Warehouse Club, a discount retail membership chain, has taken a cue from one of its competitors, Fedco Membership Stores, and begun accepting bank cards.
The regional chain, with to stores in Illinois, Michigan, Ohio, and Pennsylvania, is kicking off the holiday season with a $2 discount every purchase made with a Visa card.
The promotion ran from Nov. 18 through Monday and will run again from Dec. 13 to Dec. 19.
MasterCard International is negotiating its own promotion with the discounter.
Warehouse Club provides one-stop shopping for its nearly one million members, with merchandise ranging from groceries and furniture to electronics and exercise machines.
In the past consumers could pay by cash, check, or Discover card.
Barbara Segers, vice president of marketing for the Skokie, Illinois-based chain, said bank cards have been requested by members on a consistent basis. "We do exit interviews every six months," she said.
"This is something that comes out loud and clear that members want."
The discount chain racks up about $215 million in sales annually,
"Members have said they'd like to buy more high-ticket items from Warehouse, but they have to make those purchases elsewhere because they can't use their credit cards," said Ms. Segers. Accepting bank cards "will definitely boost sales," she said.
As the industry gets more competitive and customers require more payment options at the check out counter, price clubs are at a disadvantage by not accepting bank credit cards, said Armen Khachadourian, vice president of merchant relations for Visa U.S.A.
He said that the 20%-per-year growth in sales the clubs had been experiencing has slowed down to about 8% this year.
Fedco and Warehouse represent the smallest of five clubs throughout the United States. Visa is talking to BJ's of Boston and two national clubs, Price/ Costco and Sam's Club, owned by Wal-Mart Stores Inc.
First USA Inc. of Dallas will provide payment processing services for Warehouse Club.
The retail membership club market posts sales of about $36 billion each year.
Visa and MasterCard International have been actively seeking inroads for credit card acceptance at locations which rely on cash and check transactions, which still account for about 90% of the payment transactions in this country.
"In order to keep our members profitable, it's imperative we find more and more places [credit] cards can be used," said Mr. Khachadourian.
In the past three years, card purchases at supermarkets, a fastgrowing new segment of the card market, have increased tenfold, Mr. Khachadourian said, from $600 million in 1991 to $6.5 billion this year.
Government agencies. one of the last huge cash and check markets, are being infiltrated, with the Postal Service and the U.S. defense commissaries poised to accept cards in 1995.