Walmart Canada To Stop Accepting Visa Cards This Summer

Walmart Canada raised eyebrows this weekend when the retail giant announced it will no longer accept Visa cards after failing to reach an agreement with Visa Canada over credit card fees. Walmart, which has more than 400 locations across Canada, will begin phasing out Visa cards on July 18th, 2016, starting with its stores in Thunder Bay, ON.

Read the full statement from Walmart Canada below regarding Visa credit card purchases:

Following an evaluation of credit card transaction fees in Canada and the rest of the world, we have concluded the fees applied to Visa credit card purchases remain unacceptably high. 

 

Walmart’s purpose is to save customers money so they can live better. We are committed first and foremost to this purpose, which requires us to keep costs as low as possible. 

 

To ensure we are taking care of our customers’ best interests and delivering on our promise of saving customers money, we constantly work to reduce our operating costs, including credit card fees. Unfortunately, Visa and Walmart have been unable to agree on an acceptable fee for Visa transactions. As a result we will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016.  This change will then be rolled out in phases across the country.

 

To keep prices low we continuously assess opportunities to lower our operating expenses. Walmart Canada pays over $100 million in fees to accept credit cards each and every year. Lowering costs such as these is necessary for us to be able to keep our prices low and continue saving our customers money. 

 

Customers will continue to be able to use other forms of payment including cash, Interac debit, MasterCard, Discover, and American Express. 

We sincerely regret any impact this will have on our customers who use Visa and remain optimistic that we will reach an agreement with Visa. 

With this announcement Walmart joins the likes of Costco and No Frills as major shopping chains that don’t accept Visa cards. It should be noted that Walmart, much like Costco and No Frills parent company Loblaws, all offer their own co-branded MasterCards.

Related: Costco and American Express officially part ways

This move could be seen as a way to steer more customers towards the Walmart Rewards MasterCard. It could also be seen as a negotiating tactic to get Visa to lower the fees it charges on credit card transactions.

With over a month before Walmart starts phasing out Visa cards at select stores, there’s still plenty of time for Visa to come back to the table with a better offer.

Visa Canada charges interchange fees between 0.98% and 2.45%, depending on the retailer, transaction volume, industry, and type of credit card. See the fee chart below:

Visa Canada interchange fees

In a terse statement issued on its corporate website, Visa Canada didn’t exactly take the high road:

We regret Walmart’s decision to no longer accept Visa at its Canadian stores and the negative impact their decision will have on loyal shoppers across Canada. Walmart made this business decision despite Visa offering one of the lowest rates available to any merchant in the country. We are disappointed that Walmart chose to put their own financial interests ahead of their own consumers’ choice. 

Final thoughts

It’s hard to sympathize with a company like Walmart that has been at the centre of controversy for decades over its labour practices and environmental record. But early consumer sentiment seems to favour Walmart over Visa – that this decision will hurt Visa more than Walmart because people are more loyal to their shopping centre than their credit card.

It will be interesting to see how this plays out over the next few months.

Has Walmart made the right move by dropping Visa over credit card fees? Or will this decision backfire and send loyal Visa cardholders to shop elsewhere?

 

Scotia Adds Grocery Rewards To Its Credit Card Lineup

I’ve said before that Scotiabank offers the best overall suite of credit cards on the market. This week Scotia teamed up with the Overwaitea Food Group to launch its first grocery rewards card with the introduction of the new Scotiabank More Rewards Visa card.

More Rewards is Overwaitea’s loyalty program which boasts over 3 million active members in B.C. and Alberta. The Scotiabank More Rewards Visa card will give customers the ability to earn up to 6x the More Rewards points on their everyday shopping purchases.

Scotiabank More Rewards Visa

Benefits of using the Scotiabank More Reward Visa card include; the ability to double-dip by showing your More Rewards loyalty card at partners to earn an additional 1 point per dollar spent – giving you a total of 7 points per dollar; quickly boosting your points through frequent in-store bonus points offered from the Overwaitea Food Group; no annual fee, no earning or redemptions caps, plus the ability to redeem points for travel, groceries, and merchandise.

How to earn points

Get 6 points per $1 on purchases at any participating More Rewards partner locations including:

  • Save-On-Foods
  • More Rewards Travel
  • Speedy Glass
  • Panago
  • Visit morerewards.ca for a full list of partners

Get 4 points per $1 on all other everyday purchases.

Here’s how your More Rewards points can add up with this card:

Based on an average spend of $2,500 per month:
6x at More Rewards partner locations4x on everyday purchases
$950 on groceries$400 on recurring bills
$200 on gas$790 on other expenses
$115 on travel
$45 on pizza
$1,310 = 7,860 points$1,190 = 4,760 points

Your monthly points total would come to 12,620 and your annual points total would reach 151,440, and that doesn’t even include frequent in-store bonus offers that can make your points grow exponentially.

How to redeem points

Points can be redeemed for groceries, flights, hotels, vacation packages, passes for tourist attractions, gift cards, plus hundreds of other products in housewares, electronics, fitness, camping equipment, kids toys, tools, and gift cards.

Using the above example of earning 151,440 points in one year you can redeem those points for over $600 in More Rewards travel gift cards (a 2% return on spending), a KitchenAid 5 qt stand mixer, or free groceries. Redeem for groceries using the “Free is always Free” offers (examples listed below):

Bread (750g): 1100 points
Potatoes (10lb bag): 1800 points
Eggs (Large Dozen): 1800 points
Butter (454g): 2800 points
Milk (4 Litres): 3100 points
Ground beef (500g): 3300 points

Customers can apply at:

All grocery stores accepting More Rewards; including:

  • Save-On-Foods
  • PriceSmart Foods
  • Overwaitea Foods
  • Cooper’s Foods
  • Urban Fare stores
  • Scotia branch locations, and online

Final thoughts

Grocery rewards remain popular among credit cards holders and so members of the More Rewards loyalty program should rejoice with the launch of the Scotiabank More Rewards Visa card, which will allow cardholders to boost their earnings with 6 points for every $1 spent at More Rewards locations. It’s unclear what the best value is for redeeming your points – but travel gift cards at a 2 percent return on spending looks very attractive. Plus, members who shop frequently at More Rewards locations will invariably find in-store bonus offers to add even more value to the program.

All-in-all, the no-fee Scotiabank More Rewards Visa card is worth a look for More Rewards members in western Canada who regularly shop at Overwaitea stores like Save-On-Foods and who like the ability to redeem their reward points for a variety of items, including free groceries. You can read more about this card and apply for it here.

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