Retailers Object to Proposed Rule Requiring Customers to Show Income Data Before Opening Accounts
By Robin Sidel
In the December 7th edition of the WallStreet Jounal
Some big retailers are balking at federal proposals that would make it a lot tougher for them to dole out instant credit at the cash register.
The restrictions, if enacted by the Federal Reserve, would force retailers to gather more financial information from customers— including how much they earn— before giving them credit.
That would endanger at least some popular cash-register pitches,
which often echo one from apparel retailer Talbots Inc. to “get 15% off today’s purchase” by opening a charge-card account o
n the spot.
Macy’s Inc., Saks Inc., Best Buy Co. and other retailers are fighting the proposed rules, claiming customers wouldn’t be comfortable handing over a pay stub or tax document to a cashier in order to show they can pay their bills.
“Instant credit is important because it is another service that we can offer the customer that the customer considers to be valuable,” said Jim Sluzewski, a spokesman for Macy’s, which like the other retailers has lodged gripes with the Fed. In the third quarter, more than half of Macy’s sales were rung up on store-brand credit cards. Macy’s operates more than 850 department stores in 45 U.S. states.
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Source: The Wall Street Journal