Kohls’ profit drops after disclosure of terms that may cause debt
This past week, Kohls Inc., a popular retailer, failed to meet market expectations when its profits dipped due to new legislation that requires them to reveal data that could result in credit card debt for consumers. The company’s in-store sales were up 5.9 percent in the first half of the year and it expected them to increase between 2 and 4 percent in the second half. Its shares dropped 2.7 percent on Thursday.
Kohls was forced to educate shoppers and market analysts on both the positives and negatives of its in-store credit cards under the Credit Card Accountability, Responsibility and Disclosure Act. The company warned that it could lower income by nearly $40 million, resulting in a dip in profit, according to Reuters.
The company claimed that not all of the decrease was due to its credit card program, however. Costs to train employees at a center for online orders was also to blame.
Consumers looking to sign up for a credit card, whether it is with Kohls or another company, are advised to read all terms and conditions. The fine print may disclose important information on interest rates and fees.