Woolies Place Limits on Visa and Mastercard Debit Cards

[Deactivated] on 27/04/2010 - 17:44
Last edited 27/04/2010 - 17:45

Not sure what it means maybe some here might know.

From Infochoice

Shoppers can no longer choose to press the credit button at Woolworths supermarkets, if they are paying with a Visa or Mastercard debit card. From yesterday, shoppers are only presented with a choice of savings or cheque buttons at point of sale eftpos terminals in Woolworths stores.

The new system will save the chain from paying interchange to the big schemes. Woolworths says the savings will translate into cheaper prices. The company will roll the changes out across all retail outlets in the Woolworths group over the next few months.

http://www.infochoice.com.au/banking/credit-card/news/no-eft…

General Discussion

Comments

  • neil on 27/04/2010 - 18:37

    Yeah, Saw the signs in Woolworths today. Seems common sense though, what would be the advantage of using credit vs. savings/cheque for a debit card. If you don't have money in the account, the transaction won't go through for either and money is taken away immediately from the account using all of the buttons.

    P.S. Wow, that link has a lot of numbers in it.

    • slowmo on 27/04/2010 - 22:15

      lotto inspiration :D :D

    • ESEMCE on 28/04/2010 - 07:26
      +1

      The advantage is that it goes through without a transaction charge to the customer. I can use my card 1 million times on Credit and have no charge recorded against me for any of those transactions, but as soon as I go over 6 EFTPOS transactions in a month, I get hit with a bank fee.. Dunno what it is cause I've never done it.
      I intend to continue not doing it, cause I'll not shop at Woolies (not that I did much anyway, or Coles for that matter. Both of them rape this country! and the companies who produce for them. I try to stick with the local guys..)

  • Kranbone on 27/04/2010 - 21:20

    Credit cards are good in the sense that if you see a sale but don't have the cash, it's an option so you don't miss out. It's good though that there is a type of control measure in place to limit debt, sort of.

    • neil on 27/04/2010 - 21:31

      Right but if you use the Credit button using a debit card AND you have no money in the account, the transaction won't go through(I think).

      • slowmo on 27/04/2010 - 22:18

        probably thats whats costing extra money… because its a rejected transaction for a non-credit card via the credit card network.

        but thats speculation…

      • ESEMCE on 28/04/2010 - 07:27

        Correct Neil..
        Debit cards take money from your account.. They just use the Credit Card infrastructure, rather than the EFTPOS infrastructure to do so.

        and Slowmo, it's the costs associated with transacting through Visa/Mastercard infrastructure that is the reason for this, not overdrawn/rejected transactions.

  • AntMan76 on 27/04/2010 - 22:06

    Here is the official explanation.

    http://www.woolworths.com.au/wps/wcm/connect/website/woolwor…

    You can continue to use the cards, just that you select cheque or savings instead of credit. They make it sound simple, but as I don't have a debit mastercard or visa I don't know if it's bad for customers. Woolies seems to think it isn't.

    • slowmo on 27/04/2010 - 22:20

      i think it's simple, if CR button doesnt work, then try SAV or CHQ. nothing to it.. :)

      it might take longer for some people to adapt to new way of doing things, but this is just another button next to the one that you are used to pressing. :)

    • [Deactivated] on 27/04/2010 - 22:24

      Thanks antman - that seems to make sense - looks like there are two gateways by which a debit card can get processed, and from what Woolies are saying is that the credit gateway is more expensive for them, and as both do the same thing they are making people use the cheaper of these for them.

      • ESEMCE on 28/04/2010 - 07:34
        +1

        That sums it up..
        Woolies are now treating their customers like they treat their suppliers.. Push all the costs onto them, therefore more profit!

        Note that the costs associated with processing a regular Credit Card are the same as those for Debit cards, but they're not being "banned".
        If this were a legitimate cost saving exercise, all Credit transactions would be banned in Woolies.

    • Lacerta on 27/04/2010 - 22:45
      +1

      It is bad for some customers.

      Using a debit card:
      Transaction fee if I press the "credit" button: $0.00
      Transaction fee if I press the "savings" button: $0.50

      Looks like I'll be shopping at Coles until they inevitably follow suit.

      • neil on 27/04/2010 - 22:59

        Really? Which bank are you with?

        So, I'm guessing that the banks make more/lose less utilising the visa/mastercard credit network than using their own savings/cheque network. In turn, retailers lose more by using the visa/mc network rather than chq/savings.

        • ESEMCE on 28/04/2010 - 07:29

          All of them…

          • leiiv on 29/04/2010 - 17:13

            @ESEMCE: I always choose savings button, and I use cb mastercard debit, and so far there in no charge or whatsoever, and as far as I know, there is no benefit for me of using the one over another.

      • ESEMCE on 28/04/2010 - 07:41

        Or shop with IGA/Foodland/Foodworks.. Dunno what they're like interstate, but in SA, many Foodland/IGA stores are on par in size and ahead in selection compared to Coles/Woolies.

      • zhenjie on 28/04/2010 - 12:25
        -1

        I'll still shop at Safeway. $.50 is nothing if you find an item saving you more at Safeway then coles.

  • Jabba the Hutt on 27/04/2010 - 23:48

    Would you guys believe me if I told you there's a 1000-posts-and-counting discussion about this on Whirlpool? Lord help us if those folks show up here :)

  • jason101 on 28/04/2010 - 08:36

    I run a small business and nothing annoys me more than when a customer selects CREDIT to pay via their skanky credit union visa or master card debit card, costing me the shop owner a % of the sale in bank fees, when the customer could have simply selected SAV / CHQ and saved me the expense. The result is prices have to be marginally higher to compensate for all the bank fees paid - either way the customer loses.

    • ESEMCE on 28/04/2010 - 09:25

      I agree, personally I try to pay by cash in small businesses.

      Surely it annoys you just as much when a real Credit Card is swiped though?
      Fees are the same for Credit or Debit Cards… or so I understand.

    • [Deactivated] on 28/04/2010 - 14:30
      +1

      **I run a small business and nothing annoys me more than when a customer selects CREDIT to pay via their skanky credit union visa or master card debit card, costing me the shop owner a % of the sale in bank fees***

      Nothing annoys me more when I pay cash always and never get a discount as well as being held up by people swiping, pinning and waiting for the transaction to go through.

      If you think you save money with a card , 55days, or get points you are lying to yourself

    • leiiv on 29/04/2010 - 17:15

      That's why small shops usually charge a fee for credit card transactions? no?

  • [Deactivated] on 28/04/2010 - 09:42

    I am not sure, I did read many of the whirlpool comments, which is rather hard as they are such an emotional bunch, and nothing many say is clear.

    It seems like the real issue for some will be the type of account they hold with an institution.

    If they have one which has a limit on the number of EPTPOS transactions before being charged a fee then this will affect them.

    If there is no fee or limit on the EFTPOS transaction then it will have no effect. Guess you will need to look at your bank T&C's on fees.

    Another minor impact might be the EFTPOS daily limit which means that your spend at Woolies, will limit your ability to withdraw funds from you account that day. Again an impact if your funds limit is low.

    In the Telegraph article that scubacoles mentions they have this interesting point….

    Of 113 transaction accounts with scheme debit monitored by RateCity, 69 have a fee for pressing savings while only 28 charge for credit….

    So again it will depend on the account you have

    I found this comparison pdf at ratecity. In summary many of the free of monthly fees will have EFTPOS fees or limits vs the one up monthly fee accounts which have free EFTPOS.

    Click here if you want to download the pdf -> http://www.ratecity.com.au/images/pdf/ratecity_deposit_accou…

    The whingepool discussions start here

    http://forums.whirlpool.net.au/forum-replies.cfm?t=1415769

  • sparkles on 28/04/2010 - 16:53
    +1

    Whenever I shop in big stores I always press credit. I figure they are most likely rorting me, so I'll rort them a little back. But whenever I shop in little stores I always press savings.

    Although I hate the idea of choice being taken away, on the other hand it's fair enough from Woolworths. Since all the Visa debit cards come in their fees must have skyrocketed and this is their obvious reaction. It was bound to happen sooner or later.

  • pais on 28/04/2010 - 22:24

    I'm not really aware of banks that charge for EFT transactions. I'd recommend you double check them as they don't fall under regular ATM transaction fees; for me, it's free.

    There are a couple of reasons for this that aren't addressed in this thread:

    1. Protection. Woolworths (and I'm sure many other large retailers) lose millions of dollars per year in fraudulent transactions. Some are obviously prevented at the point of sale, others… not so much. The banks, nor the customer, get stuck footing the bill of a fraudulent purchase - the retailer does if they cannot provide evidence that they believed the purchase was legitimate (i.e. credit signed slips are kept for years in case of a dispute). If they can prove they weren't at fault, the bank or the customer gets the bill. If they can't prove that they weren't at fault (because the checkout chick didn't check the signature was accurate, the numbers lined up to the card, card was real, etc.), then they're stuck with the bill.

    2. It provides an incentive for "everyday rewards". The fact that you can't use your rewards scheme with a visa debit (if you've got one) means you don't accrue the points, so you're more likely to pickup one of their rewards cards.

    At the end of the day, a lot more retailers will start doing this - primarily because of the first reason. Literally, it will save them millions per year. Not shopping somewhere because you don't care enough to know your PIN number is a little dramatized!

  • slowmo on 29/04/2010 - 03:27

    i always thought that debit cards are the 'workaround' for people who want to use EFTPOS minus the keycard/ATM fees.

    am surprised why people are saying its going to cost them..

  • JordanM on 29/04/2010 - 16:56

    I have NAB classic banking with Visa Debit, it doesn't have a monthly fee and has unlimited Savings/Credit.

    I used the credit button the other day in Woolworth's self serve and it processed fine.

    • AntMan76 on 29/04/2010 - 19:36

      The change is being rolled out progressively across all stores. Sooner or later it won't work for you.

Login or Join to leave a comment
Login Join