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.
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.
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.
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) told the ABC stricter provisions around BNPL services were long overdue, particularly amid a cost-of-living crisis.
“Each time a payment is defaulted, they charge a late fee of $10,” SACOSS CEO Ross Womersley told ABC Radio Adelaide.
“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 (for) people to get captured by.”
At the time, Mr Wormsley 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,” 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.”
In response to these concerns, a spokesperson for Afterpay told the ABC its business model was “built on receiving fees from merchants” – not from consumers via $10 debt defaults.
“We don’t let customers keep spending if they are behind on payments,” the spokesperson said.
“We cap our late fees, and we don’t allow customers to revolve in debt.”
A spokesperson for Drakes 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.”
Afterpay was also approached for comment.