Yahoo Finance Afterpay lifeline offered to Aussies in 'disgraceful' supermarket move
One South Australian woman was frustrated to see signs for Afterpay when shopping at Drakes.
Supermarket chain Drakes has been called out over its decision to promote Afterpay to customers in-store, as shoppers continue battling cost-of-living pressures.
One frustrated South Australian woman said she was recently shopping at the supermarket when she spotted signs for Afterpay on the shelves.
“It's one thing to have Afterpay at all, another to use it for groceries - but I honestly find it ridiculous that the supermarkets are actually promoting this shit,” she wrote, alongside pictures of the tags.
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Drakes introduced Afterpay as a payment option in September last year, adopting it across its 65 stores in South Australia and Queensland.
The buy now, pay later (BNPL) method allows shoppers to pay for items in four equal installments every fortnight. While no interest is charged, shoppers are hit with late fees if they miss a payment.
For orders of $40 and over, an initial late fee of $10 is charged each time a payment is late. A further fee of $7 is charged if the payment is still late after one week. Total fees are capped at 25 per cent.
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The average household spends $188 per week on groceries, according to Finder, with almost half saying their supermarket bill is one of their most stressful expenses.
‘Extremely unsettling’
Most Aussies in the comments agreed with the shopper, with one calling the signs “extremely unsettling” and another labelling it a “disgrace”.
“Everyday items shouldn't be used on Afterpay … I can understand emergency items on Afterpay. Car repairs for example,” one shopper said. “But groceries, bills etc. are the worst things to Afterpay, because there's always more food to buy and another bill to pay.”
Other shoppers argued using Afterpay was no different to using a credit card, but some pointed out there were stricter eligibility requirements for credit cards, along with perks like frequent flyer points.
Drakes responds
A Drakes spokesperson told Yahoo Finance the supermarket had Afterpay signs displayed throughout its stores "to ensure customers are aware of the payment options available to them".
"We understand our customers have diverse preferences when it comes to payment options, so introducing Afterpay is just another way were offering payments in store," the Drakes spokesperson said.
"It’s all about choice – we’re listening to customers who have asked us to offer this option, it’s up to our customers to decide whether it’s the right option for them."
The spokesperson said they had been "overwhelmed" with the response from customers since introducing Afterpay and noted it was a popular payment method among Gen Z.
An Afterpay spokesperson told Yahoo Finance the majority of its customers used BNPL "safety and effectively" with installments paid on time.
"We believe it is important for all consumers to have access to a safe, simple and transparent solution such as Afterpay that helps customers budget and manage their cashflow - for everyday items like groceries or one-off purchases like a new refrigerator," the spokesperson said.
The spokesperson argued Afterpay was a "safer and affordable alternative to traditional credit", which can charge interest of more than 20 per cent.
Afterpay can be a ‘slippery slope’
Consumer and personal finance expert Sue Hayward warned using Afterpay to pay for groceries could create a debt trap for vulnerable customers in the long run.
"Spreading payments with Afterpay can mean financial breathing space when buying big-ticket items," Hayward told Yahoo Finance. “But relying on it as a financial lifeline to pay for basics like your weekly supermarket shop can be a slippery slope to getting into debt if you're already struggling and can't keep on top of repayments.”
Last week, the government released draft legislation to regulate the BNPL sector. The changes would treat BNPL as credit, which would make it subject to more rigorous responsible-lending checks.
Consumer Action Law Centre welcomed the regulation and noted that BNPL was being used by people in financial difficulty to afford essentials like food and medicine.
“The lack of regulation means many people calling our financial counsellors take out multiple accounts in times of difficulty and become trapped in unaffordable debt spirals when repayments fall due,” CEO Stephanie Tonkin said.
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