Wal Mart Win

They’re getting into the check-cashing racket, except at considerably lower prices as compared to usurious payday lender joints.

From The Economist:


I’m not much of a Wal Mart fan, but it’s great to see them put the screws to the Pay Day loansharks.

I browsed through the link but I’m still not sure- is Wal-Mart just cashing checks or is it actually issuing payday loans? If not, how would it rein in lenders?

From the first three sentences:

I think the idea is that payday lenders also provide check-cashing services; Wal Mart’s presence will cut into their check-cashing profits.

In an effort to regain that lost profit, isn’t it foreseeable that they’ll hike the interest on their loans?

Possibly, though their rates are capped

Wiki link (above):

I could be overly optimistic, but I don’t think they’ll have much luck lobbying [in this market, and in light of their infamous reputation] for higher caps to offset losses suffered from Wal Mart’s competition.

Wal-Mart is a blight on society because of its tendency to completely destroy all the smaller businesses that compete in any sector they decide to enter. But I’m not crying over this one.


If Wal-Mart does go into the payday loan aspect of the business, too, and charges lower rates than the sharks, then the sharks won’t be able to make up their profit by increasing rates, since their [del]victims[/del]customers wouldn’t go to them in any event. I’m seeing net benefit to society on the one hand, and profits for Wal-Mart on the other, here.

I hate, hate Walmart.

but if they actually go honestly into this market and charge “fair” rates (article claims $3 - $6 / check, which might be ok once you get near the $1,000 check hypothetical) they’ll be doing a lot of people some good.

Fact is, a lot of low income people with no documented financial history get absolutely screwed by the strip-mall “financial institutes” that charge ridiculous rates on basic financial services that the middle-class takes for granted.

On the one hand, lots of these places argue that these are high-risk customers, and that they need these rates to keep up with the defaults and the frauds. On the other hand, people have gone to federal prison for loan-sharking on lower interest rates. My personal opinion is that the strip-mall sharks do more harm than good to the financially vulnerable - people with low income, recent immigrants, etc.

So we’ll see how it goes. It’s a needed service. If Walmart does it more fairly than the strip-mall jackals, well, I’ll give them a few points.

…I’ll still never shop there if I can help it, though. :smiley:

I know, what an ethical quandary! You can’t exactly get mad at Wal-Mart for putting small business payday lenders out of business, now can you?

Personally, I’ve never seen the sense in getting mad at Wal-Mart for putting small businesses out of business, anyway. If you’re going to blame anyone, blame the customers who choose to shop there rather than at the mom-and-pop places.

And you can’t blame the customers because they’re doing what they want. I’ve never really understood the Wal Mart hate.

Either way, this is definitely a good thing.

Wal Mart can sell toilet paper and groceries and underwear at prices which mom and pops can’t compete. In that respect it’s a net benefit for the poor and lower-middle class (and middle class I guess).

I don’t shop in Wal Marts, personally, but if I had 3 kids and was living on $8/hr I wouldn’t select more expensive lettuce and/or socks because it benefited a different retailer, I would want to feed and clothe my family.

Wal Mart is what it is, a result of globalization. Don’t hate the player, hate the game [/michael irvin]

I’ve cashed a check at Walmart before, because I accidentally didn’t have any other way to pay with me. But I take it y’all are talking about payday loans, and, around here, that would really help a lot of people.

Used to absolutely hate Walmart and refuse to go there, but I started doing some grocery shopping there when I got close to filing for bankruptcy. (Example: Tombstone Pizza at the grocery store = $5.99. Same pizza at Walmart, anywhere from $2.50 to 3.84, depending on the week.)

Now I’m using them to cash my paychecks and tax refund checks while I’m in the bankruptcy process, since I don’t want my bank getting funny with my money.

If I ever go back to being financially well off, I’m sure I’ll refuse to shop there again. :wink:

Because many of us believe there should be free market competition.

But it’s not always the same product being sold at Wal-Mart. For example, a few years ago Wal-Mart wanted to sell Levi Strauss jeans but a lower price than they were being sold elsewhere. The answer was to develop a new line called Levi’s Signature, that could be sold at a lower price point. And a few months ago when I was visiting my mother, she asked me to get a few things at Wal-Mart, including Thomas’ English Muffins. When I couldn’t find them at Wal-Mart, I bought them from the IGA grocer next door. The next morning, she noticed that the muffins were different from the ones she usually got from Wal-Mart.

And here’s a quote from a New York Times article about how manufacturers are coping with Wal-Mart, “A few manufacturers, though, are trying to find a way to live with deep-discount mass merchandisers without sacrificing their traditional network of smaller retailers – or their traditional profit margins. **These companies, like Toro and Levi Strauss, are offering specially made low-cost goods to the big boxes while continuing to sell higher-priced products through specialty stores. **” (Bolding added)

Now you may be perfectly happy with the product you’re buying from Wal-Mart. You should just be aware that it’s not always the same thing at a lower price.

As for this story, I actually don’t have a problem with it. It’s a net good if Wal-Mart can lower the price of financial services for people.

You mean the sort of competition where nobody competes? Wal-Mart is the result of a free market.

Just as long as no one gets too free, right?

A lot of people say they support a free market without having any idea what it means.

Clearly, Wal*Mart should look into marketing central nervous system stimulants next.