locations before they decide to expand the ban to their flagship store locations.
It might not be the end of the world if Walmart no longer accepts Visa. For instance, grocery store giant Loblaw doesn’t accept Visa, only MasterCard.
A Dangerous Precedent
This battle all comes down to credit card interchange fees – the fees paid by retailers behind the scenes every time you swipe (or “chip”) your credit card. Walmart allegedly wants lower interchange fees than charities. That doesn’t fly with Visa.
Here’s another reason why Visa won’t budge: if it gives Walmart a break on interchange fees, the retail giant will expect the same deal south of the border in the United States where a lot more is at stake.
That’s not all. It sets a dangerous precedent for other Canadian – and American – retailers negotiating with Visa over interchange fees. They’ll likely ask for the “Walmart special” on interchange fees, which will undoubtedly hurt Visa’s bottom line and could lead to lower rewards for cardholders.
The Bottom Line
It will be interesting to see who blinks first. Both Walmart and Visa have a lot at stake. Small businesses are cheering on Walmart in its battle over interchange fees (although lower interchange fees for Walmart could mean higher interchange fees for them). Who will prevail? Only time will tell, but we’ll keep you posted.
Featured photo via flickr – credit Mike Mozart