We've been hearing a lot about the wonders of 'Buy Now, Pay Later' (BNPL) schemes lately—but even though the service looks like an excellent way to save some money on groceries up front, a welfare group wants to make sure consumers don't end up in a bad place further down the track.

You see, South Australian-based grocer Drakes—which also operates in Toowoomba, Brisbane and Gladstone—recently introduced an Afterpay option at more than 60 stores.

The payment method allows items like groceries to be paid off in instalments and charges late fees for missed payments.

South Australian-based grocer Drakes recently introduced an Afterpay option at more than 60 stores. Credit: Drakes Supermarkets/Facebook

The retailer claimed they had reservations about Afterpay initially, but they’ve seen a customer demand for its service.

Drakes Supermarkets Director John-Paul Drake said: ‘We've introduced Afterpay across the whole network, so in South Australia and Queensland.’

‘[At first] I looked at Afterpay like, “Well, if you're using Afterpay, that means you're struggling to pay for something,” and when we started to actually look into it, that wasn't the case at all,’ he explained.

‘It's not saying that people don't have money. We had so many customers asking us [if] we accept Afterpay, so we then investigated it, and we thought, “OK, well, this is OK for us to roll out.”’

On the surface, it seems like a great way to minimise upfront costs while shopping. Deals like are also seen as a modern form of lay-by.

If a payment deadline isn't met, late fees of up to $10 could be charged, placing customers in a risky situation, according to the South Australian Council of Social Service (SACOSS).

South Australian Council of Social Service warned that Afterpay service could ensnare consumers in a dangerous debt trap. Credit: Mike Cohen/Flickr

‘They've been largely unregulated as provision mechanisms for people to get debt, and in that context, they don't actually get the scrutiny and the attention and don't have the transparency, that we think is really appropriate,’ SACOSS CEO Ross Womersley claimed.

He added: ‘That's much more interest than people are paying on other credit systems if you're using a credit card, and so it's a very, very dangerous debt trap to people to get captured by.’

Due to the nature of Afterpay, Mr Womersley urged Drakes Supermarkets to reconsider its implementation.

‘Enticing people to use credit to do that is all well and good for anybody that can afford to meet their repayments when they fall due,’ he said.

‘But in this instance, we think that this is just an enticement that is just completely unnecessary, and in fact, we'd be really encouraging Drakes to really walk away from continuing to offer these types of products.’

Other businesses like Western Australian supermarket chain Spudshed and discount retailer Cheap as Chips use Afterpay.

As for Drakes, they assured that they were not receiving money from the service. In fact, they had to pay ‘a percentage’ of their transactions that went through the system.

‘Merchants offering Afterpay’s pay-in-four products will pay a merchant fee,’ a spokesperson for Drakes stated.

‘Shoppers have been using credit cards for these purposes for decades—and this is an interest-free (when paid on time) alternative,’ they added.

The spokesperson also claimed that Afterpay service demonstrated ‘strong consumer outcomes’ in the second quarter of 2023, with 98 per cent of purchases not incurring late fees and 95 per cent of instalments paid on time’.

‘We don't let customers keep spending if they are behind on payments,’ the spokesperson shared.

‘We cap our late fees, and we don't allow customers to revolve in debt.’

In May, we reported that the Australian government had implemented stricter regulations for Buy Now, Pay Later (BNPL) services, treating them as credit products. This is in response to concerns about the risks posed by BNPL, such as high levels of debt and difficulty in managing repayments.

Our members have mixed reactions—while some use the service, some prefer to do their transactions outright.

‘I have never used it. If I can't pay, I do not buy,’ member @Jest wrote.

Member @Trudi shared: ‘I am also a retired accountant. I have two no-fee credit cards used to pay for nearly everything I purchase, and both cards are paid in full each month. If any business is charging fees for credit/debit cards, I insert the card and select “savings” to pay.’

‘As for buy now/pay later, I never have and never will use those,’ the member added.

Meanwhile, other members benefit from the payment scheme. As member @Freeman27 put it: ‘I often avail myself of the PayPal service of four payments, but I never purchase anything through them unless I have the full amount already available. I have found it very helpful for larger purchases.’

‘I use Afterpay a Pay in 4 all the time—it evens out costs that come in peaks and troughs and makes me feel more in control- having said that, I always buy things I really need and that I know I can afford, one of the benefits of a fixed income,’ member @DrivingGirl commented.

‘I have never defaulted or been late as I regard this as a privilege, not a right, and it can be taken away at the drop of a hat. I have earned that privilege by being responsible and diligent,’ they continued.

Key Takeaways

• Supermarket chain Drakes has introduced Afterpay as a payment option across its stores.
  
• The move has been criticised by social welfare group SACOSS, who warn it could lead to consumers falling into a 'dangerous debt trap'.
  
• Drakes Supermarkets director John-Paul Drake defended the decision, saying demand was driven by customers and likened Afterpay to a credit card.
  
• Afterpay insists its business model is built on receiving fees from merchants rather than from consumers via debt defaults.
  

What’s your take on this story, members? Should Drakes Supermarket continue adding the Afterpay service to their stores? Let us know in the comments below!

 

[DrivingGirl]

I would never use this for a consumable item I going to have to buy again before the 4 payments are up- so no food or everyday items. I have used it often for lower cost one off items, never been late and so no interest ever paid. It’s easy to budget - you know exactly when funds are needed and for me it helps me get the odd thing I could not afford in one hit. Same as always don’t abuse the privilege, be responsible!

 

[BruceC]

We've been hearing a lot about the wonders of 'Buy Now, Pay Later' (BNPL) schemes lately—but even though the service looks like an excellent way to save some money on groceries up front, a welfare group wants to make sure consumers don't end up in a bad place further down the track.

You see, South Australian-based grocer Drakes—which also operates in Toowoomba, Brisbane and Gladstone—recently introduced an Afterpay option at more than 60 stores.

The payment method allows items like groceries to be paid off in instalments and charges late fees for missed payments.

View attachment 31060

South Australian-based grocer Drakes recently introduced an Afterpay option at more than 60 stores. Credit: Drakes Supermarkets/Facebook

The retailer claimed they had reservations about Afterpay initially, but they’ve seen a customer demand for its service.

Drakes Supermarkets Director John-Paul Drake said: ‘We've introduced Afterpay across the whole network, so in South Australia and Queensland.’

‘[At first] I looked at Afterpay like, “Well, if you're using Afterpay, that means you're struggling to pay for something,” and when we started to actually look into it, that wasn't the case at all,’ he explained.

‘It's not saying that people don't have money. We had so many customers asking us [if] we accept Afterpay, so we then investigated it, and we thought, “OK, well, this is OK for us to roll out.”’

On the surface, it seems like a great way to minimise upfront costs while shopping. Deals like are also seen as a modern form of lay-by.

If a payment deadline isn't met, late fees of up to $10 could be charged, placing customers in a risky situation, according to the South Australian Council of Social Service (SACOSS).

View attachment 31061

South Australian Council of Social Service warned that Afterpay service could ensnare consumers in a dangerous debt trap. Credit: Mike Cohen/Flickr

‘They've been largely unregulated as provision mechanisms for people to get debt, and in that context, they don't actually get the scrutiny and the attention and don't have the transparency, that we think is really appropriate,’ SACOSS CEO Ross Womersley claimed.

He added: ‘That's much more interest than people are paying on other credit systems if you're using a credit card, and so it's a very, very dangerous debt trap to people to get captured by.’

Due to the nature of Afterpay, Mr Womersley urged Drakes Supermarkets to reconsider its implementation.

‘Enticing people to use credit to do that is all well and good for anybody that can afford to meet their repayments when they fall due,’ he said.

‘But in this instance, we think that this is just an enticement that is just completely unnecessary, and in fact, we'd be really encouraging Drakes to really walk away from continuing to offer these types of products.’

Other businesses like Western Australian supermarket chain Spudshed and discount retailer Cheap as Chips use Afterpay.

As for Drakes, they assured that they were not receiving money from the service. In fact, they had to pay ‘a percentage’ of their transactions that went through the system.

‘Merchants offering Afterpay’s pay-in-four products will pay a merchant fee,’ a spokesperson for Drakes stated.

‘Shoppers have been using credit cards for these purposes for decades—and this is an interest-free (when paid on time) alternative,’ they added.

The spokesperson also claimed that Afterpay service demonstrated ‘strong consumer outcomes’ in the second quarter of 2023, with 98 per cent of purchases not incurring late fees and 95 per cent of instalments paid on time’.

‘We don't let customers keep spending if they are behind on payments,’ the spokesperson shared.

‘We cap our late fees, and we don't allow customers to revolve in debt.’

In May, we reported that the Australian government had implemented stricter regulations for Buy Now, Pay Later (BNPL) services, treating them as credit products. This is in response to concerns about the risks posed by BNPL, such as high levels of debt and difficulty in managing repayments.

Our members have mixed reactions—while some use the service, some prefer to do their transactions outright.

‘I have never used it. If I can't pay, I do not buy,’ member @Jest wrote.

Member @Trudi shared: ‘I am also a retired accountant. I have two no-fee credit cards used to pay for nearly everything I purchase, and both cards are paid in full each month. If any business is charging fees for credit/debit cards, I insert the card and select “savings” to pay.’

‘As for buy now/pay later, I never have and never will use those,’ the member added.

Meanwhile, other members benefit from the payment scheme. As member @Freeman27 put it: ‘I often avail myself of the PayPal service of four payments, but I never purchase anything through them unless I have the full amount already available. I have found it very helpful for larger purchases.’

‘I use Afterpay a Pay in 4 all the time—it evens out costs that come in peaks and troughs and makes me feel more in control- having said that, I always buy things I really need and that I know I can afford, one of the benefits of a fixed income,’ member @DrivingGirl commented.

‘I have never defaulted or been late as I regard this as a privilege, not a right, and it can be taken away at the drop of a hat. I have earned that privilege by being responsible and diligent,’ they continued.

Key Takeaways

• Supermarket chain Drakes has introduced Afterpay as a payment option across its stores.
• The move has been criticised by social welfare group SACOSS, who warn it could lead to consumers falling into a 'dangerous debt trap'.
• Drakes Supermarkets director John-Paul Drake defended the decision, saying demand was driven by customers and likened Afterpay to a credit card.
• Afterpay insists its business model is built on receiving fees from merchants rather than from consumers via debt defaults.

What’s your take on this story, members? Should Drakes Supermarket continue adding the Afterpay service to their stores? Let us know in the comments below!

The only problem is the stupid people.
Afterpay is not the problem!
The supermarket is not forcing people to use it.
Just like people Crying about the interest rates on credit cards.
There is no issue with interest rates on credit cards as long as you only spend what you can afford to pay off fully every month.
I have had a credit card for 40 years and only paid interest once and that was when I was overseas and forgot to pay it.
It’s a simple rule. Don’t buy what you cannot afford! Take responsibility for your own actions and spending.

 

[mylittletibbies]

I never use any type of credit card, after pay, etc. The only card I use is my debit card.
My stepdaughter and husband have 6 credit cards between them, they use one to pay the other. There are many people like this who have no idea how to control their spending and want everything they see. How they managed to qualify for so many cards is beyond me.
I do not think supermarkets should offer after pay etc. If you can't afford to pay for your groceries you are already in big trouble, without getting more debt, which is what you are doing.

 

[AlanQ]

Much the same as the old adage, 'if you have to ask, you can't afford'. Same would apply to afterpay on a supermarket shop. If you can't afford to pay in full on the day, put the coke or the snacks back on the shelf. What happens next week and the weeks after when you are required to make a payment to the afterpay mob? They will take the money automatically from your account and like many buyers remorse once you've used the product you still are owing money on, you will resent and blame the store for offering in first place. Not something supermarkets should be offering. Any charity financial consultant will tell you to budget and stick with that budget, otherwise the out of the blue expenses just escalate and the endless cycle of debt continues.

 

[Martin D]

I do use Afterpay for larger purchases. I an on a pension, and I find it very useful.
One tip that I do, however, is I ensure that I make the purchase in the few days after I am paid. That way Its guaranteed that there will be money in the bank account to cover the charge (and not incur a late fee).
I had to get a new portable air conditioner recently, but as a pensioner, having a one off payment of $450 would have put a severe drain on my money for that fortnight.
But by using Afterpay, I had 4 fortnightly payments of $112.50, which came out the day after I am paid (I use Afterpay on the day or so AFTER I am paid as if you do it on the same day as you are paid, Afterpay could be withdrawn earlier than the pay goes into the account, receiving a penalty late fee).
Afterpay also sends you a text stating that a payment is due in 4 days, so you have that chance to ensure the money is in the account ready. In my case I ensure the money is there as I only use Afterpay in the few days after I am paid.
I would never use it in the few days before I am paid, as Then I cannot guarantee there is enough in the bank to cover the payment.
Its a tool, when used responsibly, can be very helpful for those larger purchases. Yes sure, if you can pay the item in one payment, do that, but its there for those that cannot.

 

[BillW41]

We've been hearing a lot about the wonders of 'Buy Now, Pay Later' (BNPL) schemes lately—but even though the service looks like an excellent way to save some money on groceries up front, a welfare group wants to make sure consumers don't end up in a bad place further down the track.

You see, South Australian-based grocer Drakes—which also operates in Toowoomba, Brisbane and Gladstone—recently introduced an Afterpay option at more than 60 stores.

The payment method allows items like groceries to be paid off in instalments and charges late fees for missed payments.

View attachment 31060

South Australian-based grocer Drakes recently introduced an Afterpay option at more than 60 stores. Credit: Drakes Supermarkets/Facebook

The retailer claimed they had reservations about Afterpay initially, but they’ve seen a customer demand for its service.

Drakes Supermarkets Director John-Paul Drake said: ‘We've introduced Afterpay across the whole network, so in South Australia and Queensland.’

‘[At first] I looked at Afterpay like, “Well, if you're using Afterpay, that means you're struggling to pay for something,” and when we started to actually look into it, that wasn't the case at all,’ he explained.

‘It's not saying that people don't have money. We had so many customers asking us [if] we accept Afterpay, so we then investigated it, and we thought, “OK, well, this is OK for us to roll out.”’

On the surface, it seems like a great way to minimise upfront costs while shopping. Deals like are also seen as a modern form of lay-by.

If a payment deadline isn't met, late fees of up to $10 could be charged, placing customers in a risky situation, according to the South Australian Council of Social Service (SACOSS).

View attachment 31061

South Australian Council of Social Service warned that Afterpay service could ensnare consumers in a dangerous debt trap. Credit: Mike Cohen/Flickr

‘They've been largely unregulated as provision mechanisms for people to get debt, and in that context, they don't actually get the scrutiny and the attention and don't have the transparency, that we think is really appropriate,’ SACOSS CEO Ross Womersley claimed.

He added: ‘That's much more interest than people are paying on other credit systems if you're using a credit card, and so it's a very, very dangerous debt trap to people to get captured by.’

Due to the nature of Afterpay, Mr Womersley urged Drakes Supermarkets to reconsider its implementation.

‘Enticing people to use credit to do that is all well and good for anybody that can afford to meet their repayments when they fall due,’ he said.

‘But in this instance, we think that this is just an enticement that is just completely unnecessary, and in fact, we'd be really encouraging Drakes to really walk away from continuing to offer these types of products.’

Other businesses like Western Australian supermarket chain Spudshed and discount retailer Cheap as Chips use Afterpay.

As for Drakes, they assured that they were not receiving money from the service. In fact, they had to pay ‘a percentage’ of their transactions that went through the system.

‘Merchants offering Afterpay’s pay-in-four products will pay a merchant fee,’ a spokesperson for Drakes stated.

‘Shoppers have been using credit cards for these purposes for decades—and this is an interest-free (when paid on time) alternative,’ they added.

The spokesperson also claimed that Afterpay service demonstrated ‘strong consumer outcomes’ in the second quarter of 2023, with 98 per cent of purchases not incurring late fees and 95 per cent of instalments paid on time’.

‘We don't let customers keep spending if they are behind on payments,’ the spokesperson shared.

‘We cap our late fees, and we don't allow customers to revolve in debt.’

In May, we reported that the Australian government had implemented stricter regulations for Buy Now, Pay Later (BNPL) services, treating them as credit products. This is in response to concerns about the risks posed by BNPL, such as high levels of debt and difficulty in managing repayments.

Our members have mixed reactions—while some use the service, some prefer to do their transactions outright.

‘I have never used it. If I can't pay, I do not buy,’ member @Jest wrote.

Member @Trudi shared: ‘I am also a retired accountant. I have two no-fee credit cards used to pay for nearly everything I purchase, and both cards are paid in full each month. If any business is charging fees for credit/debit cards, I insert the card and select “savings” to pay.’

‘As for buy now/pay later, I never have and never will use those,’ the member added.

Meanwhile, other members benefit from the payment scheme. As member @Freeman27 put it: ‘I often avail myself of the PayPal service of four payments, but I never purchase anything through them unless I have the full amount already available. I have found it very helpful for larger purchases.’

‘I use Afterpay a Pay in 4 all the time—it evens out costs that come in peaks and troughs and makes me feel more in control- having said that, I always buy things I really need and that I know I can afford, one of the benefits of a fixed income,’ member @DrivingGirl commented.

‘I have never defaulted or been late as I regard this as a privilege, not a right, and it can be taken away at the drop of a hat. I have earned that privilege by being responsible and diligent,’ they continued.

Key Takeaways

• Supermarket chain Drakes has introduced Afterpay as a payment option across its stores.
• The move has been criticised by social welfare group SACOSS, who warn it could lead to consumers falling into a 'dangerous debt trap'.
• Drakes Supermarkets director John-Paul Drake defended the decision, saying demand was driven by customers and likened Afterpay to a credit card.
• Afterpay insists its business model is built on receiving fees from merchants rather than from consumers via debt defaults.

What’s your take on this story, members? Should Drakes Supermarket continue adding the Afterpay service to their stores? Let us know in the comments below!

I generally like the way Drake does things but, as a pensioner, I don't agree with this move which could get customers into financial trouble. Afterpay and similar services are not a good idea for anyone.

 

[Veggiepatch]

Drakes can keep their Afterpay. Never used it....never will.

 

[AlanQ]

I do use Afterpay for larger purchases. I an on a pension, and I find it very useful.
One tip that I do, however, is I ensure that I make the purchase in the few days after I am paid. That way Its guaranteed that there will be money in the bank account to cover the charge (and not incur a late fee).
I had to get a new portable air conditioner recently, but as a pensioner, having a one off payment of $450 would have put a severe drain on my money for that fortnight.
But by using Afterpay, I had 4 fortnightly payments of $112.50, which came out the day after I am paid (I use Afterpay on the day or so AFTER I am paid as if you do it on the same day as you are paid, Afterpay could be withdrawn earlier than the pay goes into the account, receiving a penalty late fee).
Afterpay also sends you a text stating that a payment is due in 4 days, so you have that chance to ensure the money is in the account ready. In my case I ensure the money is there as I only use Afterpay in the few days after I am paid.
I would never use it in the few days before I am paid, as Then I cannot guarantee there is enough in the bank to cover the payment.
Its a tool, when used responsibly, can be very helpful for those larger purchases. Yes sure, if you can pay the item in one payment, do that, but its there for those that cannot.

Nothing wrong with BNPL options, but not for weekly shopping at the supermarket. Not the place for such options. Already too many people struggling to make the fortnightly payments. Biggest mistake for many that fall into this trap is they don't pay 1 off firstly, instead have multiple purchases come out every fortnight or even weekly, then left with nothing to pay for the actual essentials they need.

 

[siameezer]

I have used Afterpay for a few years now and have never incurred a late fee and have no trouble paying off my purchases ... and I am a pensioner. It is the people who can't control their spending and not the BNPL companies that are at fault. If a company I am shopping with online accept Afterpay I will use that instead of using a credit card online as this is more secure. I then go into my Afterpay account and pay it off straight away (as opposed to instalments) and it is a safer way to shop.
I am a Mint-level customer with Afterpay (depending on your usage you are given rewards levels) and I have been able to buy gift vouchers for Woolworths and Coles through them for ages and have used the service once or twice when needed unexpectedly and have paid them off quickly too.

 

[Staffordshire Whippet]

If you need to use a BNPL for groceries, you need to stop buying groceries!
On the other hand..... with the way petrol prices keep going up and up and up and up, maybe a BNPL for a 44-gallon drum of it would be like taking out a 'Futures' deal?

 

[Vinylted]

As more and more people default (and they will) the supermarket will just put up prices to everyone, to compensate! Bad idea!

 

[Leenie]

Much the same as the old adage, 'if you have to ask, you can't afford'. Same would apply to afterpay on a supermarket shop. If you can't afford to pay in full on the day, put the coke or the snacks back on the shelf. What happens next week and the weeks after when you are required to make a payment to the afterpay mob? They will take the money automatically from your account and like many buyers remorse once you've used the product you still are owing money on, you will resent and blame the store for offering in first place. Not something supermarkets should be offering. Any charity financial consultant will tell you to budget and stick with that budget, otherwise the out of the blue expenses just escalate and the endless cycle of debt continues.

What aren’t people saving first to buy ,we have all our life. If you don’t have the money go without until enough is saved to purchase the product . Simple

 

[Vinylted]

What aren’t people saving first to buy ,we have all our life. If you don’t have the money go without until enough is saved to purchase the product . Simple

Younger people just don't think that way anymore.. they must have the latest, largest, regardless of economy and/or debt.

 

[Veggiepatch]

Younger people just don't think that way anymore.. they must have the latest, largest, regardless of economy and/or debt.

You see young people with thousands of dollars worth of tattoos come up and say "Gimme a couple of dollars or a smoke". Not ask....a demand. You should've thought about that before you covered yourself in ink!

 

[Leenie]

Younger people just don't think that way anymore.. they must have the latest, largest, regardless of economy and/or debt.

They also like to try and outdo their friends .

 

[siameezer]

What aren’t people saving first to buy ,we have all our life. If you don’t have the money go without until enough is saved to purchase the product . Simple

Life doesn't work that way and sometimes we need to get things unexpectedly. It is easier to judge I guess than to consider other people's circumstances **shrugs**

Did you ever lay-by things? That is EXACTLY what BNPL is, except you get the goods straight away.

 

[Leenie]

Life doesn't work that way and sometimes we need to get things unexpectedly. It is easier to judge I guess than to consider other people's circumstances **shrugs**

Did you ever lay-by things? That is EXACTLY what BNPL is, except you get the goods straight away.

No always saved first.

 

[Leenie]

As more and more people default (and they will) the supermarket will just put up prices to everyone, to compensate! Bad idea!

I

You see young people with thousands of dollars worth of tattoos come up and say "Gimme a couple of dollars or a smoke". Not ask....a demand. You should've thought about that before you covered yourself in ink!

people are just rude no manners or respect these days.

 

[siameezer]

No always saved first.

Then you would be a lone wolf. I don't know anyone in our generation who has NEVER done a lay-by.