Beginning April 3, shoppers at Smith’s Food & Drug Stores will have to pay for their purchases with something other than a Visa credit card.
The Kroger-owned stores announced that they will stop accepting Visa credit cards because of “excessive interchange and network fees that Visa and its issuing banks charge retailers.”
Smith's will continue to accept all other forms of payment, including Visa debit cards.
“Visa has been misusing its position and charging retailers excessive fees for a long time,” said Mike Schlotman, Kroger’s executive vice president and CFO, in a prepared statement. Visa's credit-card fees are “higher than any other credit brand that we accept,” he added.
According to Smith's, those fees “drive up food prices for all customers.”
“Grocery is a competitive business and our ability to keep prices low for our customers depends on controlling costs,” said Smith's president Kenny Kimball.
Smith’s operates 142 supermarkets in seven states — 55 in Utah; 45 in Nevada; 23 in New Mexico; seven in Wyoming; and four each in Idaho, Montana and Northern Arizona. Founded in Brigham City in 1911, the Utah company was acquired by Fred Meyer in 1997; Fred Meyer was, in turn, acquired by Kroger in 1999.
Smith’s will be the second Kroger-owned chain to stop accepting Visa credit cards. Foods Co. supermarkets in California stopped in August 2018.
In a statement to USA TODAY, Visa said retailers get “significant value” from its network and added: “It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute. We have put forward a number of solutions to allow our cardholders to continue using their preferred Visa credit cards at Foods Co. and Smith’s without Kroger-imposed restrictions, and we continue to work toward a resolution.”
