Photo (cc) by Aranami
Department store workers don’t just push store credit cards on customers during checkout because the employees are asked or told to do so.
Some employees also earn monetary perks from stores each time they successfully encourage a customer to apply for a store credit card, Yahoo! Finance reports.
Two unidentified sales associates at Macy’s, for example, tell the publication of an incentive system that rewards workers with a coupon worth $2 to $5 off a future Macy’s purchase each time they process a new credit card application.
One of those sales associates, who asked not to be named because she is not allowed to speak about the policy publicly, explains:
“Every day we’re asked ‘how many credit [cards] did you open?’ Pushing credit cards often seems like our number one priority. …
“I know that if they apply it can hurt their credit but [managers] make you push it and push it.”
At Kohl’s, employees receive an extra $1 to $2 in their paycheck each time they process a credit card application, a former human resources manager who worked at Kohl’s for nine years tells Yahoo.
Macy’s and Kohl’s declined to comment for the story.
In our story “Should You Get a Store Credit Card?” Money Talks News founder Stacy Johnson explains that department store credit cards offer perks to cardholders too, like one-time or year-round discounts.
But unlike for store employees — some of whom Yahoo reports are rewarded even when an application is denied — there are drawbacks for cardholders.
As Stacy explains one risk:
“Why do you think these guys want you to carry their credit cards? So you’ll spend more money — including maybe money you don’t have.”
By far, the biggest negative associated with store cards are their interest rates, which can be as high as nearly 30 percent. “Don’t even think about one if you can’t pay it off,” Stacy says.
In addition, when you apply for a credit card, the store generally will do what is known as a “hard inquiry” into your credit, which can hurt your credit score,
What store credit cards do you use, if any? Let us know below or on our Facebook page.