SEARS, that trusted American institution. The place where you could buy almost anything you could possibly need, all while singing catchy pop tunes with your siblings.
But things aren’t looking too good for SEARS, just the other day I happened to come across this article online:
Sears: A great American tragedy nears its end
The stock’s latest fall, 13% on Jan. 30, takes the value of Sears down to $640 million. That’s 71% below where it was in 2016. In 2007, SHLD stock traded at $190 per share. That’s more than $10 billion wiped away.
During its 2016 fiscal year, which ended in January, Sears lost $1.129 billion on revenue of $25.1 billion. For the first three quarters of fiscal 2016, SHLD had lost $1.6 billion on revenue of $16 billion.
A quick search shows plenty of other articles touting SEARS’ impending doom, with them selling off locations and various brands.
Normally it’s not something I’d give a lot of thought, but then by sheer coincidence, something just happened to me which directly related to this story. I got home this evening and there was a letter in my mailbox from SEARS. Several years ago I got a SEARS credit card. There’s a store near my job, so I figured you never know when it will come in handy. But I haven’t had many reasons to use it since then. So the letter informs me that a review of my account shows that I haven’t used the card in over 17 months. Therefore it tells me that if I do not use the card by March 31st of this year, they will lower my credit limit from $5000 to $2001.
How does this make any sense?
Clearly, the goal here is to get me to spend money at SEARS, which would be understandable even if they weren’t in financial trouble. But who thought this was the best way to go about it? Think about it, they’re basically threatening to take away something that I’m not currently using. If I’m not using my card with X amount of available credit, what makes them think I’d be more inclined to use it after they cut that credit amount limit more than in half?
And how did they decide to cut it to $2001, why not just an even $2000? Ignoring that, what’s the difference to them? Is the company going to save money by giving me less credit that I’m not using anyway? If this were some kind of issue about not wanting to maintain inactive accounts, like perhaps they thought it was not used because I’m dead, then I could see sending a letter saying I need to use the card or else it would be closed. My card is due to expire later this year, they could just say that if there was no use or balance by then, they would simply not renew the account.
But this about getting me to use the card, so instead of threatening me to get me to use it, shouldn’t they be trying to entice me? Like, instead of saying they will lower my credit limit if I don’t use it, how about increasing my credit limit if I use it? Or lowering my APR on purchases? Y’know, some kind of reward if I use the card?
An example would be how I first started using LYFT a couple of years ago. I downloaded the app, but I wasn’t using it because I was happy enough with UBER at the time. So a month and a half after downloading the app but not using it, I got contacted by Lyft and they gave me a discount on my first 10 rides, if I used it within a certain time limit. That got me to try it. That’s what you’d think someone at SEARS would think. So this right there is a small but prime example of the bad management decisions being made in this corporation. No wonder they’re in trouble.
The problem is, now I’m kind of stuck. My natural instinct is just to say eff you. Go ahead, lower my credit limit, I don’t care. On the other hand, there’s the part of me that says you never know what could happen. There may come a time when I need to buy something at SEARS and, assuming it’s still in business at that time, why not keep the largest limit possible? It’s not like I need to spend a ton, the letter didn’t give me any rules besides use the card by March 31st. I could drop by on my way home, buy a pack of socks for $10 and there ya go. BUT I DON’T LIKE BEING THREATENED, DAMMIT!
[…] it. Then I immediately got a text message from that same number claiming to be from the issuers of my SEARS credit card, asking me about a suspicious purchase, asking me to either confirm it via the text or, if […]