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Smith’s Food & Drug to stop accepting Visa credit cards starting April 3

Posted at 7:36 AM, Mar 01, 2019
and last updated 2019-03-01 19:17:34-05

SALT LAKE CITY -- Smith's Food & Drug will stop accepting Visa credit cards effective April 3, 2019.

Kroger, the grocery chain's parent company, made the announcement Friday in a press release.

Kroger said the Smith's stores will be the company's second banner to stop accepting Visa credit cards, but will continue to accept Visa debit cards.

Kroger cites excessive interchange and network fees on the part of Visa and its issuing banks.

"Visa has been misusing its position and charging retailers excessive fees for a long time," stated Mike Schlotman, Kroger's executive vice president and CFO. "They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith's, Visa's credit card fees are higher than any other credit card brand that we accept. Visa's excessive fees and unfairness cannot continue to go unchecked. That's why, starting April 3, Smith's will accept all forms of payment except Visa credit cards."

Foods Co. Supermarkets, another Kroger banner operating in California, stopped accepting Visa credit cards in August of 2018. The ban on Visa credit cards currently only affects Foods Co. Supermarkets and Smith's Food & Drug.

"Smith's stores will continue to accept all other forms of payment, including major credit cards such as Mastercard, Discover, and American Express; cash and checks; electronic benefit transfer cards from SNAP and WIC programs; and MasterCard and Visa debit cards both with and without PIN and health savings account cards," the press release states.

Smith's operates 55 stores in Utah, 45 in Nevada, 23 in New Mexico, 7 in wyoming and 4 each in Idaho, Montana and northern Arizona, the press release states.

A Visa spokesperson issued this statement to Fox 13 News:

“Cardholders are Visa’s first priority. 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.

“The Visa network delivers significant value for merchants including access to more customers, increased sales, security and fraud protection, a quick and convenient checkout experience, and ongoing innovation and implementation of the latest technologies. Kroger enjoys all of these benefits, and there is a cost for these services, like any other.

“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. Visa debit and prepaid cards continue to be accepted across all Kroger Stores, including Foods Co. and Smith’s."