An evaluation of consumers’ adoption and use of store cards and related facilities in Botswana

Abstract

The past decade has shown an unprecedented growth in the use of consumer credit facilities, specifically of store cards, in Botswana. Various factors may have attributed to this growth, e.g. the effect of globalization and the consequent introduction of materialistic values in Africa that instigated the desire to increase living standards; the introduction of sophisticated shopping centers and related retail facilities; fierce competition amongst retailers that motivated retailers to extend credit facilities to consumers across the socio economic spectrum. On the one hand retailers profit from high interest rates on credit accounts. On the other hand consumers are attracted to credit facilities through attractive benefits such as flexibility of payment and convenience of use. The quest for lavish consumption that is typical of our times, has increased the need for credit systems, especially those that are easy to obtain, such as store card accounts. Unfortunately the adoption and use of credit facilities may have harmful economic implications to consumers as well as the economy unless proper facilitation prior to the approval of credit accounts is exercised. This research investigated the factors that may encourage the adoption of store cards and describes the effect of store cards on consumer’s buyer behavior as well as their eventual satisfaction with store card facilities after prolonged use. The investigation was fundamentally constructed from primary data. The findings provide first hand insights on the use of store cards. The research was exploratory in nature and was conducted within a quantitative paradigm. Data was gathered with a questionnaire that was completed in interview format or under the supervision of the researcher. The primary data was statistically analyzed. Descriptive analysis was used to give an overview of the demographic data and responses to the main questions of the research. Inferential analysis was used to determine the relationships between store card attributes and the respondents’ satisfaction levels. Financial and convenience attributes of store cards were identified as the most important influences during a decision to adopt a store card. Additional benefits and special incentives are apparently not that important. Similarly marketing influences such as advertisements and persuasive influences of salespeople seemed of lesser importance. Respondents later indicated that they are not fully informed about the additional benefits that are associated with store cards and consequently indicated their dissatisfaction with these attributes. Dissatisfaction with these attributes (although they were apparently of lesser importance) affected the general mean satisfaction score for store cards negatively: the mean score of 18.91 out of a maximum of 30 is not impressive and presents retailers with much room for improvement. These results cannot be generalized due to the limited scope of the research. However, valuable insights can be used to structure a larger research project that involves store cardholders of various retail outlets. The findings as is can also be used by professionals in Consumer Science to educate consumers on credit management and to encourage informed, responsible buyer behaviour through proper budgeting and clear long term goals in terms of income and expenses. The findings may also contribute to existing theory on consumer credit.