Stacie Scott, Deseret News
Smith's employee Tony Tackett pulls away the 432 gallons of milk that will be donated to the Utah Food Bank to kick off the "Pour It Forward" campaign at the 876 800 S store in Salt Lake City on Tuesday, Sept. 8, 2015. Smith's Food and Drug stores will participate in the campaign through September in honor of Hunger Action Month.

SALT LAKE CITY — Smith's is changing its policy on Visa credit cards.

What happened: Kroger Co. announced Friday that all of its Smith's Food & Drug stores division will stop accepting all Visa credit cards as a form of payment.

The change will go into effect on April 3.

  • Smith's will continue to accept all other forms of payments, including Visa debit cards.
  • The company said "excessive interchange and network fees that Visa and its issuing banks charge retailers drive up food prices for all customers," according to a press release.
  • Visa's fees are the highest of any credit cards Smith's currently accepts.
  • "Visa has been misusing its position and charging retailers excessive fees for a long time," said Mike Schlotman, Kroger's executive vice president and CFO. "They conceal from customers what Visa and its banks charge retailers to accept Visa credit cards. At Smith's, Visa's credit card fees are higher than any other credit card brand that we accept. Visa's excessive fees and unfairness cannot continue to go unchecked. That's why, starting April 3, Smith's will accept all forms of payment except Visa credit cards."

Visa sent a statement to the Deseret News about Kroger's decision:

  • “Cardholders are Visa’s first priority. Our goal is to ensure that every cardholder can use their Visa card wherever they wish to shop. When consumer choice is limited nobody wins.
  • “The Visa network delivers significant value for merchants including access to more customers, increased sales, security and fraud protection, a quick and convenient checkout experience, and ongoing innovation and implementation of the latest technologies. Kroger enjoys all of these benefits, and there is a cost for these services, like any other.
  • “It is unfair and disappointing that Kroger is putting shoppers in the middle of a business dispute. We have put forward a number of solutions to allow our cardholders to continue using their preferred Visa credit cards at Foods Co. and Smith’s without Kroger-imposed restrictions, and we continue to work toward a resolution. Visa debit and prepaid cards continue to be accepted across all Kroger Stores, including Foods Co. and Smith’s.”
38 comments on this story

Bigger picture: The decision will impact 142 supermarket stores and 108 gas centers in Utah, Idaho, Nevada, Wyoming, Montana, New Mexico and Arizona, USA Today reports.

Kroger is still deciding whether to lower credit card transaction fees at other stores, Business Insider reports.

Flashback: Kroger previously banned Visa credit cards in August at its stores in California to save on fees paid to Visa, according to USA Today.

By the numbers: The swipe fees for using credit cards can range between 1 and 3 percent, which adds up to $90 billion retailers pay every year for you to use them, according to Bloomberg.