Retail workers say they are being encouraged to sign up as many customers as possible on high-interest payment deals and store cards.
Many retail chains, feeling the pinch of the recession, are offering tempting deals to entice customers with extended interest-free periods and long payment terms.
Farmers charges 23.95 per cent interest per annum on its store card.
An employee there, who did not wish to be named, said she and other employees were encouraged to ask people to put their purchases on their Farmers Card.
"When we do performance reviews, the managers growl at us if we're not asking people if they'd like to get a Farmers Card or asking them if they want to put their purchases on the card."
A former Retravision customer service employee said she didn't like signing people up for hire purchase deals.
She said it usually took customers around 10 minutes to fill in a form requesting finance. The form would be faxed to the finance company which did a credit check on the customer, and then faxed them back the terms. The weekly payments were very low, to increase the time interest was paid, she said.
"The worst was Q Card. They would send back a pre-approved amount which was often a few thousand more than what they had applied for, which meant they could throw in a stereo, DVD recorder and washer/dryer combo at the same time."
There were also penalties if the entire loan was paid back within the interest-free period.
Suzanne Chetwin, Consumer NZ chief executive, said that if retailers were directing staff to push people on to the high interest deals, that would be an "appalling practice".
Joanne Tait, a senior adviser at the Ministry of Consumer Affairs, said it was often unclear to people how much interest they were paying because they had multiple purchases on their cards.
"The lesson is that if you are going to have a store card then learn the rules to pay it off."
The Farmers Card has an annual interest rate of 23.95 per cent,
The Warehouse's Red Card charges 21.99 per cent, the GE Creditline card charges 25.65 per cent, and Fisher & Paykel Finance's Q Card charges 25.25 per cent at the end of any interest-free period.
Phil Devlin, general manager of financial services at The Warehouse, said the company had to charge 21.99 per cent interest because the card could be used only within the store.
He advised people who got into trouble with repayments to contact the store to arrange a payment plan.
Farmers referred inquiries to card manager Fisher & Paykel Finance, which did not respond to questions.
Retailers pushing pricey credit deals
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