Are Stores Socially Irresponsible with Marketing Their Credit Cards?
I was in Kohl's yesterday because I needed some more summer clothes and that store is my favorite clothing store. I found this new line of clothes, Apt 9, that fits me absolutely perfect and I love the style as well. I bought about $100 worth of clothes and being very satisfied with the store, its selection and its prices, I brought the clothes up to the counter to pay for them. That's when I got slammed, and I mean slammed, with a sales pitch on why I should sign up for their Kohl's charge card. Here is what the conversation sounded like (to the best of my memory)
A Very Persistent and Uncalled for Credit Card Pitch
Sales Clerk: Do you have a Kohl's credit card?
Me: No, I don't.
Sales Clerk: Would you like to sign up for a Kohl's credit card to save x% on your purchases today?
Me: No thank you!
Sales Clerk: Signing up for our Kohl's card gives x% off immediately and includes you in our such and such program, which provides such and such benefits to your shopping and it will help to such and such every time you buy from us. We also have this such and such discount and reward for such and such purchases and customers.
Can I get you signed up for that today to save you $x dollars off today's purchase?
Me: No thank you!
Sales Clerk: It's just that the new Kohl's charge card has x features and it's like no other store's credit card program. Blah, blah, blah, blah, blah for like 30 seconds.
Me: No thank you!
And this went on about 2-3 more times before I got checked out with my DEBIT card (which deducts directly from my bank account) and got out the door.
My Thoughts on This High Pressure Marketing of Credit Cards
This girl was young, probably my age, and she seemed like a very quiet and respectful person. What has Kohl's done to her to make her be so rude and pushy with their stupid credit card program? I guess I thought that Kohl's was a clothing store instead of a bank. My attitude of that place has changed a lot because of my experience yesterday. I've now lumped Kohl's into the category where Best Buy is with their credit cards and extended warranty programs. They're both in the pushy, rude and social irresponsible group, in my opinion.
Why Socially Irresponsible?
Look, I don't like debt. The whole reason for existence of credit cards is to sucker people into spending more than they can afford so they can earn interest, late fees and over-your-limit fees. Credit cards don't make anything off of people like me. In fact, people like me cost them money. If only people like me used credit cards, they wouldn't be able to exist. No business can lose money and stay in operation over the long term.
And you may be asking me, "So what. What's wrong with credit cards?" Well, they are a vehicle to bring people into debt. They are marketed to get people to spend a crap load at Kohl's, more than they can afford to pay for in cash. It's good for Kohl's, cause they get to sell a lot more clothes than they otherwise would and I'm sure they make money from the credit card program, too. If they are anything like Target and all those other big retail companies, they own the bank part of it too and make a huge profit off of people having these credit cards.
It's all good for Kohl's, but you know what? It's horrible for their customers. It tempts them into overspending and getting themselves into a mess. Yes, it's ultimately our responsibility to not spend ourselves broke, but come on, a business that tempts us to do it is just wrong. How could you sleep at night if you were tempting people to get themselves in financial trouble everyday. We all need to wake up and start helping people for a living instead of hurting them. Seriously. Kohl's, you better change this business strategy or I'm going to boycott your store completely, even though you are my favorite clothing store. I may even have to call your corporate office and complain about my experience yesterday. I sincerely hope that was just a rude salesperson and not your company strategy. What makes me think it is is because I heard the sales person behind me doing the same thing to their customers.
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29 Comments
- Fayed says:June 3, 2012 at 1:11 PM
My first few jobs were in retail. I HATED selling the credit cards and that was before I learned that credit cards are a huge wrecking ball to our finances. I worked for SAKS, Victoria Secrets and a couple others in my teens. Every company was the same, we all had our quota of credit cards that we were suppose to open. If we didn't get our X amount of cards a month then we were individually criticized in our reviews. I was always "in trouble" with the management because I continually failed in this area. I was never let go over the matter because I was a diligent employee in other areas. I remember around Christmas there would be incentives offered to the person who opened the most cards. The incentive would be something like a $25 gift card to the store. I doubt the system has changed much since I left retail 10 yrs ago. Its absurd, just as evil as those who sell HELOC in my opinion. We can't forget that with publicly traded companies its their responsibility to be as profitable as possible. Greed forces people to disregard the ramifications of their actions.
- Kraig @ Young Cheap Living says:June 3, 2012 at 1:18 PM
It really is sad that these big corporations are deciding at the top to push things like consumer credit cards at all costs. It costs employee happiness because they all hate doing it. It also hurts their customers, something that no company should ever do. We are in business to help our customers too, not just to make the owners/stockholders rich. Wow, what is this world coming to?
- Andrea @SoOverDebt says:June 3, 2012 at 1:11 PM
I absolutely HATE being harassed about getting store credit cards. It's fine if they ask, but when I say no they should drop it. And while some store clerks will let it go, a lot of them are like the girl you mentioned. I've noticed that I can get out of it faster if I say, "Sorry, but I have awful credit and I'll never be approved." That usually makes them feel awkward enough to shut up! =P Retail stores exist to make money and they don't seem to care how they get it. When I can find stores that don't offer branded credit cards, I try to visit them more than the ones that give me crap about signing up. Good post!
- Kraig @ Young Cheap Living says:June 3, 2012 at 1:15 PM
Yeah, it's just sickening. I think we should start a revolution to boycott these places until they get their act together.
- Fayed says:June 3, 2012 at 1:28 PM
One treacherous thing about every store out there offering a credit card is not only do you spend more per purchase you become disillusioned with how much debt you have! "Oh its just a couple hundred dollars" but if you carry that on 6 different cards it can sink you. What about Gas cards? People charge their gas because they NEED it to get to work but at $50 a tank their budget is quickly blown. Its sad the power a credit card has. My mom suffers from it. She has been through 2 bankruptcies and I am sadly watching her continue to live outside her means. I have spoken many times about how I live a different lifestyle financially but she disregards any advice I offer. I almost feel like its watching a loved one with a drug addiction ruin their life. I know paying her bills will not help unless she decides to change her behavior. I pray about it a lot. All I can really do is hope that one day to be financially secure enough that if she loses everything again I could offer a bed to sleep in and food to eat. For right now all I can do is love her and be an example of what living below your means looks like.
- Kraig @ Young Cheap Living says:June 3, 2012 at 1:31 PM
Wow, that hits pretty close to home for me too as I'm dealing with a lot of the same thing in my family.
- Fayed says:June 3, 2012 at 1:46 PM
Very sad. My mom has actually tried to argue with me at the grocery store when I pull out cash. She feels being "the mom" she should pay but I have to put my foot down about using the cash over her credit card. She tries to lie and say that she has the money to pay it but she isn't using a debit card. At times I let her win but other times I tell her "as long as you have debt, I am paying for this". It's crazy. We should not have to be a parent to them. She needs to grow up. As Dave says "kids do what feels good".
- Eric J. Nisall - DollarVersity says:June 3, 2012 at 8:10 PM
Actually, almost all of the stores that issue credit cards branded with their names are not seeing anything from the issuance of the cards directly. The stores do the marketing on behalf of the bank but don't get anything other than a referral fee. And, the banks do not benefit from people getting in over their heads with debt. Sure, there is a large amount of interest and penalty income that the banks report, but guess what? If the people cannot pay for their charges, the banks don't actually make anything off of the extension of credit. In many cases, like in bankruptcy, the debt is discharged and the banks has to write-off the transaction as an uncollectable receivable or "bad debt expense". The way the banks really make their money is from responsible people who use the cards often and pay the bill on time. That way, they collect the interchange (swipe) fee that they charge the retailer, PLUS they collect all of the money they fronted the consumer. The banks pay the retailer every time, regardless of whether or not the cardholder pays the bill, so if people continue to charge without paying, the banks lose more money. Credit is simply a tool. Just like a car or table saw. Do you blame the car dealer for selling a car to someone who misuses it and gets into accidents? Do you blame the hardware store that sells a power tool to someone who then goes and cuts their finger off or loses an eye due to their own negligence? Of course not. That is because people are supposed to follow the rules associated with the tools at their disposal. The price of their own negligence is their own fault, no one else's.
- Fayed says:June 3, 2012 at 11:11 PM
Eric, I appreciate how you pointed out other avenues of revenue through referral fees as well as swipe fees. Also I appreciate your opinion in regards to personal responsibility versus social responsibility. However, I know some companies do in fact make money from their in house credit card divisions. Target is an example. They posted credit card earnings of 6.1 billion for the first quarter of 2012. http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1696372&highlight=
- Eric J. Nisall - DollarVersity says:June 4, 2012 at 8:33 AM
That's why I said "almost" in that line :-) It is very rare for a store to bankroll their own credit card. That is where the co-branded term comes from--the fact that some sort of company puts their name on the card, but it is issued and maintained by a bank. There comes a time when a person has to swallow their pride, look in the mirror and say "I did this to myself, and I need to fix it" rather than pointing the finger at the store who issued the credit card, the bank that charged them late payment fees and interest, the people next door they are trying to keep up with, etc. And I'm not some silver spooner or holier-than thou always been well-of type looking down on the troubled either. I've been there before. I faced facts and made changes. I sacrificed and dug myself out of the hole I put myself in in the first place. It's that experience that makes me so frustrated with people and all of this type of talk.
- Kraig @ Young Cheap Living says:June 4, 2012 at 8:37 AM
I agree that we are all responsible for ourselves and need to both steer away from our own potential problems and/or climb ourselves out of the holes we put ourselves into. As a business, you also have a responsibility to not purposely hurt your customer, too. We can't just be okay with businesses being stupid when it's not okay for us to be stupid. We all have to knock it off.
- The Truth Hurts says:June 14, 2012 at 8:30 AM
Your first statement is incorrect. When I was first hired at Sears and taking the training, the statistics showed how the store made more money from customers who used the Sears cards than even from cash. Most of the branded cards have high interest rates. Sears starting rate is over 25%. The term "usury" comes to mind. I will not push the credit cards because I know how easy it is to get over your head with debt. True, it is not my fault if someone chooses to to abuse the "tool" (as you define it) to get into financial straights. But I know in my heart that offering easy credit to the public with no warning of the possible consequences are akin to offering cocaine. Someone is going to get into trouble and I will have facilitated it.
- Carrie Smith says:June 4, 2012 at 8:53 AM
Hmm...if Kohl's really is becoming like Best Buy then that's sad. I used to be a huge fan of Best Buy, but with the way they've become lately, it's just horrible. I like what you said about the clothing store selling clothes instead of being a bank. I think companies get so greedy and all they see with credit cards is dollar signs. I'm like you, in that I actually cost credit card companies money because I don't use them unwisely (if at all) like their more profitable customers do. The sales reps should realize this and understand that we aren't the ideal customers anyway.
- Kraig @ Young Cheap Living says:June 4, 2012 at 9:07 AM
Haha, yep. I honestly hope we all become smart so credit card companies have to go out of business. I'm over them.
- Peter says:June 4, 2012 at 4:21 PM
I get a lot of my clothes from Kohl's too, and I've had mixed experiences there. Sometimes they'll give you the hard sell, and do anything in their power to get you to sign up. Once I had an associate in the middle of the store ask me not once but twice to sign up for the card, not even at the register (I don't think she recognized me the second time). I've also had experiences at Kohl's where they ask me once and when I say no they take that for the answer and don't push. I understand why they do it, because it's a profit center for the store. I wonder how many people avoid the store because of it though. I know I avoid Best Buy these days for similar reasons - I don't like being hounded by salespeople. Amazon.com to the rescue. :)
- George says:June 4, 2012 at 5:45 PM
Honestly, I wouldn't even have that much of a problem with them pushing their credit cards if most of them didn't have RIDICULOUSLY high interest rates. A lot of these stores also offer perks with these cards that are completely invalidated once interest kicks in, but the consumer does have the ability to play with the system like any other rewards card. Socially irresponsible? Borderline, but it is ultimately up to the consumer to make an informed decision. If I like a store enough to want a card and the perks, I'll ask for a pamphlet and end up not applying anyway. I agree that they're a terrible idea, but the shakeweight is a horrible product too, and yet it sells enough to warrant a commercial.
- Brent Pittman says:June 13, 2012 at 4:22 PM
When I get asked about credit cards, I just tell them I don't use credit cards and I don't have debt. They just stare at me like I'm a zombie and stop asking. Sometimes we even get to engage in a conversation over bagging. I don't blame the workers, it's their job.
- Kraig @ Young Cheap Living says:June 13, 2012 at 4:29 PM
Great idea! I'm going to use that from now on.
- Nicky O. says:June 15, 2012 at 1:33 AM
Great article! I shop at Kohl's a lot, and like you I use my debit card. Thankfully I have never got the whole speech like you did, but I do get asked every time I check out, and I LOUDLY say (for the people behind me in earshot, holding their Kohl's credit card out like a chump), "I ONLY pay cash, and I live debt free." I have gotten dirty looks, but sorry! Kohl's entices their customers with discounts, however most of their credit card holders do not realize that they might get their discount now, but if they don't pay it off when they get the bill, they will actually be out MORE money. That is how Kohl's makes their money! It's not off me! I only shop there when they have coupons out for non-charge customers (which is surprisingly a lot). I pay, and I am done with it. NO BILL. Of course, there are those who are able to spend on their card and pay it off every month, but lets face it - most don't and Kohl's banks on that!
- JL says:June 18, 2012 at 5:15 PM
Not to be completely selfish, but if I'm always going to pay my monthly balance and having the card gets me discounts I otherwise could not get, isn't the card actually helpful to me? I also don't spend more just because I have the card.
- LifeInTransition says:June 19, 2012 at 2:55 PM
I personally don't mind if I get asked once at the check out counter since I know the sale associate is required. What I hate is when I'm at the check-out for much longer than needed because of pushy sales pitches.
- SBL says:September 2, 2012 at 9:04 AM
I have worked for Kohl's for several years, although I have failed to meet their credit quota time and time again. Like Fayed, I am an exempllary employee in every other way (and I show up on time), so I get to stay. We are trained to badger customers relentlessly, but few cashiers actually do unless a supervisor is hanging around. One night I had a boy of maybe 10 years old come in with $15 in rolled change. He explained that his mom had no money, so they broke their coin bank and had enough money for the credit card payment (minimum) and even had some left over!He was proud and clearly had no sense of the seriousness of his family's situation.It made me angry and ashamed.What happens NEXT month? It is an irresponsible and shamelessly greedy business tactic, but people buy into it again and again.
- Midwest4ME says:September 20, 2012 at 7:25 PM
I'm a Kohl's employee myself actually I work at POS. Trust me none of us in the store want to push credit like we are hounded to. The company policy is to take about three no's before we lay off. The latest program is a "Credit Blitz". We had 6-7 associates the other day on the floor running around pushing credit. Some customers were obviously annoyed and given how many people we had on the floor of course some of the same customers were being asked multiple times. Then you get to POS and once again you are asked again. This is FAR too agressive and Kohl's is the only company I've seen that pushes us that much for a credit card. I don't mind offering the card, in fact it's an excellent card to have. However I don't want to shove it down customers throats I'd rather offer it and take a yes or no answer. Kohl's think this is the best way to achieve a customer but I wonder how many customers we have lost due to such high pressure tacticts. Get this too my former store manager received a complaint on how pushy an associate was and later on she took that associate aside and thanked her for "doing her job. So any if you that says to complain to management that store manager if anything in some warped way is going to think the associate did a great job for being so pushy, even if they lost that customer. I can't blame management in a lot of ways corporate threatens the stores and get's on there butt if goals are met. Bottom like if you want results take those surveys at the bottom of the receipts and complain to Kohl's corporate, right to them, call them, email them. Complain to corporate not to the store. The company is highly based on customer service and I really do think if they hear enough complaints from customers on their high pressure credit card push they will back off on our goals and company policy of hounding a customer to death for a credit card.
- Sick of Credit says:April 14, 2013 at 9:31 AM
This is a bit late, but I've been looking for somewhere to vent. "I sincerely hope that was just a rude salesperson and not your company strategy." The whole problem with places like Kohl's is that they've based their entire business' profit-earning model off the notion that they can make big bucks off people who not only use their credit cards without paying them off in time but think they are "saving money" because they get to use a bunch of coupons on over-priced merchandise that has been "marked down"--aka is "on sale." For the average person who can't help but load their credit cards and can only see their "savings" that associates are required to point out at the end of each and every transaction, this strategy is simply deadly to their finances. As an associate, I see people who are in our store DAILY, and I watch them wondering how in the world they can even afford to keep coming back. Oh wait, I know: it's the credit card. Personally, I sincerely abhor associates, managers and supervisors who think it's okay to adopt this high-pressure sales tactic that everyone here is speaking of. It's ridiculous. Like some of the other commenters here, I too get pressured every day that I'm not making credit, and if I didn't need the job so bad right now I would have left a while back. Let me walk you through a typical (young) associate's experience at Kohl's when they get hired. First off, they're likely excited. It's probably one of their first jobs. They think Kohl's is a great place to shop, so it must be an awesome place to work--right, RIGHT? Next, for some unholy reason they've decided they wanted to be on POS, so they go through training (if management is doing their job) and are literally indoctrinated on the "benefits" of signing up for a Kohl's charge. None of the potential pitfalls are truly discussed. They are given very limited information, and if they are young they probably don't even have a clue how credit cards even work to begin with. So it's finally their first day, and somehow they've managed to get a customer to sign up for the Charge Card. They're excited! Managers are lauding them left and right for their most excellent "achievement." This gives them motivation to keep at it--all the while oblivious to the insidiousness of the entire concept behind selling the Charge Card. Well, after a few months of working there, I'm proud to say the scales of ignorance finally fell from my eyes. Since then, I've gotten considerably less people to sign up for Kohl's credit card; I highly suspect it's because I now loathe the thing and that seeps through every fiber of my bearing. It simply cannot be helped. You think you customers have it bad hearing these ridiculous sales pitches? Try working there. Throughout a typical work day, I am so kindly reminded through not one, not two, but THREE different methods about the Charge Card. First (and customers have no doubt heard these before) is the pleasant-sounding lady who makes periodic announcements about the benefits of signing up for the card. You would think that'd be enough, right? WRONG. At my store, we not only have that nice lady making announcements, but we also have these things called walkies feeding obnoxious soundbytes into our ears and an overly-ambitious store manager to further remind customers about the Kohl's Charge Card. It seems that every fifteen minutes we are being haggled with reminders to "keep getting credit!" on our walkies. And if the walkie and loudspeaker announcements weren't enough, our manager likes to jump on the phone and inject EXTRA loudspeaker announcements every fifteen to twenty minutes, loudly reminding customers why they should sign up for the Kohl's Charge. It's ridiculous. Furthermore, if you are not making credit as an associate, you become the subject of asinine jokery and are made to feel less valuable and appreciated than associates who are naturally good at soliciting credit. On top of that, if you were once great at credit and suddenly decided you no longer want to work on POS, management will pretty much shirk your pleas to be moved to another department--because all they see you as is a "credit-getter." Trust me. I've been trying for close to a year now. All they seem to care about is getting credit, and I suspect a big reason why is because both managers and associates don't get raises (and for us that's like cents per hour--BIG WHOOP) if they don't meet the company's dictated credit goals, in addition to getting berated from the big daddies up high who run the whole deal. THAT's why they push the Kohl's Charge Card so hard. They want to lecture us on ethics in the workplace, yet they can't even look at themselves in the mirror and see how their very business model and practices are unethical. Does that make it any more right to pressure their associates and customers the way they do? No, but at least now I understand why it happens.
- Anon says:June 9, 2013 at 5:58 PM
I work as a cashier at kohls and I absolutely hatttteee that I have to push credit.. If someone wanted a credit card they would ask. We get or hours based off how many credits we get each week:/
- Aaron says:June 22, 2014 at 9:32 AM
It's one of the job responsibilities. When I went on training, I realized the frequency of asking customers to sign up for cards. This is 3rd week working, and the managers put pressure on us when we don't meet their credit goals. None of us like it, but I guess if they don't push, Kohl's couldn't possibly have more than half of its customers using their credit cards.
- S.C. Baker says:December 19, 2015 at 8:09 PM
Really? So, if you don't want a credit card, just don't get one. You are kind of whiny. It's their job to ask you. Simple. Maybe you prefer they get public assistance. Kohls offer some great discounts and if you are a frequent shopper there, the card is worth your time. You have the ability to pay this card off right after your purchase with cash, a check, or a debit card. You never have to carry a balance or pay interest. If your financially irresponsible and simply tempted by having a card, I can understand not wanting one. Credit in a unfortunate part of being an adult. You have to have decent credit for a home, car, or other large purchases. Don't hate on the cashier for doing their job, say no I am not interested regardless of whatever savings it comes with. Most cashiers will move on. Getting on the internet and talking trash about people who are employed with ridiculous.
- LINDA C PATTON says:September 1, 2016 at 5:45 AM
I am a cashier at Target; and am pressured to "sell" the Target credit and debit cards. I have no problem reminding every "guest" (the Target word for customers) about the cards since that is part of my job. I do have a problem with management pressure to meet a quota for card applications. (In a recent discussion, my manager said I should be getting one application for every 150 transactions) The quota seems to slide all over the place - a few months ago I was told the quota was one card for every 250 transactions. Since I am way past retirement age, and am excellent at other aspects of the job, don't pay much attention to these comments. However, I do have empathy with younger cashiers who really need their jobs and feel threatened by the pressure. I question whether or not card application quotas are actually legal. Does anyone know? Can't seem to find anything on the web about it. I surmise there is a legal reason why we don't receive significant rewards for applications (a Starbucks drink, or a Target dog toy); so am wondering if it is legal to apply pressure for applications.
