Ikea to charge for using credit cards

Anil Dawar|Daily Mail13 April 2012

FURNITURE group IKEA is to charge its British customers 70p extra whenever they use a credit card.

The Swedish no-frills store group wants to recoup some of the fees charged to it by the card companies.

However, fears that other big retailers would quickly follow have proved groundless.

MFI, Marks & Spencer, Allders and John Lewis were among those who said they had no plans to bring in a surcharge.

Ikea's move - which will be imposed on only its UK customers - has left the firm isolated while customers are warning that the surcharge might stop them visiting its stores.

'The plan to bring in these charges is going ahead,' insisted Ikea spokesman Yvonne Booth.

'None of what anyone else has said is going to change that. We have set out what we want to do and we are going to stick to that.

'We can divert the money we don't pay to the credit card companies back into improving goods and prices,' she added.

Credit card companies make around £750m a year from retailers. Every transaction is subjected to a charge of between 0.8% and 2.5%. The size of the charge often depends on the size of the company involved and the amount of discount they can negotiate.

The flat-pack furniture retailer has a very strong foothold in the UK - its second-largest market - with an annual turnover here of £800m.

It said it pays around £3.5m a year to process credit card transactions in Britain.

Other big stores insisted they would continue to bear the cost of the fees. Some said a surcharge would drive customers into the arms of their competitors.

Nick Agarwal of Asda said: 'This charge is not something we have discussed at all. We don't want to charge our customers for using their cards.'

A spokesman for Boots said: ' It would not be easy for our customers to absorb the cost if we followed Ikea.'

At Woolworths, Daniel Himsworth said: 'Payments to credit card companies are part and parcel of everyday business for a retailer. We do not believe this should be passed on.'

Ikea's customers were dismayed at the decision. Justin Shipman, 35, who shops at the company's store at Brent Park, North London, said: 'Almost all my furniture came from Ikea and was paid for by credit card.

'I have spent hundreds and hundreds of pounds in there and they want me to give them 70p more.

'It makes me angry that they try and squeeze every penny out of you that they can. I might stop going there on principle.'

Maddy Graham, 29, who also uses the Brent Park store, said: 'If they want to charge me extra it will make me think twice about going. It is not the amount, 70p is nothing, it is the fact no one else does it so why should they?'

Founded in 1943 by 17-year-old Ingvar Kamprad, Ikea has grown from a village-based mail-order business to a concern operating in 21 countries.

Turnover has boomed from £670,000 in 1954 to £8.6bn internationally last year. The 78-year-old Kamprad's fortune is now put at £10bn.

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