You want to strike a better deal with a vendor for your organization.
You seek to reduce the expense that your company incurs in order to do business with them — especially since it’s difficult to see a great deal of competitive differentiation between what you’re receiving from them, as opposed to what others in the same space are providing.
They hold firm. They won’t negotiate their rates — for they realize that if they cave in and give you a better price, then YOUR competition will start demanding the same rates.
So…what do you do?
- What if you just dropped the service that they provide — and FORCED your customers to use their competitors?
- And, what if that step inconvenienced your customers? Would you go ahead and do it anyway?
Walmart wants Visa to give it better rates. They say, according to the Wall St. Journal, that they are “taking a stand for our customers because Visa’s high fees can result in increased prices,” according to spokesperson Alex Roberton.
Implied in the Walmart stand is also this point: Is there really that much difference between using your Visa and charging what you’ve purchased to your MasterCard?
- Walmart is dipping it’s organizational toe into the lake of banning the use of Visa cards at their stores in Canada.
Right now in Thunder Bay, Canada’s three stores, Visa is no longer accepted. Soon, that policy may be in place at all 405 Canadian Walmarts — and it could possibly be adopted in the United States, although the U.S. stores operate on a different agreement with Visa.
“It’s an escalation. They want to see what the consumer does and they want to see what Visa does,” said Dave Marcotte, a senior vice president at Kantar Retail, a research and consulting firm.
A unique challenge is that polling quoted in the Journal article states, “almost half of Wal-Mart shoppers surveyed who use Visa said they are less likely to shop there if the card is banned.”
“I think Wal-Mart just lost a couple of thousands of dollars a month from one family,” said Rebecca Zajac, who uses her Visa card from Royal Bank of Canada each week when she shops at one of the Thunder Bay stores, according to the article from Sarah Nassauer and Robin Sidel.
Visa is now running ads featuring the stores in the Thunder Bay area where their card is still accepted — especially focusing upon small, local businesses who compete with the global retailing giant.
- At the end of the day, Walmart is inconveniencing their customers in order to lower expenses.
Whether that turns out to be a minor annoyance — or something that customers find to be a disturbance that is significant enough to take their business elsewhere — remains to be seen.
If YOU were making the decision for Walmart…what would YOU do?