Retailers shun customer loans in favour ‘responsible’ community support for struggling shoppers

Independent stores are eschewing customer loans in favour of more ‘responsible’ support for struggling shoppers.

The news comes a week after discounter B&M began offering shoppers the chance to buy now and pay later at checkouts, in three interest-free instalments. Tesco, Aldi, Iceland and Marks & Spencer also offer the service, but though a ‘one-time virtual card’.

In August, Iceland launched an interest-free loan scheme, enabling customers on low incomes to apply for pre-loaded cards of between £25 and £100, with repayments set at £10 a week.

A number of the cost-saving strategies have been criticised by retail experts as being “irresponsible” and open to the risk of leaving hard-up families in greater debt.

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Instead, independent retailers are stressing the importance of operating initiatives focusing on longer-term support, as opposed to a quick fix.

Bobby Singh, owner of BB Nevison Superstore & Post Office in Pontefract, West Yorkshire, has teamed up with a local charity to help offer financial and well-being support to his community after witnessing customers turn to shoplifting.

He told Better Retailing: “We are a community shop, and we get to know our customers very well. In recent weeks, I’ve caught regular customers attempt to steal food because they are struggling so much. I want to be able to help them and show them they don’t need to take such desperate measures.”

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Singh partnered with Pontefract Food Bank, which has already helped customers and cut the rate of incidents. “I’m not trying to normalise shoplifting,” he said. “I want to put an emphasis on how community shops can help. I’m giving my customers access to a professional service, and it seems to be working.”

Trudy Davies, owner of Woosnam & Davies in Llanidloes, Powys, also operates a number of year-long money-saving schemes in her store. “Reverse encouragement is a lot more responsible,” she said. “We run a yearly savings club for Christmas to which customers donate money throughout the year. One couple gives me £2 a week to put in their account for credit. If they need a birthday card, they can pop in and use the fund to buy it.”

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