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Walmart's effort to get customers to build up their savings accounts

theatlantic.com

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Re: Walmart's effort to get customers to build up their savings accounts

#11

Post by twblalock »

oconnore wrote: post #6
henryfjordan wrote: post #3

Earlier quoted context omitted.

So? The people targeted for this card are those who otherwise aren't saving anything. The same people would be subject to larger fees at a bank and get sub-1% rates on a savings account. They benefit from this program. Why should Walmart not see that hole in the market and exploit it? Isn't that what this community is all about?

Capital One 360 pays 0.20/0.75 APY (checking/savings respectively) with no fees or minimums (I'm sure others do too, I just happen to be a customer ^). So... they are not benefiting. They are losing out on interest and a real bank account, and Walmart is seducing them to stay with a lottery.

The article mentions that many people are unbanked because they fear overdraft fees, or have had to pay them before. This is a well known problem, and it drives people to use check cashing stores and debit cards like the one WalMart offers instead of banks.

Re: Walmart's effort to get customers to build up their savings accounts

#12

Post by LyndsySimon »

qntty wrote: post #9
jmvoodoo wrote: post #5

Earlier quoted context omitted.

That's how a win-win works. If Wal-Mart can make a profit by getting people to save money there's nothing wrong with that. Especially when compared to the banks that make significant money fining you for being broke.

Except that by giving walmart money that could be invested conservatively, you've actually losing money to inflation. True, this is exactly what most people do with their banks, but banks aren't win-win either, they're both businesses that offer these services because it makes them money.

> Except that by giving walmart money that could be invested conservatively

This isn't money that could be invested conservatively - this is money that might be needed tomorrow, or next week, or next month.

Re: Walmart's effort to get customers to build up their savings accounts

#13

Post by fefesafaea »

Kind of fucked up that the article doesn't mention the fees associated with these cards until like 3/4 of the way into the article.

These cards charge 5 bucks a month, plus like 3 dollars to deposit cash, 3 dollars to withdraw cash, in addition to the 5-10 dollars up front for the card itself.

Because of this, a person using this type of card can easily spend $100+ a year on fees. Not exactly a great way to save money, and hardly better than overdrafts.

If at all possible, people in this sort of situation would be much better served by joining a credit union. While there are some drawbacks in terms of hours and atm availability, many CU's do not charge overdrafts and also have some form of atm reimbursement. This, along with the ability to deposit checks by snapping a pic with your phone make them a viable, and preferable alternative. Sadly, they are not as prominent, nor well advertised as the sort of cards peddled by Wal-mart, et. al.

Re: Walmart's effort to get customers to build up their savings accounts

#14

Post by jmts »

_m8fo wrote: post #4

tricking people to save paltry sums of money meanwhile using the gains in interest to fund your company's most recent marketing campaign to trick people into buying more useless garbage they don't really need . what's wrong with this picture? in any case, i suppose this is good -- in the same way a slave owner providing food and shelter is good for the slave. you even have to pay to deposit and withdraw money.

A paltry sum of money is the first step to a reasonable sum of money. An interest in saving a paltry sum of money is arguably a useful skill for people earning paltry sums of money, as I'd hazard a guess that it should encourage them to spend less on useless garbage they don't really need. Gamifying this to the benefit of both parties is capitalism at work. Any comparison to slavery is beyond ridiculous.

Re: Walmart's effort to get customers to build up their savings accounts

#15

Post by twblalock »

_m8fo wrote: post #4

tricking people to save paltry sums of money meanwhile using the gains in interest to fund your company's most recent marketing campaign to trick people into buying more useless garbage they don't really need . what's wrong with this picture? in any case, i suppose this is good -- in the same way a slave owner providing food and shelter is good for the slave. you even have to pay to deposit and withdraw money.

I suppose you'd rather overthrow the consumerist system, but isn't that making the perfect the enemy of the good?

People who didn't have savings have some now, and they aren't all going to blow it at WalMart because they saw an advertisement. These people are better off than they were before, and I'm not going to oppose that just because I don't like WalMart.

Re: Walmart's effort to get customers to build up their savings accounts

#16

Post by Spooky23 »

qntty wrote: post #9
jmvoodoo wrote: post #5

Earlier quoted context omitted.

That's how a win-win works. If Wal-Mart can make a profit by getting people to save money there's nothing wrong with that. Especially when compared to the banks that make significant money fining you for being broke.

Except that by giving walmart money that could be invested conservatively, you've actually losing money to inflation. True, this is exactly what most people do with their banks, but banks aren't win-win either, they're both businesses that offer these services because it makes them money.

How do you expect the factory worker to start investing her Interest is a waste of time anyway these days. My credit union is paying 0.10% on savings accounts under $100k, and something like 0.25% over that amount. A "high yield" online only account might pay as high as 1%.

Re: Walmart's effort to get customers to build up their savings accounts

#17

Post by Spooky23 »

gumby wrote: post #8
henryfjordan wrote: post #3

Earlier quoted context omitted.

So? The people targeted for this card are those who otherwise aren't saving anything. The same people would be subject to larger fees at a bank and get sub-1% rates on a savings account. They benefit from this program. Why should Walmart not see that hole in the market and exploit it? Isn't that what this community is all about?

Yeah, I doubt it's much of a money maker for WM, even at WM's scale, as the transactions are so tiny. The bigger win is presumably that their customers might have some money to spend later on.

It's really just layaway without tying up a product. The customer benefits because the cash is safe. Walmart benefits from the goodwill and high probability of the money being spent with them.

Re: Walmart's effort to get customers to build up their savings accounts

#19

Post by flukus »

twblalock wrote: post #11
oconnore wrote: post #6

Earlier quoted context omitted.

Capital One 360 pays 0.20/0.75 APY (checking/savings respectively) with no fees or minimums (I'm sure others do too, I just happen to be a customer ^). So... they are not benefiting. They are losing out on interest and a real bank account, and Walmart is seducing them to stay with a lottery.

The article mentions that many people are unbanked because they fear overdraft fees, or have had to pay them before. This is a well known problem, and it drives people to use check cashing stores and debit cards like the one WalMart offers instead of banks.

They can't get debit cards from a bank? Even my mastercard is tied to a debit account.

Edit - from the comments below it sounds like the issue is caused by a fucked up banking system more than anything.

Re: Walmart's effort to get customers to build up their savings accounts

#20

Post by _m8fo »

jmts wrote: post #14
_m8fo wrote: post #4

tricking people to save paltry sums of money meanwhile using the gains in interest to fund your company's most recent marketing campaign to trick people into buying more useless garbage they don't really need . what's wrong with this picture? in any case, i suppose this is good -- in the same way a slave owner providing food and shelter is good for the slave. you even have to pay to deposit and withdraw money.

A paltry sum of money is the first step to a reasonable sum of money. An interest in saving a paltry sum of money is arguably a useful skill for people earning paltry sums of money, as I'd hazard a guess that it should encourage them to spend less on useless garbage they don't really need. Gamifying this to the benefit of both parties is capitalism at work. Any comparison to slavery is beyond ridiculous.

> Loretta Taylor, who lives in the southern-Illinois town of Mount Vernon, started using a Walmart MoneyCard when her local bank branch closed late last year, forcing her to drive 45 minutes to make a deposit. A registered nurse, she has lately been working as an in-home caregiver, and sometimes gets paid in cash, which she can put onto the card (for a $3 fee) at a nearby Walmart. “I’m not making much money right now,” she told me recently. But in early January she decided to put $23 in the card’s Vault—and won a $25 prize. Taylor has kept her traditional bank account, and she sounds slightly skeptical of Walmart’s motives. Still, she has continued to use the Vault; she had saved $75 when we talked in early February, including the $25 prize.

EDIT: updated comment

one is forced to drive over an hour all in all, or pay $3 (not even counting $1 to get the card, $5 a month fee on low balances and $2.50 to even take money out of the card) and have further dependence on megacorp.

original comment, for integrity (thanks to the child posts, ajdlinux and greeneggs):

   a 45 minute drive and the associated time and money wasted (not to mention car depreciation), on top of a $3 fee. oh, drove 45 minutes? might as well buy something, lest that time be wasted. oh, and you're going to have to drive 45 minutes back. all in all, an hour and a half wasted in addition to $3 (not even counting $1 to get the card, $5 a month fee on low balances and $2.50 to even take money out of the card) and further dependence on megacorp. if you read this and your first thought is: 'hey, most people aren't 45 minutes away from walmart', then my point is already lost on you.
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