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Sears’ New Credit Card Little Used in Early Going

October 10, 1985

ATLANTA (AP) _ A month after it was introduced, the Discover credit card being tested by Sears, Roebuck & Co. has been slow to catch on with Georgians.

A spot check this week of businesses that accept the card found only one that had seen it used - and that was a Sears store.

Robert Stalnaker, owner of Savannah Furniture Co. and one of about 3,000 Georgia merchants who have signed up so far to accept the Discover card, said his cashiers are ready to ring up Discover charges.

″We have it, yes. But we haven’t had the first customer yet,″ he said.

The Sears Financial Network, marketer of the new card, selected Georgia as the initial test market and unveiled the card Sept. 9.

Sears’ president, Edward A. Brennan, said last week that 70,000 Discover cards had been issued. But a month after the test began, a spot check of 10 Georgia merchants enrolled in the Discover program found only a Sears store that had seen customers come in with it.

″I haven’t actually had a customer that had one,″ said Rudy Pardue, owner of Gwinnett TV Sales and Service in Atlanta’s northeast suburbs. ″Customerwise, there’s been very little said about it.″

Officials at the Sears store at Northlake Mall, northeast of Atlanta, said customers began using the card Sept. 30.

″We’re seeing more and more Discover cards,″ said J.G. Gash, chief of the store’s Discover program.

But nine other businesses, including a hardware store, a pizza restaurant, a stereo shop, an office supply dealer, two Atlanta hotels and a popular Atlanta bar said they had not seen anybody trying to charge anything with it yet.

″We can’t take it yet,″ complained Becky Weber, bookkeeper at the Acapulco Bar. ″We’re haven’t got the material - charge vouchers, literature ... We were supposed to get it weeks ago. I’m real sorry. They’re the ones who are losing, not us.″

Sears spokesman Paul Marrone said he was unaware of any problems getting equipment to participating merchants, but he noted that the card was still in the ″systems check″ phase.

The Discover program is running ″well ahead of projections right now,″ Marrone said. ″The response exceeds our projections by 300 percent.″

Marrone declined to say what the original projections were or how many people had applied for the Discover card.

″We have not been disclosing numbers right now,″ he said in a telephone interview from his New York office.

The Discover card can be used for retail purchases and also for all financial services offered through the Sears Financial Network - including stocks from Dean Witter, insurance from Allstate and real estate through Coldwell Banker.

″It doesn’t appear to me it’s going too well, but I’m not in Atlanta,″ said H. Spencer Nilson, publisher of the Nilson Report, a twice-monthly newsletter on the credit card industry.

″It’s a non-issue,″ he said. ″They won’t tell you how many cards they’ve got out. They’re not doing any business. It’s a waste of time to talk about it.″

But merchants honoring Discover expect more people to start using it once they receive their cards and learn where they can be used.

″Once they get them in the mail, and once they realize what they can do with the card, they’ll start charging,″ predicted Carmen Johnson, manager of East Marietta Office Supply.

At Savannah Furniture, Stalnaker said it was too early to decide how popular Discover might be.

″I’ve seen this before; I started in 1945,″ he said. ″It’ll probably be six to 12 months before we notice anything.″

The Discover program got a boost this week when Dayton Hudson Corp., the nation’s fifth largest general retailer, announced that it will begin taking the card in its stores in the Discover tests markets of Atlanta and San Diego. Among Dayton Hudson’s operations are Hudson’s and Dayton’s department stores in the Midwest, Target discount stores and B. Dalton Booksellers.

While the Discover card generally has higher interest rates than Visa and MasterCard, its chief competitors, Sears is charging no membership fee for at least the first two years.

The card next ″may go into an additional two or three launch markets,″ Marrone said. ″We have not indicated the dates at this time.″

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