‘Genuinely f****d’: Shoppers slam ‘buy now, pay later’ offer for groceries

A photo has sparked intense fury from shoppers as millions of Australians face a cost of living crisis.

A seemingly innocent picture of a supermarket aisle has sparked intense fury from shoppers online, after they noticed ‘buy now, pay later’ option promoted for basic groceries.

The picture was taken at a Drakes Supermarkets chain in South Australia and posted to Reddit, where customers slammed the “pay it in four, interest free” advert.

“Picking up a few things at the supermarket and saw all these tags promoting Afterpay,” the person behind the post wrote.

“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 s***.”

The controversial photo comes after South Australia-based retailer Drakes, which also operates stores in Toowoomba, suburban Brisbane and Gladston, opted to introduce an Afterpay option across its more than 60 outlets in September 2023.

Redditors slammed the Afterpay offer for basic grocery items. Picture: Reddit

At the time, the decision attracted controversy from social welfare groups who argued vulnerable customers could be caught in a “very dangerous debt trap,” as reported by the ABC.

However, the photo has appeared to reignite frustrations months later.

“Ok this is genuinely f****d. I implore everyone to call your local MP and tell them how much of a disgrace this is,” one person replied.

“This needs to stop. People need to be able to live.”

“Everyday items shouldn’t be used on Afterpay, hell I would say if you have to Afterpay it you can’t afford it. I can understand emergency items on Afterpay. Car repairs for example. “But groceries, bills, are the worst things to Afterpay because there’s always more food to buy and another bill to pay,” a second wrote.

“Lucky country where getting yourself into debt for a pack of cheap snags is becoming the norm,” another person commented.

Drakes adopted Afterpay in September 2023. Picture: Supplied/Drakes

When Drakes opted to embrace the buy now pay later (BNPL) platform last year, management said the decision was driven by customer demand.

“(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,” Drakes Supermarkets director John-Paul Drake told ABC Radio Adelaide.

“We had so many customers asking us do we accept Afterpay so we then investigated it and we thought, ‘OK, well this is OK for us to roll out.’”

“Afterpay were quick to come to the party — obviously they want to get their product out there — and it’s a good fit for us and it’s a good fit for our customers,” he added.

However for the federal government, the buy now pay later system has proven a far cry from ‘OK’.

On March 12, the government announced plans to regulate the sector following concerns that the unregulated nature of BNPL was resulting in lenders charging excessive late payment fees and engaging in unaffordable lending practices that led some customers to experience financial hardship and stress.

Commenters argued Afterpay should not be available for basic necessities and everyday items. Picture: Supplied/Drakes

Among the biggest change users may see is a longer application process, with providers asking more questions about their credit history, income and expenses.

The regulatory reforms address many of the concerns initially raised last year in the wake of Drakes’ Afterpay opt-in.

Welfare group SACOSS (South Australian Council of Social Service) called for stricter provisions around BNPL services and encouraged Drakes to reconsider its deal with Afterpay.

“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,” SACOSS CEO Ross Womersley 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.”

In a statement provided to News.com.au by Afterpay, the company clarified its late fees are capped at a dollar amount as well as 25 per cent of the original order value. Missed payments prevent the customer from using the platform until the amount is paid in order to safeguard customers from a debt cycle.

“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 statement read.

Welfare groups and the federal government have demanded stricter application processes similar to existing credit schemes. Picture: NCA NewsWire/John Gass

“Afterpay is a free service for consumers who pay on time and a much safer and affordable alternative to traditional credit, which can charge interest rates of more than 20 per cent. “Credit cards have been used for all kinds of purchases big and small for more than 20-30 years, and now we clearly see people preferring an option like Afterpay as a better way to pay.

From our last earnings report in Q4 2023, you will see the majority of customers continue to use BNPL safely and effectively as 95% of all instalments were paid on time and 98% of all purchases incurred no late fees, consistent with prior periods.

A spokesperson for Drakes supermarkets told news.com.au: “We’ve been overwhelmed with the response from our customers since introducing Afterpay as a payment method. We’ve noticed it’s a popular form of payment for Gen Z.

“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. 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.”