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Shops are to be banned from offering discounts to customers in exchange for agreeing to take out a store card.
It follows talks with the Government which will also see a ban on direct commissions for sale staff who are trying to sign up customers. Shoppers with store cards will still be able to take advantage of offers, but only once they have been in possession of the card for a week. The director general of the British Retail Consortium, Stephen Robertson, said the idea was "common sense". The changes will come into force next year, however there will not be a cap on the interest rate shops can charge on the cards. Consumer minister Ed Davey said he was concerned that an interest rate limit may force people to use...Read more HERE
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A clampdown on store cards is finally on the way, almost six years after the Competition Commission ruled that the public is being ripped off to the tune of £55m a year. Rules were agreed this week to improve the way the cards are offered. The shakeup will mean retailers can no longer use the lure of instant discounts and free gifts to tempt shoppers into taking out their costly plastic. There will also be a ban on paying staff commission for promoting the cards. However, ministers angered some campaigners by rejecting calls for a cap on store card interest rates, even though many retailers charge close to 30% at a time when the base rate is stuck firmly at 0.5%. In March 2006, the Competition Commission concluded that store cardholders were paying too much because the interest rates were too high. It valued this "consumer detriment" at £55m a year "and possibly significantly more".
Since then, interest rates have come down in some cases – for example, Topshop's card now has a representative APR of 19.9% compared with 29.9% back then. But there are still many store cards that charge a lot more than this, including those offered by Argos, Burton, Dorothy Perkins, Homebase, Wallis and Warehouse, all of which have representative APRs of 29.9%. Consumer minister Ed Davey told MPs that the government would not be introducing a....Read more here on the latest---> Store cards rules set for shakeup | Money | The Guardian