Allegations of Debit Steering Running Into Doubts
A California credit union's suspicions that some Los Angeles retailers have been steering consumers to use other payment cards for their purchases have been denied by some of the retailers and described as doubtful by the National Retail Federation.
Robert York, CEO of the 13,000-member, $108 million California Bear Credit Union in Los Angeles, had written an email on Nov. 18 to other California credit union CEOs reporting that some members and employees had reported difficulty using their CU-issued debit cards.
The email said some retailers appeared to want them to instead use cards issued from larger banks for their purchases.
York sent the email to see if any other CUs had seen the same thing and reported Monday that California Bear had received no positive responses.
Further, one of the retailers that had been named in his email, the Regal Entertainment Group, parent company of Regal Cinemas, flatly denied that it had been trying to influence debit card choice.
“Our policy is to accept any and all payment cards – regardless of issuer,” said David Ownby, chief financial officer at the Regal Entertainment Group.
He also denied the company had a policy about refusing debit cards based on their date of re-issuance, which the Cal Bear employees and members said had been the issue cited when their cards were refused.
“Remember that many of our employees are high school students and probably not in tune with card particulars. They simply swipe the card and wait for an accept/decline signal from our credit card processor,” Ownby said.
Craig Shearman, vice president of government relations for the National Retail Federation, declined to comment on the specifics of York's email, but pointed out that card economics made the allegations doubtful.
“Most consumers might have a number of different credit cards in their wallets or purses, but usually only one debit card,” he remarked. “So if a retailer was going to try to steer a transaction to a different card that would most likely be a credit card where the swipe fees are higher.”