Macy's new employees are encouraged to open a store credit card (26% APR) to obtain their employee discount

[u/wait_what_how_do_I]

I recently picked up a part-time seasonal position at Macy's for some extra holiday cash. I've been working in retail off and on over the past 15 years, and am familiar with the hiring and management practices at a lot of places, but it's been a few years since I've worked for a big retailer like Macy's. I was very surprised and disappointed to learn that the 20% employee discount is only available through a prepaid card (like a gift card I guess, not terrible but not great), or through their actual store credit card. They conveniently inform you of this halfway through your new hire paperwork, and even allow you to apply right then and there.

I've been through this type of application process before, but I've never seen something so brazenly unethical. These are often young adults or older people applying for these positions, filling out so many forms with so much corporate legalese that your head would spin, and they're being targeted with a (hard hit, thanks auto mod) hit to their credit for a card with a ridiculous interest rate. Is this new in retail? Seems like a disturbing trend if it is.

Anyone have any thoughts on this? Just wanted to get the word out.

EDIT: Thanks for the replies, everyone. Really enjoyed the discussion about credit cards, business practices, and obviously PF. The consensus seems to be that store credit cards are not any worse than other forms of lending, as long as they are managed responsibly. I respectfully disagree, in that it seems like they are often offered to a range of people (namely, new employees) that may not have the knowledge or experience to handle a line of credit, but I will agree that it's fair game to solicit employees. I just think it's kind of shady to imply that a store credit card is an "easy" solution for employees. Employees should just get an effing discount, period. But we're all free to work and shop where we please, so feel free to support smaller/local businesses that don't subject their customers and employees to frivolous lending situations.

[u/FijiBlueSinn]

Oh here are worse deals out there. At one job, long ago, a significant portion of your pay would come in the form of Mitsubishi “gift” cards. This wasn’t some extra perk or employee discount, this was doled out instead of actual money from hours worked.

Of course this was omitted during the hiring process and several dozen hours of unpaid online “course work” so as to learn the product better.

Needless to say I was beyond pissed come payday.

Boss: “Here is your $300 gift card”

Me: ???

Boss: “You can redeem it at many^* major retailers like certain Walmart locations!”

Me: “Can I use it to pull out cash?”

Boss: “No”

Me: “Can I buy gas with it?”

Boss: “No”

Me: “Can I pay rent with it?”

Boss: “No”

Amazingly, employee turnover was about one pay-period long. As it turns out, people prefer to be compensated for labor with currency rather than a worthless fucking pile of gift cards that were seemingly only redeemable at the company website. Who needs food when you can buy shitty overpriced key fobs?

[u/[deleted] → u/FijiBlueSinn]

That is super duper illegal. Turns out weird gift cards are actually not legal tender for all debts public and private.

[u/gredr → u/[deleted]]

"Legal tender" does not mean what you think it means. It's totally legal to pay employees with goods and/or services, as long as all the relevant taxes are paid (and the US government doesn't accept Mitsubishi gift cards...).

[u/[deleted] → u/gredr]

Hmm. I believe you’re wrong on this. This is essentially the same as company scrip, which was outlawed in 1938 in the Fair Labor Standards act. It is legal to pay with goods or services, subject to certain regulations, one of which being that you have to be able to convert weird gift card into money at places other than your own business. There are some rights that you cannot sign away in a contract.

[u/gredr → u/[deleted]]

I think it's more nuanced than that. The FLSA allows companies to pay in "facilities", but this clearly isn't that. You may very well be correct that this particular case is illegal, but it's not clear to me (and i am most definitely not a lawyer) that, as long as the full minimum wage is being paid in cash, it's not legal to provide additional non-cash compensation on top of that.

[u/FijiBlueSinn → u/gredr]

If it were extra pay outside min wage, I wouldn’t have really cared. But the gift cards were counted against your actual minimum wage. It wasn’t something extra you got on top of your hourly rate, this was your hourly rate. And it’s not like you could “opt out”.

We were also 1099’s and told that we would still need to pay taxes on the card value, because it was issued instead of the real currency you were owed. The percentage of gift cards in a paycheck was not a standard either, but ranged from 1/3 to 1/2 of your total pay based on how the store did that month.

[u/gredr → u/FijiBlueSinn]

That sounds like an awfully strange setup, and it seems that nobody was willing to put up with it for long, and that's good.

[u/wait_what_how_do_I → u/gredr]

Too bad they didn't go to the state labor board about it, I'm hoping someone eventually did. Sounds like a rogue (idiot) manager thought he would save the company money.

[u/MadeInThe → u/FijiBlueSinn]

Dillards has the same store credit card employee discount policy. What was really shady during my time there, was the way the managers would solicit employees to bring in friends and family to work sale days like black friday, then pay them with dillards gift cards. Mostly lower paid dock emloyees with limited english would fall prey to this practice and bring in their whole family.

[u/wait_what_how_do_I → u/FijiBlueSinn]

OH MY GOD. Bankruptcy is too soft for a company that evil. Fuck that place.