Retail workers confess using the hard sell to pitch credit cards

a credit card being swiped into a machineRetail credit cards are a cash cow for the stores they represent, as well as for the banks that back them. But retailers' desire to boost profits by getting more consumers to sign up for and use their cards has resulted in some less-than-friendly selling tactics. In fact, the fine art of coaxing people to sign up for retail credit cards has become downright cutthroat.

A former Macy's clerk tells WalletPop he was expected to sign up 10 new applicants for the store credit card each month and a former saleswoman at the Limited recalls that if she didn't get three new sign-ups for the store credit card per shift, she was punished by being assigned less-desirable hours. A third retail employee, this one from a chain store, confessed to us that her manager went so far as to tell her to sign up customers for store credit cards without their knowledge.

With all these hard-sell efforts, it's no wonder customers often feel badgered, browbeaten and outright bullied if they decline to apply for a credit card when they make their purchase. "People should understand that stores make a lot of money on credit cards for two reasons," says Ed Mierzwinski, consumer program director for watchdog group U.S. PIRG. "First, they have higher interest rates, and second, because you're locked into using it at that store, you may buy things you wouldn't otherwise get."

The former salespeople who talked to WalletPop say they often played hardball to get people to sign up for the cards, while they in turn were under relentless pressure from their managers to sign up as many people as possible.

"It was constant pressure," says Kate Bamberg, a marketing professional in Cincinnati who worked at retail store The Limited after she graduated from college to supplement her entry-level job earnings. "If you weren't asking every customer if they wanted one, you'd be reprimanded."

Bamberg says she was instructed to tell customers to get the card for the discount, then pay it off and cancel it. In reality, though, it probably didn't happen that often, she admits, since the salespeople were also trained to try to get customers to spend more than they originally intended. "If someone was trying on a shirt, we were instructed to put a whole outfit in the dressing room and keep bringing them clothes, keep throwing things at them," Bamberg says.

Bamberg says she was also pressured to sign up for the card so she could run up hundreds of dollars in The Limited clothing, the unofficial store "uniform." The Limited did not respond to a request for comment from WalletPop.

Even those that avoid the siren song of a revolving balance get a raw deal. Opening and immediately closing a card is a double-whammy for your credit score. First it takes a hit from the credit inquiry, then it drops further after you close it, since that reduces the amount of your available credit.

Ken Goldman, a former employee at Macy's and a current business communications trainer in Jersey City, N.J., says he told customers regularly to sign up for a card to get the initial discount offered, then pay off and close the card. Since his retail location was close to Wall Street, though, he says he had a lot of customers who worked in finance and knew the damage this course of action would inflict on their credit. While Goldman says he was successful at getting enough customers to sign up for the new credit card to receive bonus "Macy's Money" for his efforts, the reward was one of diminishing returns. He recalls one manager telling him, "Your sales are good, but we want you to do more." Goldman calls the constantly increasing demands "very un-motivating." He eventually left the job.

A Macy's spokesman told WalletPop via email, "Goals for new account openings vary by department and store, as do incentives for associates."

Some former retail workers tell us they were coached in ways that are outright illegal. "One of my managers told us that when customers wrote checks and produced their driver's licenses for proof of ID, that we should note their driver's license number. In many states, they're the same as Social Security numbers," recalls JaLynn Hudnall, a consultant in the Atlanta suburbs who worked at a local chain store back in 2004 .

"Once the customer had left the store, the manager would fill out the credit application with the information from the customer's check. She figured, if they didn't want the card, they could cancel it once they got it in the mail," she says. While this was the most blatant of the high-pressure tactics Hudnall observed, she says the pressure on all the salesclerks to drum up new card applications was enormous. She and her fellow employees would even pool their own hard-earned money to buy a store gift card, which they would raffle off to customers willing to fill out a card application.

These high-pressure tactics leave consumers feeling harassed and humiliated. Kimberly Gauthier, a photographer based in Marysville, Wash., tells WalletPop about an overly aggressive cashier at a Banana Republic store she used to frequent. She'd already turned down the solicitation to sign up for the store card several times, she says, when the cashier asked loudly, "Are you afraid you won't get approved?"

Gauthier was stunned at the rudeness of the question, and responded that her credit was just fine. But the accusation stung, she says. "I felt like I had to explain myself and everyone was looking at me. I felt so small," Gauthier says. "Plus, as a black woman, I was insulted because of the stereotype that black people have bad credit."

Gauthier called the store once she got home and told the manager how she'd been treated in front of other customers. While the manager was apologetic and offered Gauthier a gift card (which she declined), the experience was an eye-opener into just how aggressive retail credit sales tactics can be. Gap Inc., the parent company of Banana Republic, did not respond to a request for comment.

While unpleasant experiences like this can leave a bad taste in your mouth, those retail credit cards can do even more damage to your bank account than your psyche, warns Josh Frank, senior researcher at the Center for Responsible Lending.

"There are two reasons people might want to be careful about opening these cards," he told WalletPop. For starters, the interest rate can be on the order of 25%, even if you have great credit. In addition, Frank says, "For a lot of people, it ends up being a temptation." And if you spend more then you ordinarily would just because you have the card, or because the store sends you discounts or coupons, that can put you on the path to financial trouble. If you want a store credit card, don't be pressured into opening it on the spot. Go home and think about it, and do some research into the terms and conditions before you commit. Your financial stability is worth a lot more than 15% off a pair of jeans or a T-shirt.

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