Retailers respond to Moneybags’ store card mystery shop
The third annual Moneybags store card mystery shop has garnered responses from various retail store groups. While many claim their training is adequate Moneybags is still calling for more to be done so that customers are kept informed of interest rates and charges on store cards.
This month Moneybags again conducted its annual store card mystery shop to find out if in-store promoters and call centre agents knew what the interest rates and charges were that applied to the store cards that they were promoting.
This year the results weren’t very positive as only one store card promoter knew the exact rate that applied to the store card. We also found a number of inconsistencies with what in-store promoters knew and what call centre agents knew about these cards.
Moneybags has shown the results to the various affected groups to find out whether they thought their staff underwent adequate training considering the results of the survey.
*All but Truworths responded to our emails and calls but we will continue to try and get a statement from Truworths and will publish their comments as soon as we get them. For more about our mystery shop experience, click here.
In the meantime, this is what the other groups had to say:
What interest rate charges and fees apply to your store cards?
The Foschini Group (TFG): We have two account options: A six months interest free* account option (*provided that your account payments are up to date) as well as a 12 month interest bearing account option. The current interest rate that we charge is 22.65%. We do not charge any fees to open an account, nor are fees charged to join our loyalty programme (called Rewards & More). Account holders also have the opportunity to take out insurance products or to subscribe to our Club magazines, however these are totally optional.
Mr Price: Current rate 22.65% (previous rate was 22.1% until last repo rate change). No other charges apply to the card, other than voluntary value added products like insurance.
Edcon: In November 2012 ABSA and Edcon concluded an Asset Acquisition Agreement in terms of which the Edcon debtor’s book was purchased by ABSA. However, few accounts that were not sold to ABSA still remain in Edcon books. ABSA is currently the primary credit provider funder for new of accounts and as such owns the majority of accounts. Edcon is the Secondary Credit Provider, whereby accounts that were not approved by the Primary Credit Provider are reassessed by the Secondary Credit Provider (High Risk Customers). All new applicants have the option to apply for either a six month interest free account or a 12 month interest bearing account. On 12 month interest bearing accounts, ABSA or Edcon charges interest at a rate of 22.65% per annum or 1.89% per month. On six month interest free accounts, a penalty interest at a rate of 22.65% is charged should the account go into arrears.
Woolworths: It is a 12 month interest bearing account. And the interest rate on new accounts is currently 22.65%. There is no six months interest free option, however we do offer the benefit of: Up To 55 days interest free, as long as the account is paid in full on or before the due date, no interest will be charged. For example, many use their store card to make grocery purchases, so it makes sense to settle it in full monthly, without paying interest.
Will your company, in light of these findings, at all investigate the need for additional training of its store card promoters and call centre agents?
TFG: We do have a training programme for both our store and contact centre employees. In addition, the relevant information is readily available to all employees, should they need to check any of the facts. The mystery shopping showed that despite the training programme and available information, there are still gaps and these we will most definitely address with additional training and repetitive communication.
Mr Price: Given that we have in excess of 1,000 stores, training of store card promoters and call centre agents is an ongoing process.
Edcon: A successful applicant for credit at Edcon is provided with a pre-agreement quotation and statement which they must read and sign to accept the terms and conditions of the account. The pre-agreement contains the variable interest rate applicable to the account which is explained to an applicant before the account is activated in store. Current Interest rates as well as interest rate changes are communicated to all employees as well as customers as they occur, and are in line with prescribed legislative requirements. We will ensure refresher training is conducted on both the interest rate and the monthly Service fee to all our stores and call centre staff. We do conduct regular Mystery Caller tests within our operations and we will continue to test the applicable interest rate and fees applied to accounts, until we are confident that the training has effectively equipped our employees to respond to all related questions.
Woolworths: Buhle Goslar, Woolworths Financial Services’ head of product says: “We are pleased to note that the information you received from our contact centre was accurate. However we are extremely concerned about the erroneous feedback provided by our sales assistant. We will be engaging the store to address this issue. We value our customers. All our employees are provided the necessary information and training to serve customers. Further we have a range of steps in place, to ensure that our customers are fully informed, about our financial services products. To this end, beyond the initial contact, when a customer shows interest in a financial services product, they will:
- Be informed of the details of the proposed contract, stipulating the correct fees and applicable interest rate. This is done in print or telephonically, if the customer has called us to apply.
- Have the opportunity to withdraw from the contract without penalty for a set period
- Find the applicable interest rate and fees payable displayed on their monthly statement.”
Moneybags’ final say:
While it is encouraging that many retail groups conduct training it’s clear that more needs to be done to ensure that retailers impart with the correct information to the consumer. It’s the third time that Moneybags has conducted this store card mystery shop but little has changed in the way of store card promoter knowledge. Some don’t know what rates and charges apply to cards while others give a rate which is usually inaccurate.
We believe it’s high time that retailers publish their interest rates and charges for everyone to see on the walls of customer service departments in the stores. It’s not enough that retailers advertise the benefits of store cards such as discount vouchers and six months interest free. Consumers need to know all the facts before they take on such credit. Let’s hope that next year we see an improvement in promoter and call centre knowledge!