Tuesday , September 18, 2018

Kroger’s California Boycott of Visa Credit Cards Begins as the Grocer Mulls a Possible Expansion

The boycott of Visa credit cards by The Kroger Co.’s Foods Co chain in central and northern California began Tuesday as planned, but the parent company still won’t say whether the boycott will be expanded to its many other units.

Citing what it calls high costs to accept Visa credit cards, Foods Co announced in late July that it would stop accepting them at 21 supermarkets and five gas stations in Sacramento, San Francisco, and some other locations beginning Aug. 14. A spokesperson for the Cincinnati-based parent company confirmed to Digital Transactions News by email Tuesday morning that the boycott is underway. The stores will continue to accept Visa debit cards.

Kroger executives signaled two weeks ago that the boycott could expand, but gave no details. Asked about that issue Tuesday, the spokesperson said only that it’s “to be decided.” Kroger, the nation’s largest stand-alone grocer, operates nearly 2,800 stores under such banners as Kroger, Ralphs, Fry’s, Fred Meyer, Roundy’s, and more than 20 others.

Visa Inc. issued a statement Tuesday saying it is “committed to working with Kroger to reach a reasonable solution so that Visa cardholders can resume using their credit cards at Foods Co in California. When consumer choice is limited, nobody wins. Over 46 million merchant locations worldwide accept Visa because it helps retailers grow sales, provides a fast and convenient checkout experience, and enhances security. Cardholders can still use their Visa debit and prepaid cards at Foods Co while we work toward a resolution.”

Kroger could be following the playbook of Walmart Inc.’s Canadian unit, which boycotted Visa credit cards in 2016 at a few stores in Thunder Bay, Ontario, in a dispute over acceptance costs. Walmart then expanded the boycott to 16 stores in Manitoba. The two sides reached an accord six months after the boycott began.

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