I haven't shopped at Sam's Club in a few years, but I definitely remember those moments in law school when I would have a basket full of frozen chicken breasts, green bean cans, and peanut butter and freeze, wondering "Do I have my checkbook?" I always seemed to forget until it was too late that Sam's only took cash, checks and Discover card. Once debit cards became the norm, I never worried, but I may have had some aborted trips where I remembered too late that I did not have sufficient cash on hand to do the "big shop" I was planning.
Not any more. The WSJ is reporting that Sam's has made a deal with MasterCard that will allow customers to use those credit cards. Sam's has always said that not allowing credit cards kept prices down for all "club members," but I'm sure there was some lost revenue on the margins as folks had to keep their total bills less than their checking account balances (amazing!). Sam's does sell items that many people put on their credit cards -- computers, electronics, etc.
Of course now I would just freeze in the Sam's with my cart of chicken breasts, etc. and wonder "Is my [Bank Name] credit card a MasterCard or a Visa?"
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1. Posted by Cards'R'Us on November 10, 2006 @ 11:32 | Permalink
The fact that you don't distinguish between MasterCard and Visa, which combine for the bulk fo the credit card market (72% in terms of purchase volume and 83% in total outstandings) shows just how warped competition (or lack thereof) is in the credit card industry. Of course, there is also a 90% overlap banks that issue Mastercard and Visa brand cards.
The real question is not why Sam's Club is only taking MasterCard, but why it isn't accepting all brands of cards and then just pricing according to the costs of taking that particular brand of card. (Hint: because of card network rules that forbid surcharging).
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