Las Vegas Smith’s shoppers ‘yelling’ over Visa change — VIDEO

Updated April 3, 2019 - 3:34 pm

Brian Galbrecht moved to Las Vegas about seven months ago and has since been a frequent Smith’s shopper.

He usually pays with his debit card, but he’ll occasionally use his Visa credit card at the grocery store. But starting Wednesday, Galbrecht and all other Smith’s shoppers no longer have that option.

Smith’s said the decision to no longer accept Visa credit cards was made to avoid excessive fees and keep prices low, but retail analysts say this move could turn customers away. Galbrecht said he’s now more inclined to visit other chains like Albertsons.

“It will affect me,” he said. My visits to Smith’s “will slow down. I won’t go as often.”

Impact on business

On March 1, Smith’s announced that it would no longer accept Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada, beginning Wednesday. The Salt Lake City-based division of The Kroger Co. will still accept all other forms of payment, including Visa debit cards.

According to Aubriana Martindale, the division corporate affairs manager for Smith’s, the company made this decision to “keep prices low for customers” as interchange and network fees from Visa and its partnering banks drive up food prices.

“Visa has been misusing its position with its excessive fees,” she said. “To keep prices low, we have to control costs.”

According to industry publication The Nilson Report, merchants paid about $64 billion in Visa and Mastercard credit and debit interchange fees last year, 77 percent more than in 2012.

Retail consultant Bill Bishop, co-founder of Chicago-based research firm Brick Meets Click, expects Smith’s will lose customers who depend exclusively on Visa.

“I think this is pretty bold,” he said. “It’s probably a relatively small payoff for what they’re trying to do.”

But Bishop said if shoppers do have an alternative credit card, switching payment methods will be much easier than switching supermarkets.

Doug Koontz, research director at data company Edge by Ascential, said Smith’s will likely feel a hit.

“Smith’s is likely assuming most shoppers will just use an alternative credit card or debit card, but for shoppers loyal to a specific credit card or rewards program, this could drive them to switch outlets altogether,” Koontz said through email. “For those that are forced to pay with cash, it will also decrease basket size.”

But there are still loyal customers in Las Vegas. Lina Juzenaite has been shopping at Smith’s for 20 years, and said she understands the company’s move to skirt Visa’s fees.

“I think it’s Visa’s problem, not Smith’s.” Juzenaite said. “I don’t think Smith’s going to lose business.”

Transition for customers

To keep customers in good favor, Smith’s is offering incentives such as double rewards points toward fuel purchases through May 21. It’s also working to make sure shoppers are aware by having employees discuss the change with customers when they enter and check out.

While signs warning shoppers of the change have been up at Smith’s locations for weeks, the decision still came as a surprise to some.

“I just heard about it last week. … I was shocked. Credit cards are supposed to be used all over,” said Las Vegas resident Luciel Piteo outside the Smith’s off Southern Highlands Parkway. “There were quite a few people yelling in there. They were upset, you can’t blame them. I think they should go back to using (Visa credit cards).”

For shoppers who do check out with only a Visa credit card on hand, Smith’s stores will hold their order long enough for the customer to get another form of payment and return.

“We want to help ease the transition for customers,” Martindale said. “We want to make sure they understand our decision because it was a tough one to make.”

‘Nobody wins’

A Visa spokesperson told the Review-Journal that Smith’s decision negatively impacts both companies.

“Our goal is to ensure that every cardholder can use their Visa card wherever they wish to shop. When consumer choice is limited, nobody wins,” Visa said in an email to the Review-Journal.

According to data from the U.S. Census Bureau, about 22 percent of all credit cards in the U.S. in 2012 were Visa. And not every American has enough access to credit to have more than one credit card, according to Nick Egelanian, founder and president of retail real estate consulting firm SiteWorks Retail.

“I’m sure Kroger has accounted that into this, but it’s very odd,” he said.

A long-term battle

Smith’s is the second Kroger banner to stop accepting Visa credit cards; California-based Food Co. Supermarkets made its policy change in August 2018.

Martindale said she couldn’t disclose what the fees are, but said Visa’s credit card fees are significantly higher than any other card accepted at Smith’s, and exceed its grocery store profit margins, which fall anywhere from 2 to 3 percent.

“It’s not a fair playing field,” she said. “We’re not able to keep accepting the fees charged by Visa while maintaining prices. … We’ll evaluate all partnerships to make sure they fit our business model.”

A Visa spokesperson told the Review-Journal that the company’s amenities — security and fraud protection, access to customers and ongoing technological innovations — add a certain level of costs to their services.

“We continue to work toward a resolution so our cardholders can use their preferred Visa credit cards at Foods Co. and Smith’s without Kroger-imposed restrictions,” Visa told the Review-Journal.

Bishop said credit card fees are a significant operating cost for supermarkets and are some of the fastest-growing internal expenses for retailers.

Kroger will “probably will continue to exert more and more pressure over (credit card) brands until they get some changes,” Bishop said. “This is a long-term battle.”

Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.

Local Videos
Property Brothers visit Michael’s in Las Vegas Valley
Twin brothers Jonathan and Drew Scott are the hosts of Property Brothers, the hit HGTV show where they help couples find fixer-uppers and transform them into dream homes. In 2018, the brothers collaborated with Michael's on their first custom framing program. Today they're releasing new frames into that collection that range from natural to bright looking. Jonathan and Drew discuss their brand and why frames was something they wanted to pursue. (Rachel Aston/Las Vegas Review-Journal)
I-15 traffic jam
A semitrailer stopped in the middle of Interstate 15 near Charleston Boulevard has slowed traffic in central Las Vegas Wednesday morning, April 17, 2019. (Mat Luschek/Las Vegas Review-Journal)
Rainy Tuesday
The Las Vegas Valley saw cooler temperatures and rain Tuesday afternoon. (Mat Luschek / Review-Journal)
Tiger Woods Bettor Collects
James Adducci bet $85k on Tiger Woods to win the Masters. He collected his $1.19M from William Hill sports bet in the SLS today. (Mat Luschek /Review-Journal)
Endangered frogs released at Springs Preserve
Dozens of endangered Relic Leopard Frogs were released at the Cotton Grove inside Springs Preserve in Las Vegas, Thursday, April 11, 2019
Vintage World War II aircraft arrive at Henderson Executive Airport
The Collings Foundation Wings of Freedom tour comes to Henderson Executive Airport with a B-17 Flying Fortress, B-24 Liberator, B-25 Mitchell, P-51 Mustang and a P-40 Warhawk. (Michael Quine/Las Vegas Review-Journal)
Honoring Pearl Harbor veteran
Ed Hall, a Pearl Harbor veteran in Las Vegas, is honored with Quilt of Valor during an event in a Las Vegas. (Erik Verduzo/Las Vegas Review-Journal)
UNLV Anthropology professors excavate Maya ruin site of Caracol, Belize for 36 years
The husband-and-wife team of UNLV anthropologists has spent several months a year at the remote site of Caracol in the jungles of Belize, excavating ruins and uncovering secrets from the region’s once-dominant civilization. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Things to remember when adopting a rabbit this Easter season
As Easter and spring time approach, some people may be tempted to adopt a rabbit for the holiday. But like adopting any animal, it is important to be responsible and know what a rabbit requires to be a happy, healthy pet. (Mat Luschek / Review-Journal)
Bike Giveaway in Las Vegas - Piero’s Italian Cuisine
Evan Glusman of Piero’s Italian Cuisine hosted a party in the restaurant’s parking lot to distribute over 150 bikes to local kids. (Al Mancini/Las Vegas Review-Journal)
New Charleston/I-15 ramp configuration
The new Interstate 15/ Charleston Boulevard ramp configuration was unveiled Tuesday morning. (Mick Akers/Las Vegas Review-Journal)
Northwest Vegas farm's abandoned pig problem
Someone abandoned a several hundred pound pig at Sharon Linsenbardt's farm. Her farm is a rescue for animals, but she doesn't have room or resources to take on another such creature, so she's asking the community for help. (Mat Luschek / Review-Journal)
Chalk Talk: Black Student Union
Students talk about the Black Student Union in the latest episode of Chalk Talk. (Angus Kelly and Amelia Pak-Harvey/ Las Vegas Review-Journal)
Individuals with Parkinson's participate in dance class
Pamela Lappen leads a dance class for individuals with Parkinson's Disease at the Nevada Ballet Theatre in Las Vegas, Thursday, March 28, 2019. Caroline Brehman/Review-Journal
Animal Foundation Preps Pups For Best In Show
The Las Vegas Animal Foundation is preparing its prime pups for their 16th annual Best in Show event, which takes place at the end of April. (Mat Luschek / Review-Journal)
Dog Yoga At Hydrant Club
The Hydrant Club in downtown Las Vegas, is a social club for dogs and their people. Recently the club started hosting dog yoga. (Mat Luschek/Review-Journal)
Butterflies At The Springs Preserve
The butterfly habitat is now open at the Springs Preserve. Learn about butterflies and take in the peaceful surroundings. (Mat Luschek / Review-Journal)
The Bellagio Conservatory's spring display has a Japanese theme
The Bellagio's conservatory is hosting around 65,000 flowers, to form a Japanese theme this spring. (Mat Luschek / Review-Journal)
Bonnie Springs closes (Caroline Brehman/Kimber Laux)
Bonnie Springs Ranch near Las Vegas officially closed its gates Sunday, March 17, 2019. (Las Vegas Review-Journal)
Honoring a fallen North Las Vegas Police officer at his namesake school
The 20th Annual Raul P. Elizondo Honor Day celebrates the fallen North Las Vegas Police officer's legacy at his namesake school. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Windy day in Las Vegas Valley
The Review-Journal's camera on the under-construction Las Vegas Stadium the was buffered by high winds on Wednesday, March 14, 2019. (Las Vegas Review-Journal)
March gloom falls on Las Vegas
After a rainy overnight, gloomy skies hover over Las Vegas Tuesday morning. (Mat Luschek/Review-Journal)
John Katsilometes gets his head shaved at St. Baldrick's
Las Vegas Review-Journal man-about-town columnist John Katsilometes gets his head shaved by former Las Vegas Mayor Oscar Goodman during St. Baldrick's Foundation shave-a-thon on the Brooklyn Bridge at New York-New York in Las Vegas Friday, March 8, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
The Blue Angels take flight over Las Vegas Strip
The Blue Angels’ U.S. Navy Flight Demonstration Squadron flew their signature Delta formation over a part of the Las Vegas Strip, McCarran International Airport and east Las Vegas and were scheduled to fly over Hoover Dam. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Gross World Records
A group of about 20 children gathered around a TV at Sahara West Library on Feb. 27 for a history lesson on the most disgusting world records.
Graduation for Renewing HOPE program
The Renewing HOPE program graduation for homeless who spend nine months in Catholic Charities program. Graduates are preparing to enter the workforce. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Car crashes into Starbucks near Las Vegas Strip
Lt. William Matchko of the Las Vegas Metropolitan Police gives details about a car crashing into a Starbucks at Sahara Avenue and Paradise Road, near the Las Vegas Strip, on Friday, March 1, 2019. (Jessica Terrones/Las Vegas Review-Journal)
Car crashed into PT’s Gold
A 60-year-old man who police believe was impaired drove into a PT’s Gold at Silverado Ranch and Decatur boulevards Thursday night, Metropolitan Police Department Lt. William Matchko said. The driver was hospitalized and is expected to survive. A man inside the bar was hit by debris but drove himself to the hospital, Matchko said. (Katelyn Newberg/ Las Vegas Review-Journal)
Driver crashes vehicle into PT’s tavern in south Las Vegas (part 1)
A driver suspected of impairment crashed a vehicle into the wall of a PT’s Gold tavern, at 4880 W. Silverado Ranch Blvd., in Las Vegas on Thursday, Feb. 28, 2019. (Katelyn Newberg/Las Vegas Review-Journal)
Driver crashes vehicle into PT’s tavern in south Las Vegas (pullout)
A driver suspected of impairment crashed a vehicle into the wall of a PT’s Gold tavern, at 4880 W. Silverado Ranch Blvd., in Las Vegas on Thursday, Feb. 28, 2019. (Katelyn Newberg/Las Vegas Review-Journal)
It is a rainy Valentine's Day in Las Vegas - Video
These scenes come from the Las Vegas Stadium LiveCam (Las Vegas Review-Journal)
Business Videos
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
Africa Love owner talks about his store in Las Vegas
Mara Diakhate, owner of Africa Love, gift and decor store, talks about his store in Las Vegas. (Bizuayehu Tesfaye/ Las Vegas Review-Journal) @bizutesfaye
Developer gets approval to build homes at Bonnie Springs
The Clark County Planning Commission has approved a plan to build 20 homes on the site of Bonnie Springs Ranch. (Michael Quine/Las Vegas Review-Journal)
TOP NEWS
Home Front Page Footer Listing