retail news in context, analysis with attitude

Published reports say that Kroger has decided to start charging a fee for cash back requested by customers at checkout.

According to a variety of stories, the fees are as follows:

• 50 cents for cash back under $99.99
• $1.50 for cash back between $100 and $150
• $3.50 for cash back between $150.01 and $2,000
• $6 for cash back between $2,001 and $9,999

Some reports said that Kroger would waive the fees to people who swipe their Kroger loyalty cards, but AL.com reports that Kroger said that this is inaccurate.

The new policy is said to be generating significant protest on social media.

One typical comment:

“Really @kroger ??? This is customer service and your saving a me trip to the ATM?? No favors here.. The trip will be to @GiantEagle from now on.”

And, Kroger’s response to such comments:

“We are sorry that you are dissatisfied about the fee applied when using our Cash Back program. With banks raising their ATM fees and other retailers are limiting the amount of cashback. We want to offer our customers a convenient, low cost, way to get their money. Thank you for your comments we will share your feedback with our Leadership Team. Have a great day!”
KC's View:
Kroger is going to take the heat for this, but it seems perfectly reasonable to blame the banks, who pretty much can be blamed for most problems for which we cannot assign blame to politicians, lawyers, insurance companies and cable providers.

But … I am sympathetic to consumers who are upset about this. Cash back at checkout is a major convenience to which people have become accustomed, and a lot of folks are going to be upset by this. At some level, I suppose that Kroger, faced with enormous competitive pressures, has to find ways to save money wherever and whenever it can. But the question is if it is taking a risk in making this move.

The other question, of course, is whether other retailers will follow suit. Which would give Kroger some cover, but wouldn’t necessarily do a lot of good for the industry’s image.

How many people decide to go to the store not just to shop, but because they can get cash back and skip a trip to the ATM? I’m not sure I’d be taking away reasons for people to go to the store.