Businesses that provide a Store Card will now be expected to sign up and abide to a voluntary code which will be drawn up by the (BRC) British Retail Consortium and the Finance and Leasing Association (FLA).
Under the agreement, retailers won’t offer store card customers special discounts or promotions for the first seven days after taking out one of the cards. There will also be a ban on giving staff commission for promoting store cards and businesses are making a pledge on staff training.
Stephen Robertson, British Retail Consortium director general, said: “We know consumers value store cards as a route to convenient, short-term credit. There are nearly 13m store card accounts in the UK but credit limits are low and many customers pay off the balance each month.
“Introducing a week-long separation between taking out a store card and receiving discounts is a common sense compromise which will give people enhanced consumer protection with access to the benefits those cards provide.”
The move has been welcomed by the government. Mark Hoban, financial secretary to the Treasury, said:
“The public told us that consumers can be tempted into taking out a store card by being offered a discount at the till. We’ve listened to these concerns and have worked with industry to develop a strong package of measures in response.”
Addendum: I admit when I go shopping with my partner in high street stores such as Debenhams, I always get asked at the till if I want a store card and get a discount if I take one out. I always say no, and I applaud this measure of a seven day cooling off period.
If their were no discounts available initially, it would be interesting to know how many people would take up a store card. Store cards can be a benefit if managed properly and if completely paid off monthly, otherwise the discounts mean nothing to what you could pay in interest.