Ignorant promoters still misguide consumers on store cards

It’s the third year in a row that I’ve conducted a survey on store card rates and charges and I have to say that every time I finish it I feel deflated. I come up with (almost) the same result i.e. that most store card promoters don’t have the first clue about the store card they are promoting.

Well, at least, they don’t know the basics when it comes to things like interest rates and charges – yet they are able to, with a quick stroke on the keyboard, sign me and anyone else with a ‘good’ credit record up to thousands of rands worth of credit without missing a beat.

This year I did the same mystery shop I’ve done since 2012. It goes like this: I walk into a store and ask who I need to speak to about opening a store card account. I usually I get ushered to the customer service department or someone behind the till offers to help and, in some instances, they boast that they can sign me up to store credit straight away.

But much to their dismay I curb their enthusiasm by asking them what interest and charges apply and generally the person doesn’t know the rate or gives me a thumb-sucked rate.

Rates and fees

This year in-store promoters from Exact!, Edgars and Truworths didn’t know what the rate on the interest bearing accounts were. Promoters from Identity, Jet, Woolworths, Markham, YDE, Foschini and Mr Price all gave me rates but I’m not sure if they are at all correct as when I called the call centres their operators all gave me different rates to the ones I got from in-store promoters (see table below).

So three out of 10 store card promoters did not know the interest rate on their store cards they are promoting. Meanwhile, all store promoters surveyed had answers that didn’t correspond with what their call centre agents said, when each were asked about interest rates.

What’s more is that call centres didn’t fare any better. Call centre operators from Jet, Edgars and The Foschini Group (TFG) which represent Exact! Foschini and Markham (among others), all didn’t know what the rate was. The TFG call centre agent explained though that the rate would be revealed to me once I got the pre-agreement form. So what would happen if I didn’t like the rate I got?

Meanwhile, Woolworths’ call centre agent and press office told me their rate was 22.65% but this didn’t correspond to what their client services operator told me, which was that the rate is 21.9%. When I asked about fees associated with the store accounts, the Woolworths client services person told me about a R175 admin fee while the call centre agent said that I could get charged R12, R22 or R24 in fees depending on what my credit score and loan approval amount ends up being.

I think it’s scary that store card promoters can land us into debt without first being able to open up our eyes to the fact that clothing companies can charge us up to 22.65% (the prescribed rate by the National Credit Regulator) in interest per annum on the outstanding amount on our interest bearing store cards. Many can also not reveal what other charges we’d be subject to.

More expensive than credit cards

At this rate, store cards are generally more expensive than a credit card. Yet it’s so easy to sign up for one and if you happen to have your ID book with you and proof of address store card promoters are willing to sign you up there and then. Of course credit checks are conducted, but if your credit score is fine it’s very easy to open an account. Hell, last year our researcher was able to access R45, 000 of store card credit in just one day. So, in my mind, these credit checks are rather pointless.

Most store card promoters do know (and are very keen to highlight) the benefits that come along with opening an account such as the fact that some six month accounts are interest free and that you get some discount vouchers on your next purchases. A six month hiatus on interest and discount vouchers are all fine and well, but when the interest kicks in it can be a big shock.

After year three of conducting this survey I’ve realised that highlighting the problem through conducting the exercise, writing about it and issuing a press release is simply not enough. It’s time to take more decisive action so that poor service like this doesn’t continue.

The store card survey highlights what we already know – that many store card promoters and call centre agents don’t know their products intimately enough or simply thumb suck rate and card charge information. The enthusiasm for signing you up for credit is there but this should rather be replaced with knowledge about the financial implications for the consumer and adequate training to convey that message with conviction and accuracy. A guess can be just as problematic as not knowing.

Struggling with debt

So why am I making such a fuss about store card promoters not knowing the interest rates and charges intimately? The reason is simple: we have a massive debt problem here in South Africa. Consumer are often ignorant about what they are charged and how interest can play a role in getting them further into debt.

A finger can be pointed at the consumer for not arming themselves with the knowledge they so desperately need before they get themselves into debt. But this exercise proves that even if a customer tried to find out the necessary information they would be left confused and misinformed. Companies that offer credit in any form have an obligation too. They need to, if asked, be able to offer accurate information. They should even go one step further and spell out that information in big bold letters. The phrases ‘terms and conditions apply’ and ‘the interest rate you get will be based on your credit score’ are just not good enough.

Forty five percent of South Africa’s credit active consumers are struggling with debt, and according to statistics released by the National Credit Regulator (NCR), the number of consumers with impaired record has increased by 343,000 from 9.60 million to 9.95 million. While consumers need to take responsibility for taking out debt in the first place I also strongly believe that companies that offer lines of credit have an obligation to inform customers exactly what they are in for.

In my mind store card promoters have no place in letting us have access to credit if they can’t give us the most basic financial information about the account. There has been a clampdown on the financial services industry and it has been criticised for its lack of transparency in the past. It’s time that retailers that offer store credit are made to follow the same rules.

This is why Moneybags will write to the marketing divisions/directors of every store retailer that we surveyed to highlight the importance of training their in store promoters and call centre agents adequately. Hopefully Moneybags can influence some positive change. Watch this space!

Moneybags’ 2014 store card survey results:

Store card part 1 edited

















Store card table part 2











Sources: V&A Waterfront, St Georges Mall, Golden Acre, Cape Town. Information correct as of 11 December 2014.

Moneybags’ other store card surveys and opinion pieces

See also:

How I racked up R45,000 worth of credit in one day

Store cards: The devil is in the detail

Clueless store card promoters thumb-suck rates

Clueless store card promoters still thumb-suck rates


star Surprise your loved ones with the Spur 4 Burgers 2 Go combo. Buy 4 burgers and 330ml of Coke served with chips and onion rings for only R275.

star Celebrate your birthday on top of Table Mountain. The Cableway offers you a free return ticket to one of the world's wonders to make your day extra special.

Drop by Folk Cafe for some thirst quenching special. Buy one and get one Cluver and Jack cider everyday between 2pm and 7pm.

star Drop by KFC for three pieces of chicken, one small pack of  chips and one regular coke at only R49.90.

These days, the word ‘surrogacy’ often tends to be attached to the name of someone famous like Kim Kardashian, Nicole Kidman or even Elton John. In addition to the process being glamourised we often hear that these surrogates are also being paid big money. But is this an accurate depiction of surrogacy?

For as long as women have been having babies, they have been having cravings. From ice cream to chalk and cheese. Many a pregnancy story has begun with a pregnant woman with a feverish craving and her nervous husband anxiously seeking the latest object of her desire – such as a bottle of pickles in the middle of the night.

Seasons are changing and with it the increased chances of snotty noses and chest infections. But some people believe that with a tiny prick you could avoid a trip to the doctor this season. There are however many misconceptions around the flu and its vaccine. As in any medical case, seeking trusted sources and facts behind common assumptions and practices is especially important. Let’s see if you have all your flu-facts straight with these myths and truths.

Breastfeeding is both beautiful and natural -  or so they say. However, it could also mean rock-hard painful breasts, leaking through breast pads and spraying milk as you’re trying to get your baby to latch. Especially if you’re one of those women who have a surplus of breast milk.